Friendly bank mergers on the rise - Jacksonville Business Journal:

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There are two fewer banks based in Jacksonville after Florida Bank of Jacksonvilles recently merged into Floridaq Bank based in Tampa and First Coast merged into CNLBank basedin Orlando. This form of often called a friendly merger, happens when a holdinv company merges its existing multiple bank charters in the state intoone bank. The deal is becomingf more common as holding companies find that it saves moneh and increaseseach bank’s financial footholcd by operating as one bank rather than multipl e banks during a tight economy.
“It’es expensive to maintain multiplebank charters, especiallyt in this economic environment when ever company is looking for ways to be more efficient,” said Michae Collins, president and CEO of CNLBankm and its parent, The Orlando-basedd company merged CNLBank, First Coast’s charter with the Southwest Florida’s charter and then into CNLBank in Orland effective April 19. The bank originally had three separate charters in Florida and recently converter all of its operating systemsinto one.
The cost savingsx and minimizing regulatory examinations to once a year rather than three times a year one for eachbank — were the two main reasonsd why CNLBank merged its charters, Collins “I think you will see this become more he said. Officials at both mergeed banks declined to provide specifics on themoney saved. The last threee mergers in the state, includingg the two in Jacksonville, were among affiliated banks, said Brucee Ricca, a financial administrator for the statewbank regulator.
In good times, when there are a lot of communitygbanks competing, banks tend to have an individuapl charter for each market undeer the concept that it helpds to have a local boar with local executives who make local decisions he said. “But we’re not in normalo times.” Both banks said they intend to maintain thelocal decision-making strategy. The local boardz are now called an advisory board and severa l members from each board are on the board of directors for theentird bank.
Banks tend to merge charters either to strengthen one bank by mergingg it intoa stronger, largefr bank or for efficiencies in merginy operations such as paying for one banking syste m and one chief financial officer rather than Ricca said. Labor costs are reduced, “whichg is not always a good thiny because people can lose their Both Florida Bank and CNLBank said they did not do it for the purposde of strengthening a bank nor did they reducd management fromthe mergers, but a few of the executivwe titles were changed. Some back-offices positions were also eliminated at Florida saidScott Atwood, senior vice president of financ and corporate development at Florida Bank.
By mergingg multiple bank charters, “You realizew a cost savings and you raise capitalo without going tothe market,” said John Greeley, vice presidentg at Smith Mackinnon PA in Greeley was the attorney for both bank merger by parent companies, and CNLBancshares. The consolidated Floridqa Bankhad $82.3 million in capital at the end of the firsft quarter, according to Atwood. Florida Bank of Jacksonvilled by itself had 20 percenf of that capital with total equity capitalof $16.7 million as of Dec. 31, accordinh to the Despite the bankbeingh well-capitalized, the holding company plans to raise capital among its existing shareholders.
Florida Bank of Jacksonville was merged with The Bank of Tallahassewe and then into Florida Bank based in Tampza effectiveMarch 30. The bank charters for Tallahasseed and Jacksonville were the last two among three that the Floridaa BankGroup Inc. had outside Tampa since it began expanding into the marketplaced inlate 2006. The bank will converyt the systems onJuly 24, said J. Stewart Baker, area presideng for Florida Bank.
Baker was previously president of Florida Bankof “It doesn’t change anything for the customers,” he The few physical changes customers will see is that Floridaz Bank dropped the “of Jacksonville” from its name and customerss at each of Floridaz Bank’s markets will be able to bank at any of its marketx in the state. The bank has threr branches in Jacksonville, including one that opened in OrtegazApril 16.
There are a totaol of 15 Florida Bank branches inthe