August 2, 2014

Report: Florida's Banks and TARP

Take It or Leave It?: Time will tell which banks made the right choice in seeking TARP funds -- or avoiding them.

Mike Vogel | 7/1/2009


“What TARP did was give us the capability to continue to make loans while we cleaned up the bank.”

— Matt Brown, CEO,
Premier Bank, Tallahassee

[Photo: Ray Stanyard]

The banks that have taken TARP funds say the program is working well for them and their local economies, however. Ken Cherven, CEO of First Community Bank of America in Pinellas Park, calls the $10.7 million in TARP capital his bank received “runway. Capital is runway, and in brutal market conditions you want as much runway as possible.”

The TARP bankers say keeping their capital ratios healthy has enabled them to continue lending. Matt Brown, CEO of Premier Bank in Tallahassee, says Premier used its $9.5 million in TARP money to expedite the removal of problem real estate loans from the bank’s books. “What TARP did was give us the capability to continue to make loans while we cleaned up the bank,” Brown says. And as it cleaned itself up, Premier also used part of the TARP money to build its mortgage staff, growing from sixth to second in local residential mortgage market share.

Naples-based TIB Financial, meanwhile, spent some of its $37 million in TARP funds to buy deposits of Cape Coral’s failed Riverside Bank of the Gulf Coast from the FDIC and nine branches. The move increased TIB’s presence in Lee and Sarasota counties, giving it a total of 28 branches.

First National Bank of Nassau County in Fernandina Beach beefed up lending with its TARP money, using part of its federal funds to boost mortgage lending to $319 million in the first four months of 2009, up from $148.3 million in the first four months of 2008, says CEO Mike Sanchez.


“Capital is runway, and in brutal market conditions you want as much runway as possible.”

— Ken Cherven, CEO,
First Community Bank of America
Pinellas Park

Other banks likewise are using TARP money to seize opportunities arising when competitors curtail lending or when business customers worry about their existing bank’s health. “We’re getting in front of clients we otherwise wouldn’t be able to get in front of. The worst of times for everybody else is the best of times for us,” says Gideon Haymaker, CEO of Seaside National Bank & Trust in Orlando ($543 million in assets). Haymaker is growing loans at $20 million a month and says he needed the TARP capital to continue growing. Seaside’s $5.7 million in federal money can be leveraged into $70 million in loans, he adds.

C. Andrew Lawrence, CEO at Marine Bank & Trust in Vero Beach ($140 million in assets), says TARP “was really a once-in-a-lifetime opportunity for us.”

Meanwhile, banks awaiting federal action on their TARP applications are left to fret, with their lending capacity depending in part on whom the government picks to get capital. Bradenton-based Horizon Bank waits for an answer on its application for $4.8 million in TARP money. CEO Charles Conoley says he can put it to work lending in Manatee County. After two competitors failed last year and other lenders cut back, he’s seeing the highest loan demand in years. Says Conoley of TARP: “I just wish I could use it.”

Alex Sanchez, president of Florida Bankers Association, says it’s a matter of choice. “There’s no stigma to receiving it or not receiving it at all,” he says.

Tags: Banking & Finance

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