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Republican CFO candidate Atwater downplays role in failed bank

TALLAHASSEE — Jeff Atwater says nearly 30 years of community banking experience gives him a "unique insight" into the duties he would face if elected as Florida's chief financial officer.

But Atwater, the Senate president from North Palm Beach, downplays the six years he spent with Riverside National Bank, a Treasure Coast bank taken over by federal regulators this spring.

Atwater left Fort Pierce-based Riverside in February 2009 and says he had no control over the bank's investment policies. But his Democratic opponent, Loranne Ausley, says the episode shows Atwater's business record isn't entirely spotless.

Atwater 52, earned a master's in business at the University of Florida, and spent nearly 20 years at Barnett Bank, including stints as president of Barnett's Treasure Coast and Broward divisions. He also helped with the transition as Barnett was acquired by NationsBank and later Bank of America.

Then in 2002 he was hired at Riverside to help the bank expand its footprint in Palm Beach County. At the time, Atwater was a state House member gearing up for a high-profile Senate run against former Attorney General Bob Butterworth.

Atwater said he wasn't hired "because I was an elected legislator." Instead, he cited his deep roots in the area and that he could "open doors for them in the community."

Former Riverside board member Jim Russakis cited Atwater's connections as a key reason he was hired.

"He was just able to move into there and make it happen," Russakis said, citing two failed expansion attempts by previous managers.

The bank first started having problems in late 2007, with mounting past-due commercial loans, Russakis said. Later the bank's residential loans began to falter. The bank lost $139 million in 2008 and another $131 million the next year.

In October 2008 the bank entered into an agreement with federal regulators that required it to limit the risk of its commercial loans, improve other "criticized" loans the bank made and correct certain "violations of law" outlined in a separate, sealed document.

In April, the Federal Deposit Insurance Corp. seized Riverside's 58 branches and $3.4 billion in assets and sold them to TD Bank, the U.S. arm of Toronto-Dominion Bank. The FDIC covered $491 million in deposits.

University of Central Florida economist Sean Snaith said Riverside was one of more than 200 banks that failed during the real estate bust.

"They got into too many difficult loans and lacked the capital to withstand those loan failures," he said. "Should they have made these loans? Well, obviously not. They made decisions that were similar to those being made at a lot of other banks."

Atwater said he left Riverside in February 2009 so he could focus fully on his duties as Senate president. A month before, 35 employees were let go and founder Vernon Smith retired as president. The bank's four-star rating had been downgraded to two stars by Coral Gables-based BauerFinancial Inc. The bank later received a zero-star rating.

Atwater notes that he was not a member of the bank's board of directors and wasn't on the committee that controlled the bank's investments. The bank's hierarchy put the eight-member board and two other executives above the regional presidents.

Smith, along with several other board members, did not return multiple calls for comment.

Atwater's campaign has tried to downplay his time at the bank. A detailed campaign brochure says Atwater had a "limited role" at Riverside. Atwater told the Tallahassee Democrat that he only led a sales team. And shortly after the bank was listed as one of Florida's weakest, a spokesman for Atwater called him a "marketing manager."

His title, according to financial disclosure forms, was executive vice president. Although his current campaign biography doesn't mention Riverside, an old biography described him as president of Riverside for Palm Beach and Broward counties.

Russakis confirmed that title, calling him one of a handful of "area presidents." He said Atwater had a "catch-all" position and managed everything south of Stuart, including selecting new branch sites and hiring employees.

Russakis called Atwater innovative and compassionate, and said he knows the art of compromise. He also said that when the bank began having problems, Atwater offered to help in any way he could.

He said it's very unfair to use the bank's failure to attack Atwater and that responsibility lies with the president and board of directors. "He was just working for the wrong bank at the wrong time."

Lee Logan can be reached at or (850) 224-7263.

Republican CFO candidate Atwater downplays role in failed bank 10/18/10 [Last modified: Monday, October 18, 2010 11:07pm]
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