It is too early to predict how many new banks will be organized in Florida this year, but the pace so far suggests a record total.
By the end of February six investment groups had applied for bank charters with the state's Office of Financial Regulation. That is a third of the tally for all of last year.
Regulators are bracing for the busiest year for reviewing charter applications since 1998, when Florida received 33 applications and approved 27. (Most new banks in Florida - all but two in the last four years - got state charters.)
"The high-water mark was 1998, and we are on pace to equal or exceed that," said John Greeley, a partner in the Orlando law firm of Smith, Mackinnon & Greeley who works with new banks. "The Florida market continues to be attractive for community banks."
For a decade the state has been among the most active markets for start-ups. Last year only Georgia had more, according to the Federal Deposit Insurance Corp.
Behind the trend are population growth and bank consolidation which generally spawns new banks.
Mr. Greeley said the stock prices of Florida banks and the premiums being paid to buy them are fueling the current start-up surge. Nine acquisition deals have been announced since September, all for banks with less than $1 billion of assets. They are fetching an average of 2.83 times book value - well above the national average of 2.14 times book, according to Highline Data Bank Services.
"Because of the number of sales in the state, community bank stocks have had high returns," Mr. Greeley said. "This fuels interest in new bank formation."
There are also a lot of experienced bankers who have lost jobs in bank mergers. Don B. Saxon, the director of Florida's Office of Financial Regulation, said many of the new banks are being led by bankers who have been on the state scene for decades.
"Top officers of those banks that have been merged sit on the sidelines for a few years and then want to get back in the game, so they decide to start their own bank," Mr. Saxon said.
Larry Roselle is an example. The 29-year banking veteran is the lead organizer of a group that has applied to open Sunrise Bank, in Cocoa Beach.
Mr. Roselle had been with the $596 million-asset Admiralty Bancorp in Palm Beach but left when Royal Bank of Canada bought it in January 2003.
After taking some time off he decided to start Sunrise. The area lacks community banks, he said. Of the six in Brevard County, where Cocoa Beach is located, only one has operations in the city - though Bank of America Corp., Wachovia Corp., and SunTrust Banks Inc. have branches there.
"With all the big guys, there really was a need for another community bank," Mr. Roselle said.
As with most small banks in formation, raising start-up capital has been no problem. Just a few months into the planning process the group has lined up most of the $11 million of start-up capital it sought, Mr. Roselle said. The bank is expected to open in the fall.
Because investor interest is so high, Mr. Greeley said, most start-ups in Florida - no matter where in the state - are typically raising $10 million to $25 million. The regulatory capital requirement is about $7 million.
There is also plenty of business to go around, and "more than enough deposits," he said. The economy and population keep growing "and the commercial banking business - the lifeblood of community banks - continues to expand."
Florida's population growth of 8.4% from July 2000 to July 2004 made it the nation's third-fastest-growing state. The Orlando area has grown twice as fast as the state average.
Mr. Saxon said the interest in starting banks will continue as long as the state's economy stays strong and banks that sell keep getting higher-than-average premiums.
"I don't see any reason why the pace wouldn't continue," he said. "And I certainly hope it does."
