Daniel Healy knows how to build multibillion-dollar community banks — and regulators know that.
Their comfort shows in the fact that his company, Bond Street Holdings LLC, is the first blind pool of investors that has been allowed to use a shelf charter to buy a failed bank. It has done so three times in Florida this year, including in its acquisition of Premier American Bank.
"The regulators want bankers to run banks, not private-equity people," Michael Rose, a research analyst at Raymond James & Associates Inc., said in reference to the onetime chief financial officer of the then North Fork Bank in Melville, N.Y. "Healy has that experience."
Fueled by more than $400 million in capital, Bond Street pulled Miami's Premier American out of the rubble in January and leveraged it to make two other federally assisted deals, most recently grabbing the failed Peninsula Bank in Englewood last Friday.
Though a dozen other investor groups have filed shelf charters to do something similar, analysts said Bond Street has succeeded because of the management team's extensive banking experience. Also, Bond Street has been willing to go after smaller franchises while other private-equity groups have had a bigger appetite.
Premier American now has more than $1 billion of assets and is quickly climbing the ranks as one of the 20 largest deposit holders among banks in Florida.
It is expected to get larger still, paced in part by competition from John Kanas, the former CEO at North Fork when Healy was CFO. Kanas became chairman and CEO of the revived BankUnited in Coral Gables after a hedge fund group, BU Financial Holdings LLC, purchased it last year with assistance from the Federal Deposit Insurance Corp. That deal broke the ice for other investor groups.
"We're going to see more [acquisitions] from Premier American because Healy has to constantly look at his former boss with BankUnited," said Ken Thomas, an economist and independent bank consultant in Miami.
Bond Street Holdings acquired its first failed bank, Premier American, on Jan. 22, picking up $300 million of assets. It named its charter Premier American Bank N.A. One week later, the bank won Florida Community Bank, with nearly $500 million of assets and $795.5 million of deposits.
Healy said regulators allowed the blind investor group to bid as no single holder had more than a 9.9% stake and most own about 4.4%. Regulators tend to be more comfortable with a company whose ownership is divided into smaller, more even stakes.
In October Bond Street was the first shelf charter approved by the Office of the Comptroller of the Currency. It then raised about $440 million in capital.
"What we said [to investors] was if we don't spend 50% of the money in the first 18 months, you can opt to take it back," Healy said.
Bond Street has spent more than half of its initial capital in about six months by purchasing the three failed banks.
Premier American now has roughly $1.55 billion of assets and $1.46 billion of deposits. This ranks 14th in deposits among Florida banks, between Sabadell United Bank of Miami with $1.49 billion of deposits and Lydian Private Bank in Palm Beach with $1.44 billion, as of March 31.
Healy said about $170 million is left over from the capital-raising effort that can be used for other FDIC-assisted deals.
At Premier American, Healy would like to replicate the growth spurt of his former employer, North Fork, which expanded from $2 billion of assets in 1992, to $60 billion of assets when it was sold to Capital One Financial Corp. in 2006.
Bond Street's initial intention was to expand across Florida and Georgia. But Healy said the company has since decided to focus on south Florida as an area where it can tap into the commercial market when things turn around.
The reach of its most recent acquisition, Peninsula Bank, was limited, however, because its 13 branches were split on both sides of the state rather than having its branches concentrated in one county to gain a larger market share and profitability, Thomas said.
Another reason Premier American keeps winning deals might be that other private-equity groups are unwilling to go after smaller fish.
"To some extent, they may just be getting the smaller banks that no one else wanted to take," said Chris Marinac, an analyst at FIG Partners LLC. "You have to build a real bank underneath this."
Another 10 to 15 groups are trying to do something similar with shelf charters, typically raising $400 million to more than $1 billion in capital, said Chip MacDonald, a partner at the Jones Day law firm in Atlanta.
The reason no similar groups have acquired a failed bank is that they must land a bank big enough to support their capital, he said, and successful bidders for most large community banks have tended to be existing banks.
Among the 14 failed banks in Florida so far this year, half were taken over by out-of-state multibillion-dollar banks.
Yet analysts say there will be plenty of opportunities for Premier American and other groups to expand in the coming year, given the number of troubled banks remaining in Florida.
"One out of every three banks in Florida is a problem bank," Thomas said. "We are on the road to leading the bank failures in the nation."