Opportunity seeker

During the economic downturn, a small Minnesota bank quietly established a presence in Southwest Florida by buying two small banks in Fort Myers and Naples.

At the helm of Stillwater, Minn.-based Central Bank is Larry Albert, the CEO.

On a recent visit to Fort Myers and Naples, the banker says Central Bank's expansion to Florida was purely opportunistic. The bank's owner, John Morrison, is a Naples resident. “He'd always looked at opportunities down here,” Albert says. “It helps to diversify.”

Central Bank was born during the banking crisis of the late 1980s and early 1990s with $20 million in assets, and it grew by acquiring failed banks in Colorado and Montana, Albert says. Today, the bank has $1.1 billion in assets.

So when this most recent crisis occurred, Central Bank was ready to grow again. “We geared up for the FDIC,” Albert says, referring to the Federal Deposit Insurance Corp.'s sale of failing banks. “Our strategy has always been opportunistic.”

Still, Albert concedes that this crisis has lasted longer than many forecast. Central Bank acquired Commerce Bank of Southwest Florida with $80 million in assets in November 2009 after regulators shut it down. In July 2012, Central Bank acquired Bank of Naples with about $147 million in assets.

“It has taken longer than anybody thought for things to come back,” says Albert, who has engineered six FDIC-assisted acquisitions in this recent cycle, plus the Bank of Naples, which was not a failed bank but was struggling with losses.

In all, Central Bank now has 20 offices and Albert has a team dedicated to clearing out the bad loans made by failed banks it has acquired. “We've still got some ways to go down here,” he says, noting that loans tied to land are his biggest challenge. The bank's assets in Southwest Florida total about $100 million, he says.

Albert anticipates that Central Bank will be making new loans on real estate when the economy recovers, but he isn't seeing too much of it yet as customers pay off their debts. “People aren't beating the drums to take out loans,” Albert says. “All banks are deposit-rich right now.”

For now, Albert says the bank's focus is to improve operations in Southwest Florida. The bank has centralized its back-office functions so that it can run Southwest Florida's branches more efficiently than when they were independent.

“We're not going to Miami or up to Tampa,” Albert says. One year ago, Central Bank promoted longtime Naples banker Mike Durkin to be its Southwest Florida president.

Albert says he's seen more interest from his banking peers in Minnesota in Florida banks. For example, he says three Minnesota banks recently bid on First Community Bank of Southwest Florida when the Fort Myers-based bank failed in August. C1 Bank of St. Petersburg won the bidding, beating 10 other banks, FDIC records show.