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

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The agency, which oversees state bank formations and denied thecommunity bank’s application to exten the fundraising period beyonf the traditional 12 “It took them way too long, and they didn’t raisre nearly enough,” said Tom Wood, ADFI division manager for bankas and trust companies. “Plus, they lost all their managementy team.” The Phoenix Business Journal reported in early May that Scottsdal e Business Bank had filed an extensioh with ADFI to raisebetween $10 million and $15 The commercial bank originally was expected to open in the fourthu quarter of 2008 under the leadership of Presidengt Michael Morano, but he left in Aprilk to become chief credit officer of Townwe Bank of Arizona in Mesa.
The May 27 regulatory decision underscores the tough environment for de novo bankss to raiselocal money. Many investors lost big on real estatde and the stockmarket here, while small banks in metro Phoenix have lost their appeal as a safe investment alternative. Two communit y banks have collapsed in the past year because of their exposure to bad real estate and dozens continueto struggle. According to ADFI records, Firsf Western Trust Bank was thelast state-charterex bank to open in the Valley, in November 2008. Enterprise Bank Arizons withdrew its application in December after the Federa l DepositInsurance Corp.
invoked an informa l moratorium on state charters in the wake of the Wall Stree t collapse and globalfinancial crisis. Jack president and CEO of Arizona EnterpriseCommerciak Lending, the lending arm of St. Louis-basee Enterprise Financial Corp., told the Business Journaol last month the bank is lookinvg for an acquisition as an entrance into thePhoenix market. Scottsdale Bank also withdrew its applicationnin May. is in line to snap the de novo however. It is not expected to follow the same doomef path of ScottsdaleBusinessx Bank.
“We did not gather up the namee of prospective buyers in advancs of the time we got permission to sell the saidErnie Garfield, who assembled the management teames behind both Paradise Valley National Bank and Scottsdal e Business Bank. Garfield, a former state treasurer and longtimeRepublicann politico, said PVNB has more than 1,00p potential investors, as opposed to only a garnered by Scottsdale Business Bank. “Hopefully that will make a said Garfield, chairman of Inc.
in Despite federal policy changes enacted in October to spur bank the environment for raisinb capital remains dry inthe