Banking on experience

As veterans of the banking industry, Carl Chaney and Chip Reeves know a rare opportunity when they see it. As consultants to the then-failing Florida panhandle-based Beach Community Bank, they recognized all they needed to do was successfully raise $100 million to capitalize on one.

Reeves and Chaney had been hired by Beach Community Bank, formerly based in Fort Walton Beach, in October 2017 to guide it through the bankruptcy and asset sale process, which they successfully completed in July. The success of the plan was based on the pair raising $100 million in investment capital, creating and leading a new management team, and selling $120 million worth of non-performing loans and other real estate at a discount. Bank officials declined to disclose the price of the sale.

Reeves' previous position was president and chief operating officer of Cascades Bank of Bend, Ore. Chaney was president and CEO at Hancock Holding Co., owner of Hancock Bank and Whitney Bank, in New Orleans.

About a year later, now headquartered in Tampa with eyes toward growth in both the Tampa and northwest Florida markets, Beach Community Bank is a $550 million institution with a clean, healthy balance sheet, a veteran leadership team, 12 locations and a pledge to extend $1 billion in credit.

“There have only been a handful of transactions like what we pulled off ever done in the country, and the reason for that is most banks, when they get into trouble to that extent, end up failing, and that’s when the regulators step in and take over and the bank is liquidated or sold off,” says Chaney, executive chairman of Beach Community Bank.

The bank could have sold the bad debt itself, Chaney says, but with its weak capital position, it could not survive the losses. According to documents on file with the FDIC, Beach Community Bank held $285 million in total loans in the second quarter 2018, compared to $329 million the year prior, a reduction in 15.4%. Those figures suggest the bank has replaced about $76 million in loan value over the past 12 months. The book value of the bank, including all real estate and equipment assets, was $525 million

Unable to absorb its losses, Beach Community Bank’s board of directions determined its bests strategy was to put the bank into bankruptcy and allow Chaney, Reeves and company to acquire the assets from its holding company.

The pair were comfortable they could raise the capital.

“Chip and I have experience in running organizations that are publicly traded, so we went to those larger institution shareholders who knew us and we have a good track record with,” says Chaney. “It wasn’t that difficult for the right deal. We had to have the right strategy for growth, and when you put all those elements together you end up with a winning story, one investors can understand and support.

“The shareholders know a good deal when they see it, and the bankers we brought on board were willing to walk away from lucrative positions to do this," he adds. "That was validation that we did the right thing and that we were building something special here.”

The first step in the strategy to rebuild Beach Community Bank was to immediately relocate the headquarters to Tampa, allowing it to establish a foothold in what Chaney and Reeves call a lucrative and growing market, particularly for commercial lending. 

Reeves, president and CEO of the bank, says the pair drew the same conclusion about the Beach Community Bank’s value independently. “We separately did our due diligence, and when we came back afterward both of our eyes were wide and we knew there was an opportunity to build something special,” says Reeves. “Our validation was our capital raise and the bankers we were able to attract who are senior individuals who came to us with years of experience in the industry.”

That veteran leadership team includes Tampa Bay market presidents Henry Gonzalez, former Florida president for Mutual of Omaha Bank, and Steve Stagg, previously market executive in Tampa for Regions Bank; and Drew Peterson, formerly chief credit officer of Raymond James, GulfShore, Seacoast.

They’ve joined in the vision shared by Chaney and Reeves that because of bank consolidation coming out of the recession, there remains a void of community banks in a state that has a growing need for commercial credit as the economy expands.

“What we see is a path to create Florida’s next great business bank, and so we will be business-centric,” says Reeves. “We see this growing into a multibillion-dollar institution in five years, primarily in Tampa and the northwest Florida markets with Pensacola being a huge growth area for us. Then we will have some discussion on whether we want to be in Orlando or Jacksonville.” 

The primary focus will be commercial banking from small business to $100 million-plus revenue companies, as well as professionals and owners of businesses. Reeves says a key component of the growth strategy is an organic team lift-out strategy

"We will hire banking teams with great relationships, extensive knowledge of the market and then provide the platform of a business-focused bank with local credit approval, outstanding cash management and effective end-to-end customer delivery," Reeves says.