New bank zeroing in on Central Florida

Proposed Tampa startup begins with $100M cap.

American Commerce Bank, a proposed state-chartered bank that will be headquartered in Tampa, plans to expand into Central Florida early next year before entering six other markets around the state.

If approved by regulators, the bank's $100 million in initial capitalization will set a record for a state-chartered startup bank.

The board of directors also includes three well-known Central Florida businessmen: Dick Batchelor, former state legislator and founder of Dick Batchelor Management Group Inc.; John Mills, vice president and Florida regional manager of Brasfield & Gorrie; and James Pugh, founder of Epoch Properties Inc.

Don Adam, the planned bank's chairman and chief executive, says he wants the bank to replicate the quality of service that Barnett Bank once offered in Florida.

"I've had huge aspirations of creating what I would consider the model of banking, and that's what American Commerce Bank is going to be in Florida," he says.

American Commerce Bank's directors filed an application on Nov. 28 with state banking regulators and the Federal Deposit Insurance Corp. to create the full-service commercial bank.

Banking industry veteran

The bank's lead investor, Adam, is an industry veteran.

For nearly 11 years, he has owned and operated The Adam Corp./Group, an agriculture and livestock operation near Ocala, and Reliable Reports, a provider of underwriting inspections for property insurers in several states, including Florida.

In 1988 -- at the height of the savings and loan industry collapse -- Adam bought 14 failed financial institutions from the federal government and turned them into the largest privately held bank in Texas, First American Bank.

In March, Citigroup bought First American Bank, which had $3.5 billion in assets.

As for the new Florida bank, Adam says, "I've always aspired to create a bank from ground zero."

In choosing the board's 11 members, including nine from around the state and two out-of-staters, Adam says he wanted people with long-term ties to the local business community.

Batchelor, who spearheaded the 2002 half-penny sales tax campaign to benefit Orange County school construction, says, "I was flattered to say yes, and I look forward to helping them."

To serve the 'underserved'

The bank will target those commercial customers who aren't served by the dominant large out-of-state banks.

"In Florida, we think there's a group of professionals and businesses that are underserved," says Sam Davis, American Commerce's president and chief operating officer.

The bank's capitalization amount, if approved, would far exceed record-holder Great Florida Bank's $60 million in startup capital.

"This capitalization puts them on track to become a billion-dollar bank," says Chris Marinac, an analyst with FIG Partners in Atlanta.

Board members, who are contributing 99 percent of the capital in cash and without debt, have already committed the $100 million, Davis says. The rest will come from Adam's associates, Davis adds.

The major advantages include the ability to expand statewide and provide higher loan amounts -- up to $25 million, bank officials say.

Once approved, the bank plans to set up its headquarters and two other retail banking locations in Tampa that will employ 17 people initially, Davis says.

'Double-edged sword'

Orlando is the second market the bank plans to expand into, Davis says, noting other planned markets include Naples, Fort Myers, Miami, Fort Lauderdale, Jacksonville and West Palm Beach/Boca Raton.

American's goal, Davis adds, is to be in four of those markets within three years.

As in Tampa, American Commerce plans to establish a main banking center and two other retail banking locations in each Florida market.

With the high capitalization amount, "We'll have the ability to compete on parity with the large megabanks from outside the state of Florida," says Adam.

However, such a high capitalization can be a "double-edged sword," warns Jeff Harralson, an analyst for Keefe, Bruyette & Woods in Atlanta.

That's because the bank may not be able to get as high of a return on equity in the near term as banks with lower capitalization amounts, he says.

What will make or break the bank, Harralson says, "is the ability to hire significant talent."

Nevertheless, American Commerce's organizers believe their bank will achieve success.

"I think what we're going to do is build a financial institution the citizens of Florida will be proud to be associated with and something that will be enduring for many years to come," Adam says.

What are people saying about mortgages today:

Rates on 30-year mortgages edged down last week to a seven-month low. Mortgage-giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages fell to 6.3 percent, down slightly from 6.31 percent two weeks ago. It put rates at the lowest level since they were at 6.24 percent the first week of March.

Bank of Hawaii, Central Pacific Bank, Territorial Savings Bank and Wells Fargo Home Mortgages all cut their 30-year mortgage rates to 5.75 percent this week.

Most people think of a mortgage as a means to an end. After all, you buy a house, not a home loan. But a mortgage is much more than the path to homeownership. It is a financial instrument that must be managed, just like any other financial investment.