Another local bank sold? That's about as common these days as another terrorism warning, one more cable rerun of Law and Order, or the latest personal resolution to lose weight.
What's unusual this time is the sale of a Tampa bank run by a third-generation member of the founding Ferlita family. Central Bank of Tampa, whose main office sits on the northwest corner of W Kennedy Boulevard and Howard Avenue, has catered to the area's mostly blue-collar Hispanic community for the bulk of its 52 years. Most community banks around here seem to last closer to 52 minutes before they are sold for quick profits.
With Tony Ferlita now in charge, Central Bank could no longer resist that nagging urge to cash out. The buyer: a mid-size, out-of-state banking company that arrived with an open checkbook and a golly-gee wish to become a player in the tough Tampa Bay banking market.
The official deal, announced last month, calls for Central Bank to be acquired by the South Financial Group of Greenville, S.C., for the hefty price of $68-million.
The purchase is part of a one-two punch by South Financial to expand into the Tampa Bay market. The South Carolina company this year first bought St. Petersburg's Mercantile Bank, adopted the Mercantile name statewide in Florida, then pursued Central Bank in a plan to build a super-community bank. That's industry slang for a bank that's outgrown the little ol' neighborhood bank image, but still remains much too tiny to even be noticed by such giants as Bank of America or Wachovia.
Central Bank called itself the first bank in West Tampa when it opened at Howard Avenue and Main Street in 1946. The bank now has five Tampa branches, 61 employees and $215-million in assets _ a modest but respectable size for a community institution _ and ranks 11th in total deposits in Hillsborough County. It is the county's third-largest independent bank.
Salvador Ferlita was founder and chairman of Central Bank from 1946 to 1978. John X. Ferlita, later served many years as chairman of the board while also running the family beer distributorship. In 1995, Tony Ferlita (Salvador's grand nephew), who had worked as the bank's assistant cashier, head bookkeeper and, later, as chief financial officer, was named president. He is now also chief executive.
Central Bank's sale may seem sudden. But it was hardly a quick decision.
Ferlita and the bank's directors started getting antsy over the small bank's future two years ago. That's when the bank agreed to hire the investment banking and financial advisory firm Alex Sheshunoff & Co. with this instruction: Find us some potential buyers with deep pockets.
By November 2000, Sheshunoff had contacted 38 institutions with the clout and possible interest to buy Central Bank. After swearing them to secrecy, Sheshunoff picked the nine most promising institutions and sent them Central Bank's financial numbers.
In April 2002, Central Bank got its first nibble: a tentative purchase offer of about $45-million. Too cheap. After a second potential buyer emerged, the price tag spiked _ up to $66-million paid for in shares of the bidding bank. That richer sum caught Central Bank's attention. Serious talks began but, alas, the bidder's stock price declined. The buyer dropped out of the race for Central Bank on Aug. 1.
Now 0 for two, Central Bank pushed Sheshunoff to renew contact with an already interested South Financial Group (already wrapping up its deal to buy Mercantile Bank), plus others to try to freshen the bidding competition. South Financial said it might offer a stock deal for Central worth $65.8-million. Through early August, South Financial looked at Central Bank's books while Sheshunoff examined South Financial's strengths on behalf of client Central Bank.
Here's a short version of what happened next:
+ Aug. 21: South Financial said it might sweeten its offer to $68-million. Central Bank CEO Ferlita and his Sheshunoff advisers began more earnest talks with the South Carolina bidder.
+ Sept. 18: With a merger offer now in hand, Central Bank's board hashed out the pros and cons of the deal. Given the market for community banks, is this a strong offer? Are shares of South Financial a sturdy currency to consider a deal paid for in stock? After 52 years, can Central Bank grow much more on its own? Is our Tampa institution being left behind in the banking game?
The board asked many other questions. Do we need greater economic scale to spread our costs and compete? Does South Financial's management seem to know where it's going? Will this deal work for our customers, employees and the West Tampa community? Will Central Bank have some representation on Mercantile's board of directors?
And last but not least: Do we have a better alternative to this offer? In the board meeting, Sheshunoff advisers told Central Bank's directors that South Financial's offer is a fair one. The result: Ferlita and his board unanimously agree to sell Central Bank.
+ Oct. 2: Central Bank and the South Financial Group finalize the merger agreement and issue a news release announcing the deal the following day. (Bank regulators must still give final approval.) For its financial advice in a $68-million deal, Sheshunoff will be paid close to $850,000.
Here's a pot sweetener. At least two of Central Bank's executives, CEO Ferlita and senior loan officer Linda Hinze, have been offered one-year employment agreements with South Financial. And thanks to earlier employment deals they struck with Central Bank, Ferlita and Hinze are entitled to payments of about $815,000 and $535,000, respectively, as part of the bank's sale.
Central Bank of Tampa likes to boast that it was the first bank in Florida to offer drive-in banking. But it was one of the last to expand by branching.
Now it will have to operate in a faster lane. It's a pretty safe bet that it won't be long before this newspaper will be reporting the purchase of the South Financial Group by a larger banking company.
_ Robert Trigaux can be reached at trigauxsptimes.com or (727) 893-8405.