Billionaire financier Wilbur Ross says his purchase of a small Florida bank represents a beachhead that he hopes will grow much larger with additional acquisitions.
He agreed last month to purchase 68 percent of First Bank and Trust Co. of Indiantown for $7.6 million.
“It’s a very unique situation,” Ross, chief executive of WL Ross & Co., tells Moneynews.com in a wide-ranging and exclusive interview.
“Management had not gotten into subprime and hadn’t gotten into a lot of aggressive securitizations and leveraged loans like some of the bigger banks had. So it’s a clean bank.”
Second, Ross says, “it has a kind of a unique relationship with the nearby Seminole nation. … The Seminoles are a very prosperous community. You may be aware that they own Hard Rock casinos and a lot of other business activities.”
Next stop for the new, Ross-controlled entity — expansion.
Asked if his purchase is comparable to the way Bank of America grew from a regional bank into the largest U.S. bank today, Ross said, “Yes, that would be the hope.”
“We wanted a clean, safe starting place,” Ross says. “But there are many, many banks here in Florida, particularly on the East Coast of Florida, that are in a lot less fortunate circumstances.”
When the FDIC comes in to rescue such troubled institutions, “it likes to close the bank Friday after the close of business and re-open it Monday as something new,” Ross notes.
“You really need to be a bank to participate in that kind of an assisted transaction.”
Real-estate lending has pushed Florida banks over the edge, he says. That makes the state a good target for a healthy bank with strong backing to grow through acquisition.
“Oh, absolutely. So many of the banks here have terrible loan portfolios,” Ross said.
“Real estate lending is the main activity for all the Florida banks, as it’s not such a heavily industrialized state.”
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