Failure to raise capital kills formation of Scottsdale Business Bank - Phoenix Business Journal:

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The agency, which oversees state bank formationsand charters, denied the community bank’s application to extend the fundraising period beyondc the traditional 12 months. “It took them way too and they didn’t raise nearly enough,” said Tom ADFI division manager for banks andtrust “Plus, they lost all their management team.” The Phoenixd Business Journal reported in early May that Scottsdale Businessa Bank had filed an extension with ADFI to rais e between $10 million and $15 million.
The commercialo bank originally was expected to open in the fourthy quarter of 2008 under the leadershilp of PresidentMichael Morano, but he left in April to become chier credit officer of Towner Bank of Arizona in Mesa. The May 27 regulatoryh decision underscores the tough environment for de novo bank s to raiselocal money. Many investors lost big on real estate and the stocomarket here, while small banks in metroo Phoenix have lost their appeapl as a safe investment alternative. Two community banks have collapsesd in the past year because of theire exposure to bad realestate loans, and dozens continue to struggle.
According to ADFI First Western Trust Bank was thelast state-chartered bank to open in the in November 2008. Enterprise Bank Arizona withdrew its applicatiobn in December after the Federak DepositInsurance Corp. invoked an informal moratorium on statde charters in the wake of the Wall Streey collapse and globalfinancial crisis. Jack Barry, presiden and CEO of Arizona EnterpriseCommerciak Lending, the lending arm of St. Louis-based Enterprisr Financial Corp., told the Business Journal last mont h the bank is lookinf for an acquisition as an entrance into thePhoenix market. Scottsdals Bank also withdrew its applicationin May. is in line to snap the de novo however.
It is not expected to folloqw the same doomed path of ScottsdaleBusinese Bank. “We did not gather up the namees of prospective buyers in advance of the time we got permissiohn to sellthe stock,” said Ernie Garfield, who assembledd the management teams behind both Paradisse Valley National Bank and Scottsdale Businesxs Bank. Garfield, a former state treasurer and longtimeRepublican politico, said PVNB has more than 1,000o potential investors, as opposed to only a garnered by Scottsdale Business Bank. “Hopefullh that will make a said Garfield, chairman of Inc.
in Despite federal policy changews enacted in October to spur bank the environment for raising capital remains dry inthe desert.