The consolidation wave that washed over Florida has turned the Tampa Bay area into a breeding ground for start-ups.

Though population growth in area has trailed the national average for years, seven of the 20 banks being formed in Florida will be in the Tampa- St. Petersburg metropolitan area.

"We are pretty close to overkill," said Richard P. Hunt, chairman and chief executive officer of Kendrick, Pierce & Co., a Tampa-based investment banking firm. "You have to wonder where the business will come from."

Consolidation set off the start-up wave.

"We have seen Village Bank, Seminole Bank, Citizens, First Citizens, Rutland Bank, and many others all acquired by larger institutions in the last few years," said Skip Carr, who is forming Cornerstone Community Bank in St. Petersburg. "We felt the frustration in the community and saw the opportunity."

But Mr. Hunt said some of the banks being formed are simply attempts to cash in. He noted that local banks have been selling for more than three times book.

"Guys are coming off bank boards thinking, 'I just made $1 million on a $1,000 investment. I want to do that again,'" Mr. Hunt said.

Kendrick, Pierce, which advises groups forming new banks, will only take clients whose organizers commit 40% of the start-up capital. The policy is the result of rumblings that some of the new banks are finding capital harder to raise than they expected.

Cornerstone's directors have committed to buy 43% of its stock offering, Mr. Carr said. Others organizing banks in the area did not return phone calls for this story.

To date, though, no institution has failed to raise the necessary funds.

That means there will be many new banks competing for the same business.

First Citrus Bank, for example, will be based in the Citrus Park section of Tampa when it opens this December.

Though no other start-up has targeted that market, the bank plans to start branching by the end of its first year, which could put it in another de novo's line of fire.

John M. Barrett, president and chief executive officer of First Citrus, insisted "there is enough business to go around." However, he said that the banks already announced are enough to fill that need.

"The window of opportunity is closing," he said. "If I were doing this 12 months from now, I would have some serious trepidations about being able to make the business work."

Still, local banks control just 10% of the Sunshine State's deposits.

"There are fewer community banks now than at any time in the history of Florida," said Art Simon, director of Florida's division of banking. "I think it is fair to say that communities can support more."

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