1. Archive

Florida Banks plans stock sale, bank purchase

Published Sep. 13, 2005

Florida Banks Inc., a company created last year to form a statewide community banking system, has filed to sell a 71 percent stake in an initial public offering.

Upon completion of the IPO, Florida Banks will buy First National Bank of Tampa for $13.75-million. The company then plans to expand into the Jacksonville area "as soon as practicable," according to the registration filing with the Securities and Exchange Commission.

Jacksonville-based Florida Banks was founded in October by T. Stephen Johnson & Associates Inc. The financial services consulting firm hired Charles Hughes in January as president and chief executive.

As bigger banks have bought up smaller companies in Florida, there may be opportunity for a company that provides more personalized services, the filing said.

"Significant consolidation in the banking industry in Florida has disrupted customer relationships," the filing said. That has "created a need for higher quality services to small and medium-sized businesses."

Florida Banks plans to sell 4-million common shares in the offering for $10 to $12 each. After the IPO, the company will have 5.63-million shares outstanding.

Based on a midpoint price of $11 and the shares outstanding, the IPO gives the company an implied market value of about $62-million.

Florida Banks expects to raise about $40.5-million in the IPO after expenses, the filing said. About $12-million will be used to provide additional growth capital.

Another $606,000 will be used to redeem the company's Series A preferred stock. The rest will fund expansion "through branching and the acquisition of existing banks throughout the Florida market," the filing said.

After moving into Tampa and Jacksonville, Florida Banks plans to enter the Orlando, Fort Lauderdale and Palm Beach markets.

First National Bank of Tampa had $60.4-million in total assets as of Dec. 31, and reported net income last year of $376,000, down from $384,000 a year earlier.

The IPO and expansion strategy comes with risks. Florida Banks has no operating history and will basically buy the Tampa bank to become a company after going public. Also, consolidation in the Florida banking market has turned up the competitive heat.

John McMullen, CEO of First National Bank of Tampa, will be one of Florida Banks' largest single shareholders after the IPO, controlling a 4.3 percent stake. McMullen, 54, will be a Florida Bank director and president of the Tampa market after the IPO and acquisition.

Florida Banks has hired several other banking executives to help run the company. Its chief executive, Hughes, 54, was CEO of SouthTrust Bank of Florida NA before joining the company.

Hughes declined to comment on the IPO.

Florida Banks has applied to list its shares on the Nasdaq Stock Market under the symbol FLBK.