This maxim doesn't hold true for community banks, however. Three out of the seven Florida IPOs in the first half of this year are small banks looking for extra cash to capitalize on customer frustration with out-of-state banking giants, and there's yet one more waiting in the wings. Analysts expect even more bank offerings in the latter half of the year as the community bank trend continues.
Marine Bancshares, Naples
CEO: Richard Horne
IPO Proceeds: $11.5 million
1998 Interest Income: $3,525
1998 Loss: $315,567
This company wins the award for the most unusual board of directors: A physician, a real estate broker, a mortician and the former CEO of local communications firm Palmer Wireless join three bankers. Seems they feel big banks in Naples aren't meeting the needs of the community, so they'd like to start their own bank. Marine National Bank of Naples exists only as a gleam in organizers' eyes, yet it's already gone public, with plans to open a branch at Collier County's third-busiest intersection sometime this year. Getting the public to pay start-up costs does seem a great financing strategy, and the prospectus does make, um, interesting reading. Ever wondered how IPOs get priced? In Marine Bancshares' case, totally arbitrarily! Says the prospectus: "This price is not based upon earnings or any history of operations, does not necessarily bear any relationship to the company's net worth, book value, revenues, or other established criteria of value, and should not be construed as indicative of the actual present or anticipated future value of the common shares." OK, then. The motley group of directors, by the way, has put its money where its prospectus is and snapped up about 250,000 shares of the IPO at $10 a pop.
CNB Inc., Lake City
CEO: K.C. Trowell
IPO Proceeds: $12.8 million
1998 Interest Income: $21 million
1998 Earnings: $2.7 million
CNB National Bank hopes to capitalize on big-bank consolidation and population growth in northeast Florida to grow its franchise. The expansion plan includes new branches in the Gainesville and Jacksonville areas, and a new Jacksonville headquarters. Smooth sailing so far, except for a sudden change at the top: In March, President and COO Corey Coughlin resigned after just nine months with the company. The new bigwig is veteran Jacksonville community banker Bennett Brown.
FloridaFirst Bancorp, Lakeland
President: Gregory Wilkes
IPO Proceeds: $27 million
1998 Interest Income: $31.9 million
1998 Earnings: $2.4 million
First Federal Florida (FloridaFirst is the parent company) has been doing business in Polk County since 1934, and it has held onto that small-town, downhome feel -- so downhome it's just now getting around to putting ATMs in its nine branches. The IPO is part of a modest -- and much-needed -- makeover aimed at making First Federal a bigger player in commercial lending, jazzing up its technology and grabbing a bigger share of Polk and Manatee counties' growing deposit base. Bank executives hope these moves will offset the declining margins in First Federal's core residential loan business, but they'll need to hurry to be competitive in an increasingly competitive market.
Insurance Management Solutions Group
St. Petersburg
CEO: David Meehan
IPO Proceeds: $36.9 million
1998 Revenues: $63.8 million
1998 Earnings: $3.8 million
No one would call administering insurance claims a glamorous business, but it's sure been a pretty good living for Insurance Management Solutions Group (IMSG). The company provides a variety of outsourcing services for major property and casualty insurers specializing in the flood market. Another division reports to insurers and mortgage lenders whether properties are in flood zones. IMSG is a spinoff of St. Petersburg-based Bankers Insurance Group, and their relationship remains tight. Last year, Bankers Insurance accounted for 95% of IMSG's outsourcing revenues -- 56% of total revenues -- and three IMSG directors play key roles at Bankers Insurance. Other directors include state Sen. John Grant, R-Tampa, and Florida Bankers Association CEO Alex Sanchez. IMSG officials think their outsourcing business will increase as insurers look for new ways to cut costs, but will other insurance companies want to do business with a company that's 63% owned by a competitor?
Intelligent Life Corp.
North Palm Beach
CEO: William Anderson III
IPO Proceeds: $45.5 million
1998 Revenues: $3.8 million
1998 Loss: $2.8 million
If you've scanned your local newspaper or surfed the Net trying to compare credit card rates or ATM fees, you've likely made contact with Intelligent Life. Begun 23 years ago with the publication Bank Rate Monitor, the company now provides all sorts of banking and finance data to magazines and newspapers, and its flagship Bankrate.com has affiliations with the likes of America Online, Usatoday.com and Money.com. It's not stopping there: Intelligent Life has created new financial websites targeted at women, college students and Spanish speakers, and the company recently recruited a Merrill Lynch M&A adviser to scout acquisitions. Surprise -- the company loses money -- but, remember, this is the Internet we're talking about. The market says Intelligent Life is worth $134 million.
Pinnacle Holdings, Sarasota
CEO: Robert Wolsey
IPO Proceeds: $224 million
1998 Revenues: $32 million
1998 Loss: $42 million
Pinnacle Holdings is betting that Americans won't soon tire of cell phones. In just over four years, Pinnacle has amassed 1,150 wireless communication towers, in major Southeast U.S. markets like central Florida, that Pinnacle rents out to telecommunications companies. The towers are expensive to buy and build, which explains Pinnacle's IPO and last year's $325 million debt offering, and the depreciation expense is brutal. But, oh, the cash flow: $25.8 million last year, or 81% of revenues.
Smith-Gardner & Associates
Delray Beach
CEO: Gary Hegna
IPO Proceeds: $52.9 million
1998 Revenues: $33.7 million
1998 Earnings: $3 million
Internet retailers may not be making any money, but companies whose customers are Internet retailers sure are. Smith-Gardner & Associates sells software that automates order fulfillment and e-commerce for more than 200 direct marketing firms, e-tailers and catalog companies. Analysts predict 40% earnings growth this year and 48% next year. Investors can expect a stock-price roller coaster, but one thing's for sure: The IPO made founders. Wilburn Smith and Allan Gardner rich. The two men each pocketed $2.4 million from the IPO, and their remaining holdings are worth about $30 million apiece.
Offerings in the Pipeline: Companies that have plans to go public
Suncoast Bancorp, Sarasota Bank holding company
American Marine Recreation, Orlando Boat dealerships
Perfumania.com, Miami Internet retailing
Onlinetrading.com, Boca Raton Internet brokerage
Cybear, Boca Raton Healthcare technology
Paradyne Corp., Largo Broadband distributor
Mortgage.com, Plantation Online lender
SBA Communications, Boca Raton Wireless towers