The demise of a Bradenton Bank carries the fingerprints of state Sen. Mike Bennett.
The veteran lawmaker, according to a Wall Street Journal report, obtained a $1.8 million loan from Flagship National Bank of Bradenton. The loan went "sour" and the community bank was eventually seized by federal regulators.
Steve Jonsson, Flagship National's president and chief executive, said Bennett's status as a member of the Senate Committee on Banking and Insurance gave the bank "comfort" at the time the loan was approved.
But when a planned development venture involving Bennett and a partner failed to materialize, loan repayments did, too.
"I don't think I'd ever lend money to a politician again if my life depended on it," Jonsson told the Journal.
Bennett did not return phone messages left by Sunshine State News at his offices in Bradenton and Tallahassee. He told the Journal he offered to buy back the loan, but those discussions ended when the bank failed.
Jonsson, also unavailable for comment Monday, acknowledged to the Journal that his bank's heavy involvement in real-estate loans put Flagship National in a precarious position.
It's a grim scenario that has played out across Florida over the past three years. Since 2007, more than 40 banks around the state have failed, many because of development loans gone bad.
The 10-year-old Flagship National, whose motto was "community banking at its best," was closed in October 2009 by the Office of the Comptroller of the Currency and its deposit accounts were transferred to First Federal Bank of Florida.
The Lake City-based bank entered into a loss-share agreement with the Federal Deposit Insurance Corp. on approximately $130 million of Flagship National's assets.
As of Aug. 31, 2009, Flagship National had total assets of $190 million and total deposits of approximately $175 million. But faced with a rising number of past-due loans and loans deemed irrecoverable, the bank was seized.
Keith C. Leibfried, chairman, CEO and president at First Federal Bank of Florida, told Sunshine State News he didn't know the status of Bennett's loan.
"I don't know. I'm inquiring," Leibfried said Monday.
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Contact Kenric Ward at kward@sunshinestatenews.com or at (772) 801-5341.
