Hot Florida Market Prompts Bay Financial to Test Waters
By Laura Thompson Osuri
Tuesday, August 24, 2004


Perhaps encouraged by the prices Florida banks are fetching these days, Bay Financial Savings Bank in Tampa has put itself up for sale.

The thrift is running advertisements announcing that its majority owner is looking for a buyer. Though Bay Financial is not named in the ad, the details listed - a federal thrift with $120 million of assets and $20 million of capital (Tampa's only other thrift, Members Trust Co., has assets of just $18.2 million) - leave no doubt about the identity of the bank for sale.

Additionally, the contact number given is that of Ronald Young, Bay Financial's president and chief executive.

The ad first appeared in American Banker on Friday and is running through Thursday.

Kenneth Thomas
, a Miami bank consultant and the founder of, said it is unusual for a bank to take out an ad announcing that it is for sale. He equated it to a "for sale by owner" sign in a hot residential real estate market.

Whether Bay Financial is using an investment bank is unclear, but Mr. Thomas said the company would probably not place have placed the ad if it were. "In a market like Florida there is such a demand for a banking franchise, they probably think they can go at it on their own."

Many regional banks in the East want to get a big piece of the Florida market; of the 13 bank deals announced there this year, eight involve out-of-state buyers.

But with so much demand, target banks are getting scarcer and deals are getting pricier. Case in point: On Aug. 2, Fifth Third Bancshares of Cincinnati said it was buying the $4.1 billion-asset First National Bankshares of Florida Inc. for $1.6 billion - 3.26 times book value and well above this year's average of 2.10 times book.

All the activity may make it look easy to sell a bank in the Sunshine State, but Mr. Thomas said the job is best left to professionals, who will are likely to get a better price.

But Bay Financial may be doing nothing more than gauging interest with its ad, he said. "They might be testing the waters, but when it comes down to it they will hire an investment bank."

Shoppers could find the one-branch thrift attractive. It has nearly twice as much capital as other thrifts with assets of $100 million to $300 million, according to the Federal Deposit Insurance Corp.

But credit quality problems might scare some away. At the end of the first quarter Bay Financial's noncurrent loans equaled 3.89% of total loans - well above its peer group average of 0.68%.  


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