Banks work to avoid fallout

As a rash of federal enforcements have hit financially shaky banks, healthy institutions are doing what they can to deflect the negative publicity.

To set themselves apart from their financially troubled brothers, officials at banks with solid ratings are communicating more with clients and taking pains to pump up their customer service.

Charles Brown, chairman and chief executive officer of Insignia Bank, said the Sarasota bank emphasizes open communication.

“We do a lot of e-mail updates to our shareholders and customer base,” Brown said. “We do quarterly shareholder updates and we have collateral material at the client service desk stressing the capital strength of our bank.

“Most importantly, folks like to be able to get together and talk directly with the president,” he said. “I make my presence on the floor, on the phone with clients and at their offices.”

Officials at banks that have avoided regulators’ penalties attribute strong loan underwriting practices and healthy capital as the way they maintain a good standing.

“We do things the old-fashioned way,” said Thomas Hodgson, president and chief executive officer of 1st Manatee Bank in Parrish. “We’re slow and methodical as to how we are growing this bank. We’re not out to be the largest community bank; we just want to be a good one, serve the community and be profitable.”

In the latest Bauer Financial quarterly bank ratings, 1st Manatee Bank was rated as a start-up bank, meaning it’s too new to be evaluated by the Coral Gables firm.

Hodgson predicts the institution will get favorable marks when it can be evaluated. He stressed that 1st Manatee Bank, which was established in November 2007, is focused on safe lending to ensure the bank avoids trouble with regulators.

“Because we’re a relatively new bank, we did not get hit with the problem real estate loans, therefore we have been very selective going forward on the type and quality of loans we make,” Hodgson said.

Bauer Financial frowned upon several banks in Manatee and Sarasota counties when it released its most recent quarterly bank ratings for the second quarter ending June 30.

Seven banks — three in Bradenton — were deemed troubled or worse.

And in recent days and months, some banks have been issued cease-and-desist orders, asked to raise capital or placed on the FDIC’s failed bank list.

On Monday, Orion Bank of Naples received a cease-and-desist order, becoming the second area bank in the past two months to receive the enforcement. Century Bank of Sarasota received a cease-and-desist order in August. Three local banks — First State Bank of Sarasota, Community National Bank of Sarasota County, and Colonial Bank — were placed on the FDIC’s failed bank list in August.

But Gateway Bank of Southwest Florida in Sarasota has satisfied regulators since the bank was chartered in May 2008 by going from $19.5 million in fresh capital as a start-up to $95 million in total assets.

Shawn Merriman, bank president and chief executive officer, projects the bank will be able to grow to $300 million in assets.

“We knew when we began organizing the bank in November 2006, that the financial world was changing and we clearly knew there was a dramatic slow-down in real estate lending, and as a result our business plan from the beginning was not predicated on commercial real estate lending actions,” Merriman said. “Our focus is small- to medium-size businesses.”

Charles Brown, chairman and chief executive officer of Insignia Bank of Sarasota, says two major factors keep his bank healthy.

“One, we’re still able to lend, which creates additional revenue for banks,” Brown said. “And, two we started with and continue with extremely strong capital.”