The new owners of Florida's Admiralty Bank have ambitious goals for their investment: to expand the $40 million-asset institution to $1 billion in just seven years.
A group led by Bruce A. Mahon, now its chairman, bought Palm Beach Gardens-based Admiralty for $8 million in February. Mr. Mahon is chairman of Princeton, N.J.'s, Carnegie Bancorp, which announced in December that it would sell to Sovereign Bancorp, Wyomissing, Pa.
"We hope to grow 35% internally and the rest by acquisitions," Mr. Mahon said. "We have done it before at Carnegie, and we believe we can do it again here."
In three years Carnegie's assets increased 121%, from $195 million at yearend 1994 to $431 million at Dec. 31, 1997.
Not long ago the emphasis at Admiralty was on staying in business, not expanding. In 1995, faced with $3 million of bad loans, the bank received a cease-and-desist order from state regulators. That order was lifted last December. The new owners will be more careful, Mr. Mahon said, noting that Admiralty has brought in seasoned veterans from a recently acquired local bank.
The five senior managers, including new president Ward Kellogg, joined Admiralty this month from 1st United Bank, Boca Raton, which was sold to Wachovia Corp. last November.
Mr. Kellogg was executive vice president and chief credit officer at $962 million-asset 1st United.
Kenneth H. Thomas, a Miami banking consultant, said Admiralty's lofty internal growth target can be reached if it can present itself as a local option.
"I think there are opportunities for community banks to attract customers from NationsBank and First Union," said Mr. Thomas, naming the two Charlotte, N.C.-based superregionals that are tops in Florida market share.
Still, the bulk of Mr. Mahon's planned growth would have to come through acquisitions. To pay for deals, the bank plans a public equity offering this fall.
Richard P. Hunt, chairman and chief executive officer of Kendrick, Pierce & Co., a Tampa bank consulting firm, said he doubts a $40 million- asset bank can raise enough money to buy its way to $1 billion of assets.
"At the premiums being paid right now, I don't know how you can buy enough to do that," Mr. Hunt said.
