Jim White is building a super community bank in Florida.
This is no surprise, since Jim has been working in super community banks since 1950.
He started his career working for C.H. McNulty, who owned a majority stake in nine banks in Florida.
For Mr. McNulty, the No. 1 purpose for a bank's existence was to serve the community. He also believed in leaving local boards and presidents alone to do what they do best - run their banks.
Every employee was treated with dignity and respect, and rewarded with participation in the profits. As a result, the employees treated customers with respect.
Local Commitment
The banks were all high-class, high-profitability institutions committed to meeting the credit needs of their communities first. To ensure that commitment, they were required to reach 70% loan-to-deposit ratios within their communities before lending outside.
Jim White grew up in that environment. He ended up running six banks that were consistently in the top three in profitability and asset quality in their asset size categories.
The banks were run as independent units, by their own presidents. The only contact that the presidents had with the holding company was in board meetings.
The presidents had a lot of discretion, which created super performers in their communities. Those who did not do well were quickly let go, to avoid major debacles.
White to the Rescue
First Florida Bank Holding Co., made up of 11 banks, was formed in the early '70s and started acquiring other banks in order to create some liquidity for the stock.
In 1972, Flagship Banks was born, with 42 banks in the system, subsequently consolidated into 26 community banks.
Unfortunately, the holding company got into major construction lending - and into the Florida real estate crunch of 1973 to 1976.
While the holding company was losing money, the small community banks were making a fortune. The directors realized that - and picked Jim White as their new president.
When Jim took over, the company had $1.5 billion of assets, 240 people in the holding company, and 42 banks. In 1983, when Flagship Banks was sold to Sun Bank, the company had 140 offices, $4.5 billion in assets, and only 80 people on the holding company payroll, half of whom were loan review and audit personnel.
Half of the bank presidents came out of Jim White's previous organizations, which commenced management training in the early 1950s. Flagship was highly profitable when it was sold and commanded a significant premium.
A New Venture
Jim White retired, but the banking bug did not let up. He is now the chairman of three banks and is actively involved in a fourth. All are community banks in the same metropolitan areas.
Having witnessed the suppress of super community banking, Jim is back into the business of putting together a super community bank.
After public announcement of his intentions to build a holding company of six banks in southwest Florida, he started getting calls. He is now meeting with 15 individual banks.
Presidents of the banks meet once a month, and a couple of directors from each bank meet as a group quarterly. The purpose for all parties is to get to know one another and take a close look at each other's loans.
A target date for holding company formation was identified: Dec. 31, 1994.
Not all 15 banks are automatically included, and not all 15 are committed to coming into the holding company. Those who do would retain their names, boards, and presidents.
Stockholder Benefits
All banks in the holding company to be formed are to be committed to a book-for-book swap, so all shareholders will end up with more liquid stock, book value roughly equal to what they have now, and multipliers for futures sales.
Banks with significant problem loan portfolios will be excluded from the holding company.
Jim White is a visionary who built up two super community banks. He is about to realize his vision one more time.
