Florida first

First Florida Integrity Bank recently joined an exclusive club on the Gulf Coast: banks with at least $1 billion in assets.

In fact, Naples-based First Florida Integrity is the only bank south of the Tampa-St. Petersburg area to reach that level. Others include Raymond James Bank in St. Petersburg, USAmeribank in Largo, C1 Bank in St. Petersburg and Bank of Tampa.

But First Florida Integrity isn't done growing yet, says Gary Tice, its chairman and CEO. “We want to get to $2 billion to $3 billion, but we'll never get there if we don't acquire banks,” he says.

Tice is shopping on the Gulf Coast from the Tampa Bay region to Collier County. “The best fit for us is a $250 million bank that's doing well,” he says.

This is how Tice and business partner Garrett Richter built their last bank company, First National Bankshares of Florida. That story is the stuff of banking legend: By the time they sold it to Fifth Third Bank
in early 2005 for a record 6.5 times tangible-book value, they had grown it to

$5.3 billion in assets and 77 branches spanning from Orlando to Tampa, Sarasota and Naples.

Of course, those valuations are long gone today, and banks are lucky to get more than book value in a trade. “Small banks are still selling at book or book-and-quarter,” says Tice. “I'm not going to overpay, it's that simple.”

In fall 2012, Tice, Richter and the shareholders of the bank approved the formation of a holding company called TGR Financial specifically to make acquisitions. The company acquired Naples-based Shamrock Bank of Florida last year for just more than book value.

First Florida Integrity reached $1 billion mostly by growing its own operations. “I had planned to reach it by acquisition, not by organic growth,” says Tice.

Still, it reached that milestone relatively quickly since its first full year of operations in 2008. Tice recalls that it took First National eight years to reach $500 million in assets after he and Richter formed that bank in 1989.

Tice says there are advantages to size. For starters, stiff bank regulations make it more costly for small banks to operate efficiently. And the stock of a larger bank has more value than one of a small bank. That's why Tice says his preferred currency for an acquisition is stock.

Tice is a patient man. He says smaller banks are holding out for a better price and perhaps an interest rate increase next year or in 2016 will boost values. “The ones I've talked to are willing to wait,” he says.

But as he shops for acquisition targets, Tice continues to grow the bank's operations in places such as Tampa and Sarasota. First Florida Integrity posted loan growth of 37% for the year ending Sept. 30 to $604 million, one of the sharpest increases of any bank from Tampa to Naples. First Florida recently opened an office on Kennedy Boulevard in Tampa and has hired a lender in Sarasota.

— Follow Jean Gruss on Twitter @JeanGruss