Investors Buy First National Bank of Scottsdale

Tue, 03/22/2011 - 09:41 -- Jeff

An investor team led by veteran Valley banker Rich Vogel and local entrepreneur Randy Stolworthy has purchased First National Bank of Scottsdale after receiving approval from regulators, the group announced.

Terms of the transaction, which closed Friday, were not disclosed.

The investor group raised more than $20 million for the bank.
"This strong capitalization will enable us to make loans and ensure the safety of our depositors," said Vogel, who becomes chairman and chief executive officer. He has more than 20 years of executive-management experience in the Valley, including nine years at Compass Bank, where he served as president of the Phoenix operation.

Stolworthy is an experienced real-estate investor with expertise in investing in and lending to middle-market companies.

First National Bank of Scottsdale has one office, in Scottsdale, and most members of the team will stay on, Vogel said.

The bank was owned by First Olathe Bancshares of Kansas.

"Our mission is to grow and develop the premier locally owned and managed community bank in Arizona that is well-capitalized," Vogel said, citing the current lending void for small and mid-sized businesses.

He noted that most local community banks are operating with distressed balance sheets and underperforming loans.

"Our bank has no underperforming loans with a starting balance sheet that has significant capital reserves," he said. "We can be extremely focused, while our competition has to deal with internal loan problems as well as capital issues."

A tough operating environment has made it difficult to gain approval for new banks and raise capital, Vogel said.

Earlier this year, the U.S. Office of the Comptroller of the Currency ordered First National Bank of Scottsdale to boost its capital and make other changes. At midyear, First National Bank of Scottsdale ranked as one of the smallest banks operating in Arizona, with $42.8 million in deposits.

With the capital injection from the investor group, Vogel said the bank now has a high capital position, with a generally good portfolio of loans.

Vogel said the bank's directors include banking executives Stolworthy and Harold Mosanko; Christian Roe, chief financial officer at Discount Tire Co.; Lee McPheters, professor of economics at the W.P. Carey School of Business at Arizona State University; and Larry Seay, executive vice president and chief financial officer at Meritage Homes.

Vogel said the company also could be interested in acquiring other banks.