Global Consumer Acquisition Corp.'s grand plan is back on track.

The blank check company wants to build one of the largest community banking operations in Nevada. The project was dealt a setback last month when its deal to buy the Nevada operations of Colonial Bank was nullified by that institution's failure and sale to BB&T Corp.

But on Wednesday, Global Consumer said it had signed a letter of intent to buy Service1st Bank of Nevada in Las Vegas. Aside from a pair of branches and $204 million of assets, the buyer would get William A. Martin, a seasoned banker (and former regulator) who could give it much-needed credibility with agencies leery of private-equity-type investors.

"Clearly, you can't have people from Wall Street and public companies buying banks and not have a management team — they aren't going to get regulator approval," said Martin, who would remain Service1st's chief executive once the deal closes.

Martin was the chairman, president and CEO of the $4.3 billion-asset Nevada State Bank in Las Vegas from 1999 to 2007. He joined Service1st last year. He also has been the president and CEO of two other Nevada banks and is a former deputy comptroller for multinational banking in the Office of the Comptroller of the Currency.

John Graynor, Service1st's president and chief operating officer and a 30-year industry veteran, would also stay after the takeover.

Such experience is seen as especially valuable for investment firms trying to break into banking.

"The most difficult piece is going to be the acceptance by banking regulators," said James Rockett, the co-head of the financial institutions corporate and regulatory group in the Bingham McCutchen LLC law firm. "There is a reluctance by banking regulators, and they have got their reasons for that reluctance, and whoever approaches them has to convince them that there is … a compelling reason for them to get into the regulated banking environment." He cited the Federal Deposit Insurance Corp.'s recent guidelines requiring higher capital ratios for private-equity firms that buy failed banks.

But "if you have solid management and sufficient capital, the regulators give that a favorable consideration," Rockett said.

Global Consumer, which is run by Hayground Cove Asset Management LLC in New York, raised $310 million in capital when it went public in November 2007 before setting out to buy an operating business.

"The regulatory process is certainly going to be much easier with capital in hand," said Rick Maroney, a managing director and principal at Austin Associates LLC in Toledo. "Capital is king."

Charles Crowley, a managing director at Stifel, Nicolaus & Co. Inc., said Global Consumer has some obstacles but that getting into the bank acquisition game is doable for the company.

"The regulators want to see a capable management team, a sound business plan and adequate capital," he said. "They are clearly interested in drawing more capital into the industry, and from that standpoint, if there is a credible management team and abundance of capital, that can lead to fairly quick approvals. Although nothing in the regulatory world happens real quickly.”"

In July, Global Consumer announced two deals, including one still pending to buy the $45 million-asset 1st Commerce Bank in North Las Vegas from Capitol Bancorp in Lansing, Mich. But the larger of the two deals got torpedoed last month when regulators seized the $25 billion-asset Colonial, in Montgomery, Ala., and sold it to BB&T in Winston-Salem, N.C. Global Consumer would have picked up 21 Nevada branches, $441 million of loans, and $492 million of deposits from Colonial. Mark Daigle, the president of Colonial's Nevada operations, was to lead Global Consumer's banking push — a role that will now go to Martin.

On Wednesday, Global Consumer said it is still in talks with BB&T to buy the former Colonial operations. BB&T did not return calls seeking comment.

Jason Ader, the chairman of Global Consumer, said that if it does make a deal with BB&T, it would be up to Martin and his management team what role Daigle would then play.

He also said Global Consumer had been in talks with Service1st since April and that Martin's bank was his company's first choice. "They are the No. 1 group that we could have possibly imagined doing this with," he said.

Jeff Davis, an analyst at FTN Equity Capital Markets, said he suspects BB&T will hang on to the Texas branches it got from Colonial but end up selling the Nevada ones. "It's so far afield," he said. "Texas is a different matter. More than likely, they'll hang on to that for the time being and get a feel for the market. The Texas piece is a great way to scout out the market."

Davis said he understands why Global Consumer would target the Silver State. "Nevada, from a long-term perspective, should have good demographics and migration from California," he said. "And they're entering at the right time — that is, when the state economically is on the mat."

As a special-purpose acquisition company, Global Consumer has a Nov. 27 deadline to buy a company or dissolve itself. Several hurdles remain. It must finalize and close the agreement to buy Service1st, and it needs shareholder and regulatory approvals for the 1st Commerce deal.

Blank check acquisitions are rare in the banking industry, and they have often fallen apart. One reason is that the investment vehicles are set up so their shareholders can veto deals and still make money.

Ader said he is confident Global Consumer's shareholders will approve the 1st Commerce purchase. "Our shareholders are excited about the opportunity in the state of Nevada," he said.

Service1st raised $50 million when it opened in 2007. So far it has not turned a profit, and Martin said this is partly because it has not found enough opportunities to put the money to work. "We have about $52 million in cash out of the $200 million in assets," he said. "That's yielding under 1%. … The difficulty is finding quality loans."

Size is another problem. With the capital it has, "we've been dealing in pretty small amounts," Martin said.

But Global Consumer's $310 million would let Service1st pursue bigger investments, such as takeovers of failed banks, he said. Global Consumer said it envisions eventually growing to $2.8 billion of assets.

One question is whether Global Consumer, which aims to convert to a bank holding company and rename itself Western Liberty Bancorp, would be subjected to the 10% leverage ratio requirement under the new FDIC guidelines or the typical 8% ratio for start-up banks.

Ader said he does not believe the stricter 10% ratio will apply to his company because it is publicly traded.

Bingham's Rockett said this is questionable. "What the regulators are going to do is look at a particular structure and determine whether that structure is one that will be embraced for the purpose of creating a source of strength for a subsidiary bank," he said. "I don't think any particular structure is immune from regulatory skepticism."

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