When USAmeriBank in Largo, Fla., opened with a modest $12 million of capital 18 months ago, it aspired to be no more than a boutique bank in Pinellas County.
But then the state's real estate market went bust and USAmeri-Bank pounced on the chance to win business from hobbled competitors. It raised $28 million more in capital last summer and, since then, has hired teams of lenders throughout the Tampa Bay area, opened branches in neighboring Hillsborough County and, just last week, announced its first-ever acquisition.
Already one of the fastest-growing start-ups in recent memory, USAmeriBank would have more than $400 million of assets once its deal for the $78 million-asset Liberty Bank closes this year.
"We are definitely opportunistic," Brad McMurtrey, USAmeri-Bank's president, said Tuesday. "A lot of banks are having problems because of credit quality and liquidity," and this has given his bank a chance "to serve their customers."
Other industry executives agreed that new banks are well-positioned to take advantage of market disruptions caused by the real estate meltdown. Many start-ups are flush with capital and not weighed down by piles of bad loans, and they are touting these advantages to snap up customers — and employees — from rival banks that are scaling back lending.
There is always the danger of start-ups growing too fast, but observers said that is less of a concern now than in the past because the banks are not making risky construction loans or hiring inexperienced lenders. USAmeriBank, for example, has grown mostly by hiring lenders with established books of business. As of June 30, it had no loans that were past due.
Now is also a good time for start-ups to be considering acquisitions, bankers and other industry observers said.
First Foundation Bank in Irvine, Calif., opened for business in October intending to use much of its $32 million in start-up capital to fund residential construction loans in Southern California.
But demand for such loans has weakened, and now it is looking to use some capital to buy troubled banks.
"We believe in Southern California there will continue to be a few banks that were very deep in construction or subprime lending that may not make it," said chairman and CEO Scott Kavanaugh. "We are in a strong position to be able to build out our footprint and be successful in terms of possibly acquiring some institution."
This is not to say that these are banner days for all start-ups. The slowing economy has left some start-ups competing with too many banks for too few quality loans, and some banks in organization are finding that capital is not as easy to come by as it was a year or two ago.
But for the start-ups that were able to raise sufficient capital and managed to avoid getting caught up in construction lending, there is no shortage of opportunities for fast growth, said T. Stephen Johnson, president of the consulting firm T. Stephen Johnson & Associates Inc. in Atlanta.
"For the first time in many, many years, new banks can build both the asset and deposit side of the balance sheet," he said. "All of a sudden you don't have to fund everything with brokered CDs."
Mr. Johnson is also a director of the two-year-old Bank of Atlanta. Larger banks are cutting off good customers, he said, and as a result the $224 million-asset Bank of Atlanta has $85 million of loans in its pipeline.
Bud Stalnaker, the chairman, president, and CEO of the $68 million-asset Florida Traditions Bank in Dade City, said it has picked up roughly 100 customers from other banks since it opened its doors in December. Many were disgruntled, he said, because they had lost their points of contact at previous banks when bankers were fired.
So many established banks are focused on "putting out fires" that good customers are not getting attention they are used to, he said. "Therefore, it's a better time for us to be out calling on potential customers."
What surprises him most is that some banks are not even fighting to save the relationships. "These are seven-figure-net-worth people," Mr. Stalnaker added. "I'd think you'd want to hang onto those guys."
Media coverage of bank failures has particularly spooked customers, and many are moving their deposits into banks that they know are well-capitalized. This includes start-ups.
Also, with fewer banks competing for loan business, start-ups have a better shot at setting loan terms to their advantage, for example, by requiring the borrower to move deposits to the bank as well.
Mr. Stalnaker said the customers he has lured from other banks have both loan and deposit relationships with Florida Traditions.
"We don't make a loan unless they're moving everything," he said.
Still, the climate is not ideal for all start-ups. In Las Vegas, where more than half a dozen banks opened just before the real estate market soured, competition for quality loans is so intense that Fifth Street Bank, which opened in early 2007, voluntarily shut its doors in June because it could not find loans worth making.
Through Aug. 25, 56 banks had opened this year, according to SNL Financial LC, down from 90 through the same period last year and 106 two years ago.
Observers said that the pace has slowed for two reasons: Investors are less bullish on banking than they have been, and fewer acquisitions means fewer displaced executives trying to organize new banks.
With many investors remaining on the sidelines, some banks in organization are likely to open with less capital than they intended.
Organizers of First National Bank of Gulf Coast in Naples, Fla., have so far gotten commitments for $33 million of the $50 million they hope to raise by the time the bank opens in January and are now considering reducing their target, said Garrett Richter, who is to be the bank's president.
Nevertheless, Mr. Richter said, he believes the bank's timing is good because when it starts making loans the value of the collateral will not be as inflated as it was during the real estate boom. Data from the Naples Area Board of Realtors shows that the median home price in July had declined about 30% overall from the year earlier.
"If we were to have come into this environment two years ago, we would have started with zero bad loans, but we could have been making loans in an environment with inflated values," Mr. Richter said.
Jeff Watson, the president and CEO of the one-year-old Bank of Manhattan in El Segundo, Calif., said his bank, too, opened in the right place at the right time — and not just because its branch is across the street from an IndyMac Bank branch. (IndyMac was seized by regulators in July.)
"There was still local capital available, and now we are able to take advantage of the recession we are in," Mr. Watson said, "not because we are smart but because luck is a big factor."
The bank initially raised $25 million, and Mr. Watson said it is adding $15 million of fresh capital to fuel growth. It would consider acquisitions, but mostly it is looking to hire experienced bankers.
"We are seeing a lot of personal banking people no longer marketing and taking care of their clients but being moved into workout positions," Mr. Watson said. "So we are looking to pick up some teams. We want to be poised to take advantage of any opportunity that may arise."
First Foundation is looking to raise another $10 million in part to scoop up more talent.
"There are an awful lot of talented people at other banks, and frankly those people are concerned about prosperity at the institution they are at," Mr. Kavanaugh said.
It also wants to have extra capital on hand in case opportunities to add branches or whole banks arise. "We are very much looking to acquire assets that will help us build our footprint," he said.