Make us your home page
Instagram

One bank catering to the rich, trying not to crater

When serving the wealthy, style and image are key. So when Palm Beach-based Lydian Private Bank expanded to Tampa in 2006, it threw an elite party at the ornate Tampa Theatre, complete with live white-faced statues of ancient figures and robed maidens serving champagne.

No fool when pursuing those with at least $10 million to invest, the federally chartered savings bank named itself for good reason after the ancient Greek city state of Lydia, which invented the use of coins for trade. Lydian's plush and well upholstered branch on Tampa's Franklin Street is run by area veteran banker-to-the-well-heeled and relentless socialite Cary Putrino.

In good economic times, this is all as it should be when wooing clients with deep pockets. Unfortunately, these are not such times. Beneath the Lydian veneer is a seriously struggling bank under pressure by federal regulators to raise new capital. In September, the bank signed a cease-and-desist order from regulators saying the bank must stop its poor lending and accounting practices and bolster its thin capital.

New quarterly ratings from Bauer Financial that assess the health of banks from five stars (best health) to zero stars (seriously weak) just demoted Lydian from two stars to zero stars. It's a category many banks cannot escape, especially in the wake of the Great Recession. Investors are wary of giving a wheezing bank more money, especially when regulators are pushing many of the nation's zero-star banks (Florida has 46 of them) into the hands of stronger ones.

In the first three months of this year, the latest quarter available, Lydian lost $23.4 million. Lydian executives in Palm Beach and Tampa declined to talk to me directly, sending me instead to a Miami public relations firm that, in turn, sent me this statement on behalf of Lydian:

"Lydian Private Bank has an investor base that is participating in a capital raise ranging from $90 (million) to $150 million. These investors remain fully engaged as they continue to work diligently with the bank to be in a position to close the transaction during the third quarter of this year."

I wish Lydian well. But I've read similar statements issued by zero-star banks for years.

It's curious that a boutique bank, whose sole mission is to make rich people its clients by promising them sophisticated money management, finds itself in need of an enormous investor bailout to avoid government seizure or sale.

The home page of Lydian's website features a large, long-billed fish seizing a lesser fish in its mouth. A quotation characterizes the bank's bend-over-backward attitude for wealthy clients. It says: "The answer is 'yes.' What's your question?"

The site credits Lydian's success to its top management's "bold leadership and highly qualified, seasoned, professional staff."

But Lydian wasn't always Lydian.

The bank started in the 1990s under the name VirtualBank back when Internet fever was high. News reports say former Miami Dolphins quarterback Dan Marino and ex-WorldCom chief Bernie Ebbers (now in prison for fraud) were both early investors. When VirtualBank lost its cachet, it morphed into Lydian Bank with a new mission to help millionaires.

Its latest goal? Survival.

Robert Trigaux can be reached at trigaux@sptimes.com.

One bank catering to the rich, trying not to crater 06/15/11 [Last modified: Friday, June 17, 2011 12:44pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. New DEP secretary says there's no conflict in political side businesses

    News

    TALLAHASSEE — When Noah Valenstein, the newly appointed head of the Department of Environmental Protection, was applying in April to be the state's top environmental regulator, he left one thing off the application: Companies he started and his wife runs have been paid nearly $1 million by politicians and lobbying …

     Noah Valenstein got the job as secretary of the Department of Environmental Protection on Tuesday May 23rd, on a unanimous vote by Gov. Rick Scott and the Cabinet. He will take the helm on June 5, with a salary of $150,000 per year. [Florida Governor's Office]
  2. New stores coming to Tyrone Square Mall, like Bath & Body Works

    Retail

    Tyrone Square Mall will welcome a half dozen new stores, like Bath & Body Works and MidiCi's The Neapolitan Pizza Company, this summer.

  3. Target Corp. reaches $18.5 million settlement with 47 states over data breach

    Retail

    Target Corp. has agreed to pay Florida $928,963 out of a newly-announced $18.5 million settlement over a huge data breach that occurred in late 2013.

    Forty-seven states and the District of Columbia have reached an $18.5 million settlement with Target Corp. to resolve the states' probe into the discounter's massive pre-Christmas data breach in 2013. 
[Associated Press]
  4. Gov. Rick Scott's family history of alcohol abuse could decide 'liquor wall' bill

    Legislature

    TALLAHASSEE — Gov. Rick Scott must decide Wednesday whether to let Walmart and other big-box stores sell liquor, and he says a factor in his decision is the history of alcohol abuse in his family.

    Florida Governor Rick Scott is considering a veto of a bill that would allow Walmart, Target and other big box retail stores to sell liquor. [Andres Leiva | Tampa Bay Times]
  5. Tampa lands Super Bowl in 2021

    Bucs

    TAMPA — Record rainfall in Los Angeles ultimately may end Tampa Bay's drought of hosting the Super Bowl.

    Mike Tomlin celebrates with LaMarr Woodley and Troy Polamalu after the Steelers beat the Cardinals in 


Super Bowl XLIII  on February 1, 2009 at Raymond James Stadium in Tampa. [Times files (2009)