Former Bank of America Corp. Chief Executive Officer Hugh McColl Jr. and Chief Financial Officer Marc Oken are among investors backing a group raising as much as $600 million to buy Florida banking assets.
Falfurrias Capital Partners, a Charlotte, N.C.-based investment firm co-founded by McColl and Oken, has agreed to invest an undisclosed amount in North American Financial Holdings, Oken said in an interview. North American is led by Gene Taylor and Chris Marshall, two other former B of A executives.
Buyout firms are piling into the banking industry as it recovers from more than $1.7 trillion in credit losses sparked by the housing market collapse and global recession. Raising money is proving easier than acquiring regulatory approval to buy one of the hundreds of small U.S. banks expected to fail over the next few years, said John Douglas, a partner at Davis Polk & Wardwell LLP.
"There's a suspicion among regulators that private-equity groups are in it for a quick buck or you will make regulators look bad if you buy something cheap and then turn around and flip it," he said. "Regulators seem to believe that existing institutions can absorb enough of the failed banks to get by."
The Federal Deposit Insurance Corp. has overseen 140 bank failures this year, the fastest pace of dissolutions in 17 years. The FDIC had 552 banks with $345.9 billion in assets on its confidential problem list as of Sept. 30.
A group led by Stephen Ross, 69, of New York-based Related Cos. received federal approval in October to bid on lenders seized by the FDIC. The Related group is raising almost $1 billion for their effort.
"There will be a significant uptake in M&A activity and there will be heavy private equity activity," said Terry Moore, managing director of Accenture Plc's North American banking practice.
North American is expected to seek a bank charter early next year that would enable it to bid for banks, Oken said.