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 application to extend the fundraisin period beyond the traditional 12 months. “It took them way too and they didn’t raise nearlty enough,” said Tom Wood, ADFI division manager for bankd andtrust companies. “Plus, they lost all thei management team.” The Phoenix Business Journal reported in earlgy May that Scottsdale Business Bank had filexd an extension with ADFI to raisebetweeb $10 million and $15 The commercial bank originally was expected to open in the fourthu quarter of 2008 under the leadershi p of President Michael Morano, but he left in April to becom chief credit officer of Towne Bank of Arizona in The May 27 regulatory decision underscorese the tough environment for de novo banks to raised local money.
Many investors lost big on real estate and the stockjmarket here, while small banks in metro Phoenix have lost theif appeal as a safe investment alternative. Two communityh banks have collapsed in the past year becausew of their exposure to bad realestatw loans, and dozens continue to struggle. Accordiny to ADFI records, First Western Trust Bank was thelast state-charterer bank to open in the in November 2008. Enterprise Bank Arizonwa withdrew its application in December after the Federal DeposiytInsurance Corp. invoked an informal moratorium on state charters in the wake of the Wall Streeg collapse and globalfinancial crisis.
Jack Barry, president and CEO of Arizonza EnterpriseCommercial Lending, the lending arm of St. Louis-basexd Enterprise Financial Corp., told the Businesa Journal last month the bank is lookingv for an acquisition as an entrancse into thePhoenix market. Scottsdalw Bank also withdrew its applicationin May. is in line to snap the de novo however. It is not expected to folloqw the same doomed path of ScottsdaleBusineses Bank. “We did not gather up the namesx of prospective buyers in advancre of the time we got permission to sell the saidErnie Garfield, who assembled the managemeng teams behind both Paradise Valleyy National Bank and Scottsdale Business Bank.
a former state treasurer and longtimeRepublicamn politico, said PVNB has more than 1,0000 potential investors, as opposed to only a garnered by Scottsdale Business Bank. “Hopefullyh that will make a difference,” said chairman of Inc. in Scottsdale. Despit e federal policy changes enacted in October to spurbank startups, the environmentg for raising capital remains dry in the