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Business Observer Thursday, Aug. 20, 2009 13 years ago

The battle for capital continues for banks

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The quest for additional bank capital continues apace on the Gulf Coast, with TIB Financial the latest to announce plans to raise more money.

The quest for additional bank capital continues apace on the Gulf Coast, with TIB Financial the latest to announce plans to raise more money.

TIB, the publicly held bank-holding company based in Naples, filed a registration statement with the Securities and Exchange Commission Aug. 16 to sell 35 million shares of common stock, or about $60 million at current prices.

TIB is the parent of TIB Bank and the Bank of Venice, which have nearly $1.8 billion in combined assets. The bank has come under greater regulatory scrutiny lately, promoting the capital squeeze.

In addition to the filing, the bank recently disclosed it had agreed with regulators to raise additional capital as part of a “memorandum of understanding” executives signed last month. Such memoranda are usually not publicly disclosed and are considered the lightest on the scale of regulatory enforcement actions

And in February, federal regulators approved TIB's assumption of the deposits of failed Cape Coral-based lender Riverside Bank of the Gulf Coast totaling $317 million.

Some existing shareholders didn't greet the latest capital quest news very well, judging by the stock's movement. TIB's stock (symbol: TIBB) fell 9% on Aug. 17 to $1.71, the first business day following the filing. The bank had 14.7 million shares outstanding as of July 31, and its stock is thinly traded, which can lead to higher stock-price volatility when there's significant news or larger trades occur.

TIB received $37 million from the U.S. Treasury's capital purchase program at the end of 2008, better known as TARP. Earlier, in March 2008, the Barron Collier and Lutgert families of Naples invested $10.1 million in the bank.

Existing shareholders will likely be among the buyers, though the stock registration did not identify any pledges. Regulators have demanded the company raise the capital by the end of the year because of the deteriorating real estate market in the region.

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