On Monday, it was business as usual at the former Orion Bank — now IberiaBank.
With the morning chill hanging in the air, employees slowly streamed into IberiaBank off Goodlette-Frank Road before 9 a.m. A white plastic sign covered the bank’s old Orion logo.
On Friday, Nov. 13, federal regulators shut down Naples-based Orion Bank. The Florida Office of Financial Regulation appointed the Federal Deposit Insurance Corporation as receiver and the FDIC entered into an agreement with Lafayette, La.-based IberiaBank to assume all of Orion’s deposits and $2.4 billion of its assets.
In spite of the takeover of the Naples institution, there were no customers waiting to rush into its former headquarters when the new bank opened in its place at 9 a.m. on Monday.
FDIC regional ombudsman Linda Beavers attributed the lack of panic to the continuous stream of information released through the media over the weekend that let customers know their money was safe because the bank was FDIC insured.
Over the weekend, IberiaBank sent dozens of employees to Florida to help with the transition at every bank office. The goal was to do everything in an “exceptional fashion,” said Daryl Byrd, IberiaBank’s president and CEO.
He said most of Orion’s employees will stay on with IberiaBank. Orion — which was one of the largest community banks in Southwest Florida — had about 260 employees.
“I can’t promise everybody a job,” Byrd said. “But the vast majority of the people will work for us.”
He said the bank is planning to add more jobs over the next year as it expands in Florida. Top management is still being evaluated.
IberiaBank is well capitalized. “About 70 percent of our company is owned by institutions,” Byrd said.
“We would love to see other investors in your market buy our stock as well,” he said.
Ken Thomas, a Miami-based independent bank consultant and economist, said he knew Orion was on a road to disaster. Orion’s latest financial report shows year-to-date net losses through Sept. 30 were $84 million.
“I saw it coming,” Thomas said. “The FDIC has finally gotten around to Florida to close up some of our problem banks.”
He expects more banks to fail this year in Florida and estimates there are 500 problem banks in the country. About 15 percent of them are in Georgia and 10 percent are in Florida, Thomas said.
With the closing of Orion, there is some good news, as no depositors lost money and it has been taken over by a much stronger bank.
“Now we have a new competitor,” Thomas said. “It could have been a lot worse.”
Orion’s private shareholders are out of luck. They’ve lost everything.
“It’s sad when it’s local people that you know. I felt bad for them, but I knew it was coming,” said Tarik Ayasun, who had business and personal accounts with Orion at its Marco Island branch.
According to a story in “Gulfshore Business” magazine in 2006, Dave Wannstedt, a former coach of the Miami Dolphins and head football coach at the University of Pittsburgh, was one of Orion’s 300 or so minority shareholders.
Wannstedt, who has been good friends with Jerry Williams, Orion’s former president, CEO and chairman, could not be reached for comment Monday.
On Monday, banking and other community leaders were still saddened by the loss of Orion, which at one time ranked as one of the top financial performers in the country.
“The bank has really been a very good chamber supporter and a community citizen,” said Mike Reagen, president and CEO of the Greater Naples Chamber of Commerce.
“Frankly,” he said, “I think these are scary times. I hate to say that, but it’s true.”
In an order dated Nov. 9 and released Friday, the Federal Reserve Board called for the immediate dismissal of Williams from the bank and its board.
In the order, federal regulators described Orion as “critically undercapitalized.” They claimed the bank loaned about $60 million in June to straw borrowers who used $15 million to buy stock in the bank’s parent company. A straw borrower commonly refers to an individual whose credit history, name and Social Security number are used to hide the identity of the organizers of a for-profit mortgage fraud scheme.
The stock purchases came at a time when the bank had been ordered to raise additional capital.
When the bank made the loans back in June it had already reached its legal lending limit, according to the order. Regulators say the loans were written “in an unsafe and unsound” way and Williams gave false statements about the capital raised from the stock purchase, telling them it was done “without financing” provided by the bank.
As a result of those false statements, the Federal Reserve Bank says Orion suffered additional loan losses and violated a written regulatory agreement designed to address its financial problems.
The bank has been the subject of several enforcement actions. The latest, a cease-and-desist order, called for Orion to increase its capital by no later than Nov. 20, and restricted its ability to pay dividends or offer above-market interest rates.
Williams could not be reached for comment. A spokeswoman for the Federal Reserve Bank said it’s policy not to comment on orders of this kind.
Some have come to the defense of Williams, who has been a well-respected banker and community leader. He was named community banker of the year by American Banker, a trade journal, in 2006.
Skip Quillen, owner of Culinary Concepts, which has five restaurants in Southwest Florida, said Williams was were there for him when he needed a loan.
“Unfortunately bad things happen to good people,” he said. “I don’t have a bad word to say about him. He’s a great guy.”
He’s still upset about the closing.
“I think it hit the whole town hard,” Quillen said. “The whole situation is just a mess.”
He said he hasn’t tried to call Williams, figuring he has enough to deal with. He considers him a friend.
Others are more critical of Williams. Some question whether criminal charges will be brought against him because of the allegations made by bank regulators.
Kristi Lester, a spokeswoman for the Collier County Sheriff’s Office, said her office is not investigating Orion or Williams.
The Florida Office of Financial Regulation has the authority to investigate and take legal action when violations of state law are suspected. But it does not discuss possible regulatory actions against banks, said spokeswoman Holly Hinson.
Customer reactions were mixed Monday when Orion reopened as IberiaBank.
“I kind of heard about what was going on,” said North Naples resident Jerry Griffin, 24, while walking back to his car from the bank.
“I’m not sure who IberiaBank is. I haven’t had any issues as far as the transition so far.”
He was confident his money was safe.
North Naples resident Dora Sharpe, 47, said she learned of the bank switch in the newspaper. It came as a surprise.
Also surprising, Sharpe said, was how quick all the Orion signs became IberiaBank signs.
“How did they change signs so fast?” she asked with a chuckle.
In a more serious tone, Sharpe said she’d never had any trouble with Orion before and her money was safe.
She got her first test of the relationship with her new bank when she used her old ATM card on Saturday,
“That was a big test for us, because when you need money you need money,” Sharpe said.
Orion’s failure marked the 122nd FDIC-insured institution to close this year. Ten other Florida banks closed in 2009, including Sarasota-based Century Bank, which also failed Friday.
Orion operated 23 branches from Bradenton to Key West. Shortly after the close of business at 6 p.m. Friday, signs were posted on branch office doors announcing the federal action.
Staff reporter Kelly Farrell contributed to this story.
ed for Orion to increase its capital by no later than Nov. 20, and restricted its ability to pay dividends or offer above-market interest rates.