R. Van Bogan, 64, is chairman-elect of the Florida Bankers Association and CEO of Florida Bank of Commerce in Orlando. Van Bogan, who assumes the chairmanship of the state bankers' group in June, spoke last week with Sentinel staff writer Richard Burnett.
CFB: As you prepare for your year as state chairman, what is your take on the state of Florida's banking industry?
There are a lot of banks that are really being challenged these days. I do think you'll see some more consolidations. I'm sure there'll be a few more failures, but I don't see it being massive. The key to banking in Florida is going to be capital: If you don't have capital, it will be a difficult year for you in 2010 — it will make or break a bank. But this is true in any growth state — take California, Nevada, even Georgia. We saw such rapid inflation in 2005-2007; we saw real estate prices easily doubling. Then prices came down as much as they went up.
CFB: What is your strategy for navigating this crisis?
We're looking to acquire. We're a well-capitalized bank, we're on the FDIC's list of banks that are able to acquire, and we will do that if we find the right bank. I don't want to spill our strategic plan, but we know where we want to go and what we want to do in the next 12 months. I think you'll find there are a lot of community banks who will also be helping clean up this ‘challenge.'
CFB: U.S. bank failures hit home recently with the failure of Orlando's Old Southern Bank. What's your advice to consumers who may be wondering about the condition of their bank?
The only complete rating on a bank comes from the FDIC, the Comptroller of the Currency or the Florida Office of Financial Regulation. But, of course, that's not available to customers. Bauer Financial or Bankrate.com are some outside sources people can look at; although they don't provide a full rating on a bank, it might show some smoke. You can also look up a bank on the FDIC's Web site. You can check out a bank's balance sheet, their available capital, for example. If a bank's total capital is 8 percent or higher, that bank is well capitalized. If it is down under 5 percent, well, that's a challenge. Just remember, the FDIC does insure all depositors within the $250,000 limit, though you may lose some interest on savings if the bank fails.
CFB: A lot of people complain about the federal bailout of banks. How do you address that?
First of all, the bailout of the banking system was the best investment the government has ever made. To date, they've made $50 billion on it, and all the big banks have already paid it back. Most banks didn't even want the bailout money in the first place. It was something put in there to protect the FDIC and the banking system. And it has worked.
CFB: To what extent does anger about the bailout trickle down to community banks?
Most community banks didn't get any TARP money. We couldn't have taken it, because it was too expensivet. As far as anger, I really don't feel that toward the community banks. Most of it is directed at the Wall Street banks, the investment bankers. They're the ones who got so much into derivatives, mortgage-backed securities and other risky areas. And they're the ones getting all those bonuses you hear about.
CFB: Do you see any signs of recovery out there?
Actually, yes, we are seeing businesses coming out of it, getting back to break even and making a little bit of money again. We're seeing the financials of small businesses who lost so much money in 2008 and 2009, [and] now they've turned things around. Once they do that, they start hiring people again. We're seeing that light at the end of the tunnel, but it will be a while yet before we get there.
Richard Burnett can be reached at email@example.com or 407-420-5256.