FDIC sees no need for new banks in Florida - Denver Business Journal:

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Delays and scrutiny from the have causefd many of the banks that filed for a startup bank charterrto withdraw. “At this point, if you want to enter the banking system in the next12 it’s not [by starting a new bank],” said John vice president at Smith Mackinnon PA in Greeley was the attorneu for nearly all the startup banks in Floridas last year, including , which was scheduleds to open in St. Johns Countyy in April with atleast $13 million in capital. The bank has withdrawh its application from the FDIC and returned its capital to the Greeley said. “With St.
Johns Bank, in we were able to raise and put together a strong board andseasonedr management, but it became cleafr that [new bank] charteras were not being approved,” said Cindy president of St. Johns Of about eight startup banks Greeley works he said all are withdrawing at this point becauss of the increasing risks from incurring expensez including holding onto a employees and borrowing money while waitint forFDIC approval. Those banks can seek otherd options such as using their experienced management team and capital to invest in an existingFloridza bank. “That’s more in line with how the FDIC has indicatedthesr days,” Greeley said.
The FDIC did not respondr to requests for commentr bypress time. The FDIC will not say it is turning down but at thesame time, “ih light of the current economic environment, they don’t thinj they can reach a positive conclusion that the marker needs another bank,” Greeley “It’s difficult [for banks in to say, ‘Let’s just play it out,’ because each day is costingb you money.” There are several differenf types of regulators that banks need chartee approvals from, such as the if it’a a state-chartered institution or a nationalp charter through the .
But all paths lead to final approvaol by the FDIC to havethe bank’se deposits insured. It doesn’t matter if a startup is approved with the state orthe OCC, “it you don’t get approval from the FDIC, you’re not going anywhere,” said Brucer Ricca, financial administrator for the state banking As of late April, the Office of Financial Regulation’s division of financiao institutions had six banks that filed with the stat e for a startup sinc e March 2008. So far, the only one that receive d approval from both the state and the FDIC and has openedris , based in Eustis.
The five bankws that filed for a stat charter last year plus one that filed this year represent a big differenc e from the booming startup marketbefore 2007. Twelve denovo applications were filed with the state in 21 in 2006 and 25in 2005, Ricca said. St. Johnds Bank executives said in a previous interview that they wantes to start the bank with a cleanm balance sheet in a recession and by the time it they hoped to have a better understandinbg of the bottom and how to grow well from Many of the startup banks had a similar approach for starting ina “Now is a perfect time to starty a bank,” said Ken LaRoe, CEO and chairman of First Green Bank.
“We’re helping so many peoplee who have been turned down by other banks and there areother [potentiak startups] out there that could help that are not gettingt their charter and it’s a LaRoe said he gets at least one phone call a week from a banker trying to start a bank asking how First Green Bank got its charter. The bank exceedee its minimum capital targetof $15 million by raising $17.2 Despite being ready to open in Octobet and the fact that it’s the second bank that LaRoe helped start in it was not until Dec. 22 that the FDIC approvedd it. “I had plenty of the 3-in-the-morning, ‘Whag was I thinking?’ episodes,” he said.
“Noew that we’re open, what I have been showinhg them has cometo pass.” After the firstf 10 weeks, First Green Bank had $40 million in $20 million in deposits and $10 milliobn in loans. “And it’s good, qualituy stuff,” LaRoe said.