Chase Gets Jump on Its Rivals by Buying Failed Florida Bank

American Banker, February 19, 1986 | Go to article overview

Chase Gets Jump on Its Rivals by Buying Failed Florida Bank


ST. PETERSBURG, Fla. -- Chase Manhattan Corp. has gotten the jump on its New York rivals and become the first money center giant to gain a full toehold in Florida.

That happened Tuesday when the holding company that operates the nation's third-largest bank opened for business with a temporary sign over the failed Park Bank of Florida in St. Petersburg.

Customers who walked into any one of the eight former offices of Park in Pinellas County dealt with the same tellers in familiar surroundings.

But they found themselves in Chase Bank of Florida, a newly formed Chase subsidiary.

While the former Park customers munched on pastries and quickly emptied carafes of orange juice, Chase officials beamed at the prospect of being able to offer full-service banking in one of the nation's hottest growth states.

But Chase paid a substantial premium, $62.6 million, to march into Florida.

Last Friday night, state and federal regulators shut down Park, the largest independent bank in Pinellas County. It was the largest bank failure in Florida history and the largest bank to fail this year.

Chase easily outbid Chemical Bank of New York, Barnett Banks of Florida, and NCNB Corp. of North Carolina for the right to enter the hotly contested Florida banking waters.

Industry analysts say the move could give Chase as much as a five-year lead over the rest of the nation's banking giants that are eager to enter Florida. Regional banking laws currently bar banks outside the Southeast from operating full-service banks in Florida.

However, because Park had more than $500 million in assets -- $593 million when it was taken over -- the Federal Deposit Insurance Corp. allowed banks outside the region to bid in order to gain the highest possible price and reduce its cost in closing Park.

Chase Bank of Florida will operate as a wholly owned subsidiary of Chase Manhattan Corp., officials said.

However, the new bank will not be permitted to expand outside of Pinellas County for 18 months. After that, Chase is free to cover the state, although it will have to acquire a bank in whatever county it wants to enter because of Florida branching laws.

One of the first areas of expansion will be Tampa, officials said.

"We are going head-to-head with the local competition," said Robert Douglass, a Chase vice chairman. "I guess, the local competition starts in North Carolina, then comes down here to the home-grown Florida banks."

Officials blamed Park's demise on risky real estate loans that went sour. The bank lost in excess of $45 million in 1985 and had a negative net worth when state and federal regulators stepped in to shut it down.

Mr. Douglass will serve as chairman of the Florida banking subsidiary, and will split his time between New York and St. Petersburg.

Webster Hull, a Chase vice president, will be acting president of the new bank. …

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