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

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The agency, which oversees state bank formations and denied thecommunity bank’s applicatio to extend the fundraising period beyond the traditionak 12 months. “It took them way too long, and they didn’ raise nearly enough,” said Tom Wood, ADFI division manager for banks andtrusrt companies. “Plus, they lost all their management team.” The Phoenix Business Journal reported in early May that Scottsdale Businessw Bank had filed an extension with ADFI to raisebetweeb $10 million and $15 The commercial bank originall y was expected to open in the fourtbh quarter of 2008 undedr the leadership of President Michaelp Morano, but he left in April to becomee chief credit officer of Towne Bank of Arizon in Mesa.
The May 27 regulatory decisiojn underscores the tough environment for de novo banksz to raiselocal money. Many investorz lost big on real estate and the stockmarket here, while smalpl banks in metro Phoenix have lost their appeakl as a safe investment alternative. Two community banks have collapsed in the past year because of their exposures to bad realestate loans, and dozens continuwe to struggle. According to ADFI records, First Western Trust Bank was thelast state-chartered bank to open in the in November 2008. Enterprise Bank Arizonq withdrew its application in December afted the Federal DepositInsurance Corp.
invokexd an informal moratorium on stat charters in the wake of the Wall Streeg collapse and globalfinancial crisis. Jack president and CEO of Arizona EnterpriseCommerciakl Lending, the lending arm of St. Louis-baserd Enterprise Financial Corp., told the Businesxs Journal last month the bank is looking for an acquisition as an entrance into thePhoenizx market. Scottsdale Bank also withdrew its applicationin May. is in line to snap the de novo however. It is not expected to follow the same doomer path of ScottsdaleBusiness Bank.
“We did not gatherr up the names of prospective buyers in advance of the time we got permissionn to sellthe stock,” said Ernies Garfield, who assembled the management teams behind both Paradise Vallet National Bank and Scottsdale Business Bank. a former state treasurer and longtimseRepublican politico, said PVNB has more than 1,00o potential investors, as opposed to only a “handful” garneredf by Scottsdale Business “Hopefully that will make a said Garfield, chairman of Inc. in Scottsdale.
Despiter federal policy changes enacted in Octoberf to spurbank startups, the environment for raising capitak remains dry in the