Some start-up banks ready for business

You could call them the new kids on the block, even though their management and staff have decades of banking experience.

They are a rarity in the current banking climate: The start-up.

Gateway Bank of Southwest Florida and 1st Manatee Bank have each been opened less than two years and filed their applications for charters during a time when the wheels were coming off the banking industry.

Flush with cash, and without the loans tied to devalued real estate that some of their competitors are saddled with, officials at the banks believe they are sitting in an ideal position.

“We’re not focusing on internal issues,” says Gateway President and Chief Executive Officer Shaun Merriman, a 23-year banking veteran who most recently served as Southwest Florida’s area executive for AmSouth Bank in Sarasota. “We currently have zero past due loans, zero charge-offs and zero non-performing assets and we have a $50 million loan portfolio.”

Gateway recently reported $72 million in total assets, above management’s expectations.

The bank has money to lend and currently has three locations, including a newly opened branch on University Parkway.

Gateway is also in the process of moving into a new main office in an historic building on U.S. 41.

The bank will continue focusing on steady, safe portfolio growth, Merriman said.

“I can tell you we are focused on owner-occupied, commercial real estate, not speculative real estate,” Merriman said. “Right now there is really just no room for speculation.”

Gateway opened during a time when new bank charters were receiving much scrutiny.

Merriman said the charter application process, which traditionally took anywhere from eight to 12 months, actually took 15 months in the case of Gateway. The bank received final approval in March of 2008.

Just a few months earlier in November of 2007, 1st Bank of Manatee opened.

The two banks were the last charters approved in the area, according to the Florida Office of Financial Regulation’s Division of Financial Institutions.

In 2005, just before the real estate market began its collapse, a total of 25 banks had applied for charters in the state. That figure dropped to 12 in 2007 and eight in the period between February of 2008 and May of 2009.

Like Merriman, 1st Manatee President and CEO Thomas Hodgson believes he and his investors chose the opportune time to open a bank.

“Actually, at that point, we felt like we were opening at the exact right time,” Hodgson says. “Most of the problems that were existing with the larger banks were already there. Everybody had gotten into the heavy lending in real estate and residential properties. They were going gangbusters.”

And now they are paying the price with debt collateralized with property that has lost 40 to 50 percent of its value, Hodgson says.

Hodgson, who has more than 30 years of banking experience, says the bank plans to stay on course with one location in Parrish and one on Cortez Road until the market improves.

“We’re not planning any new branches for at least a couple of years, once the market picks up a little better,” Hodgson says. “We just want to grow the old-fashioned way.”

That said, the bank is ready to lend, Hodgson says.

“Again, the community banks, and especially the newer ones like Gateway Bank, they are the ones making the loans,” he says. “A lot of the older banks have either cut back on their lending or their qualifications to obtain a loan. They have tightened their lending.”

Frank Knautz, a local banking consultant who works with Gateway, acknowledges that it is very hard to open a new bank in the current climate.

“The regulators are taking a much stronger look at bank charters now. It’s very tough to get a bank charter,” Knautz says. “The economy is very different now. Not just in our area, but nationwide, there have been a number of banks that have come under tremendous scrutiny and there a number of banks that have failed.”

But Merriman says he believes the future is bright.

“We actually have a very nice pipeline of residential mortgage loans,” Merriman says.