Bank This

COVER UPDATE

Bank This

Despite the financial turmoil, two longtime Naples bankers raised millions of dollars to start a new bank that will open its doors in January. Their last endeavor was hugely successful.

Who knew the financial crisis would become so overwhelming? In this environment, raising money would be challenging for anyone, even for Gary Tice or Garrett Richter.

The two men who started First National Bankshares of Florida and sold it to Fifth Third for the lofty price of $1.6 billion in 2005 are attempting to stage a repeat.

When they sold First National Bankshares for 6.5 times tangible book value, it had $5.3 billion in assets, $3.9 billion in deposits and 77 branches stretching from the Tampa Bay area and Orlando to Sarasota, Fort Myers and Naples.

But even with that kind of track record, Tice and Richter couldn't raise the $50 million to $60 million they had hoped to by now for their new endeavor, First National Bank of the Gulf Coast. But the $37.4 million they've raised so far is impressive considering the economic circumstances.

"What we had to do is leverage the reputation we earned," says Richter. The pair met one-on-one with many investors, arguing that this is the right time to start a bank despite the grim economic outlook. "We will have no bad loans on our balance sheet," Richter says. Loans that have soured and regulators peering over their shoulders distract competitors, they say.

Still, investors have been cautious and a few asked for their money back. "It was just going to take a lot longer to get to $50 million," says Tice. "If we had another year, we may have raised it. Our objective, quite frankly, was to get open."

Investors in the bank suffered from the stock-market declines this year, making it difficult to compete for cash. "People don't have the excess cash to invest in the bank," Tice says.

So First National sweetened its offer to investors. For each share an investor buys before March 12, he will receive a warrant for five additional shares at the initial offering of $10. The warrants don't expire for five years.

Of the 800 shareholders, 650 are from the Naples area. Almost all of them are individuals or businesses. Only one fund is an investor with a $500,000 investment.

Depending on how quickly the regulators approve the opening date of the bank, First National will be open for business some time in January. "We'd like to shoot for Jan. 2, but it may be the end of January," says Tice.

Once the bank is open, Tice says more investors are likely to buy shares. "Once you prove yourself, the doors get open, the economy gets better, people will invest," he says.

-Jean Gruss