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New bank sets start-up standard

American Commerce Bank files for state approval to launch with $100-million in capital.

Published November 30, 2005

A new Tampa bank is shattering state records for start-up capital and has lured some of the area's most influential business players to its board of directors. American Commerce Bank, which will be headquartered at 4830 W Kennedy Blvd., applied for federal and state regulatory approval Tuesday.

The proposed Tampa bank is flush with $100-million in capital - a sum that dwarfs the financial backing behind typical new banks - even before it opens its doors. Its president is a former regional chief for industry giant Bank of America. And its board is stocked with such heavy hitters as University of South Florida president Judy Genshaft, renowned Republican Party fundraiser, developer and former Ambassador to Italy Mel Sembler, and Tampa Bay area developer Lee Arnold Jr.

Chairman and CEO Donald A. Adam, the 70-year-old Texas tycoon who put the team together and personally supplied $91-million of the bank's capital, feels more than confident. "In my opinion, we have as formidable a group of individuals as you could assemble," he said in an interview Tuesday.

Even among such a big-name board, Genshaft's name stands out. Though she has made a concerted effort to push into the highest ranks of Tampa Bay's business leaders, it remains rare to find the president of a large state university serving on the board of a startup company.

Genshaft intrigued Adam for several reasons. She would contribute to the board's diversity, he said. She sits on the board of a successful family business, Ohio-based meat producer Fresh Mark Inc., run by her brother. And she is chairman of the Greater Tampa Chamber of Commerce's Committee of 100, which gives her access to some of the state's most powerful companies and keeps her abreast of the latest industry developments.

"You want to touch every tentacle you can within the state, because of its enormity and its mass," Adam said.

Among all 11 directors, Genshaft's investment tied for smallest: $135,000, or about 0.135 percent of total shares. Sembler was the second-biggest investor next to Adam, at almost $2-million. Arnold put up $1-million.

University spokesman Michael Reich said Genshaft's contract allows her to sit on two for-profit boards and does not prohibit her from investing in a business enterprise. "As a university president, she doesn't surrender her rights as a private citizen," Reich said.

Genshaft talked with each trustee personally - Arnold is one of them - and formally disclosed her plan by letter to board chairman Dick Beard on Oct. 31, according to Reich. "I will not permit any unauthorized (use) of the USF name, logo, property or resources," she wrote. "The outside activity that I have disclosed will not interfere with the full and faithful discharge of my public duties."

The university currently banks with Bank of America and SunTrust. Genshaft did not return a call seeking comment Tuesday.

CEO Adam and bank president Sam Davis II, a former Barnett Banks and Bank of America executive who retired in 2000, both believe a successful bank needs directors who can open doors. They also plan to target up to 30 percent of their loans in real estate developments.

The two executives naturally turned to potential directors like Sembler, whose Sembler Co. developments include St. Petersburg's Baywalk entertainment complex; James Pugh Jr., CEO of housing developer Epoch Properties Inc.; John Mills, Florida regional manager for contractor Brasfield & Gorrie; and Colliers Arnold namesake Arnold. Davis said a number of the 11 directors are his former banking clients.

American Commerce Bank joins a booming community banking industry in Florida. Twenty-two banks have opened this year in the state, the second largest number next to California, said Alan Kline, community banking editor at trade newspaper American Banker. Many are attracted by the state's fast-growing population, which means lots of depositors and real estate loans. Many seek to make millions of dollars by selling to a larger competitor in a state where banks are rapidly consolidating.

"Typically what they'll say is, "There's a void in the community for a small-business bank," Kline observed. "But really what they want to do is build it up and sell it in five years."

Adam's holding company in Bryan, Tex., owns real estate, construction and other subsidiaries worth more than $1-billion by his own count, as well as thoroughbred horse breeder Courtlandt Farm just south of Ocala. He is also a banking veteran.

In 1988, his Adam Corporation/Group bought 11 failing savings and loans from the federal government for about $80-million in cash with a plan to turn them around. Despite some problems - he sued the government in 1992 for allegedly failing to disclose just how troubled the institutions were - First American Bank grew to include 106 branches in Texas, 120,000 customers and $4.2-billion in assets through a combination of internal growth and acquisitions.

Earlier this year, Adam Corp. sold the company to industry giant Citigroup for an undisclosed sum that one analyst estimated at $750-million. Adam declined to disclose the actual figure, but the deal easily gave him the cash he needed for American Commerce. He said he looks forward to creating a bank from scratch according to his own business plan rather than from 11 rickety savings-and-loans and a prayer.

Though most community banks start with less than $20-million in capital, American Banker's Kline said, more and more are starting with upwards of $30-million. Doing so allows a bank to grow faster and make more loans, which are governed by strict regulatory guidelines.

Adam currently splits his time between Texas and his Florida farm but plans to spend more now in Tampa. He said investing $100-million would attract experienced staff, allow the bank to grow without having to repeatedly raise money, and provide a financial cushion against some of the high costs that startups encounter.

Dick Bove, a banking analyst in Pinellas Park with Punk Ziegel & Co., is skeptical of American Commerce's business plan, which is to grow one metropolitan area at a time by targeting moderate-sized businesses that are too big for most community banks to handle and too small to interest the megabanks.

Consumer lending has peaked, he said. Housing is peaking, too, which could slow the pace of migration into Florida. Meanwhile, larger banks are aggressively adding branches and courting mid-sized clients.

Adam, whose bid to buy a majority stake in another Florida startup bank in 2002 was rejected, is undeterred. He said he does not plan to sell the bank for a quick profit, either. "You can (write) it down," he said. "It won't be."

Times researchers Angie Drobnic Holan and Connie Humburg and staff writer Barry Klein contributed to this report. Scott Barancik can be reached at or 727 893-8751.

[Last modified November 30, 2005, 02:15:38]

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