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

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The agency, which oversees state bank formationsand charters, deniedc the community bank’s application to extend the fundraisin period beyond the traditional 12 months. “It took them way too and they didn’t raise nearly enough,” said Tom ADFI division manager for banks andtrusf companies. “Plus, they lost all their management team.” The Phoenixd Business Journal reported in early May that Scottsdals Business Bank had filed an extension with ADFI to raissbetween $10 million and $15 The commercial bank originally was expected to open in the fourt h quarter of 2008 under the leadership of Presidengt Michael Morano, but he left in Apri to become chief credit officer of Townre Bank of Arizona in Mesa.
The May 27 regulatoruy decision underscores the tough environment for de novo bankxs to raiselocal money. Many investora lost big on real estate and the stoclmarket here, while small banks in metro Phoeni x have lost their appeal as a safe investmengt alternative. Two community banks have collapsed in the past year because of theirf exposure to bad real estate and dozens continueto struggle. According to ADFI First Western Trust Bank was thelast state-charteresd bank to open in the Valley, in November 2008. Enterprise Bank Arizona withdrew its application in Decembet after the Federal DepositInsurance Corp.
invoked an informalo moratorium on state charters in the wake of the Wall Streety collapse and global financial crisis. Jack Barry, presidenty and CEO of Arizona EnterpriseCommercial Lending, the lending arm of St. Louis-based Enterprise Financia l Corp., told the Business Journal last monthh the bank is looking for an acquisition as an entrancw into thePhoenix market. Scottsdale Bank also withdrew its applicationmin May. is in line to snap the de novo however. It is not expectedx to follow the same doomed path of Scottsdale Business Bank.
“We did not gather up the namesx of prospective buyers in advance of the time we got permissiohn to sellthe stock,” said Ernier Garfield, who assembled the management teams behinxd both Paradise Valley National Bank and Scottsdale Business Bank. Garfield, a former state treasurer and longtime Republican said PVNB has morethan 1,000 potential investors, as opposer to only a “handful” garnered by Scottsdale Businesz Bank. “Hopefully that will make a difference,” said chairman of Inc. in Scottsdale.
Despite federal policy changesa enacted in October to spur bank the environment for raising capital remains dry inthe