Community Bank rolls on

The continuing turnaround at Lakewood Ranch-based Community Bank, an institution that sat on the brink of failure two years ago, is just short of a miracle, says founder Bill Sedgeman.

Recent highlights include the bank's fourth straight profitable quarter for the period ended March 31, when it earned $194,000. The bank also surpassed $300 million in assets in early April, a few weeks after federal regulators lifted a consent order imposed on the bank in 2009 for its capitalization issues.

The results are so miraculous it might even conceal one of the most important executive business lessons Sedgeman, a 40-year veteran of local community banks, has ever learned. That would be the ability to know when a problem has gotten too big and an admission you need help.

“You can't solve the problem when you're in it,” says Sedgeman, referring to low capital ratios, foreclosures and defaults that have crippled more than a dozen Gulf Coast-based community banks over the last two years. “I told myself, 'Bill, shut up and listen.'”

Sedgeman did just that. And in doing so, he brought in a group of investors led by Brazilian-born entrepreneur Marcelo Lima. Lima's group put $11.5 million into what was then Community Bank of Manatee in December 2009, an investment that has since grown by at least $10 million. (See Business Review Sept. 10, 2010.)

The dividends from that deal have clearly paid off, Sedgeman tells Coffee Talk, and not only in improved quarterly earnings and capital ratios. The bank's costs, in items such as insurance premiums and lending fees, have decreased in lockstep with bank's financial improvement. That has helped boost margins.

“We are much more viable now,” says Sedgeman. “We've really never had it better.”