First Florida Integrity, Collier County's 'cookie bank,' could soon have new owners

The hometown "cookie bank" could soon have new owners from out of state. 

The Naples-based bank — known more formally as First Florida Integrity — would lose its name, but keep its cookies.

That's the promise of Scott Kavanaugh, CEO of Texas-based First Foundation Inc., the proposed buyer for the bank and its parent company — TGR Financial Inc.

"The answer is we are going to still be the 'cookie bank,'" he said.

In fact, First Florida Integrity's founders insisted on it, requiring it as part of the negotiations for a sale. 

The new owners plan to preserve more than just the cookies: They'll keep the bank's offices and employees, with the goal of building on the community bank's growth in Southwest Florida and other parts of the state.

"We are going to have a very high retention rate," Kavanaugh said.

The deal would bring new services to customers of First Integrity, namely wealth and trust management, while keeping and expanding the existing ones, such as commercial lending, which is big in Southwest Florida.

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First Florida Integrity is the only community bank headquartered in Collier County, so keeping that community feel is important to both sides of the transaction.

The board of directors for each company has already unanimously approved a definitive agreement to merge. 

The deal still requires approvals from shareholders of both companies — and before that a green light from regulators. If all goes as planned, the transaction is expected to close in the fourth quarter of this year, Kavanaugh said. 

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Terms of the deal

First Foundation, a publicly-traded company on Nasdaq, has offered an all-stock deal. The transaction is valued at about $295 million, or $15.23 per share. 

For each share of TGR stock, investors will get 0.6068 of a share in First Foundation. In total, TGR shareholders will own about 20.2% of the outstanding shares of the new owner's common stock after the merger.

TGR is also publicly-traded, but on the Over-the-Counter Bulletin Board, for smaller companies. Currently, it has a market cap of nearly $252 million. 

Initially, TGR shares were offered at $10, with a required minimum purchase of 250 shares. Most of the original investors were local residents.

The proposed transaction has triggered a handful of investor rights firms to announce investigations into the fairness of the process and price for TGR shareholders, encouraging them to reach out with questions and concerns.

Kavanaugh declined to comment about any potential investigations, or how they might impact a sale.

Longtime bankers Gary Tice and Garrett Richter founded First Florida Integrity, formerly known as First National Bank of the Gulf Coast, in 2009. They modeled the local bank after their original one, known as First National Bank of Florida, which had a small-town feel, and well you probably guessed it, cookies.

After the duo built their first bank into the largest commercial one headquartered in Florida, Fifth Third Bank gobbled it up in a $1.5 billion deal in January 2005.

The deal to sell their current bank and its parent company came together rather quickly after Kavanaugh said he called Tice to check up on First Florida Integrity's performance, as an interested investor.

That conversation led to one about a potential partnership, then a merger, he said.

"We've owned shares kind of in a roundabout way in TGR for five or six years," Kavanaugh said. "I've always stayed in touch with Gary."  

Tice, who serves as chairman and CEO of TGR, as well as chairman of its bank, sees the deal as beneficial all the way around.

"It's good for our shareholders, good for our customers and good for our employees," he said. "They are actually going to grow the company. That's really positive." 

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Staying put

First Foundation makes for an ideal partner, due to its financial strength, and profitable history, "with much of its growth still before it," Tice said.

After the merger, Tice has agreed to join First Foundation's board of directors.

Likewise, Richter, who serves as a president, CEO and director of First Integrity Bank, as well as president of TGR, will remain involved after the merger. He has agreed to stay on for at least two years as First Foundation's market president for Florida.

The local bank has about 155 employees, some of whom have worked with Richter and Tice for close to 30 years, at their combinedbanks. 

"I'm looking forward to being a part of the leadership for First Florida Foundation in Florida," Richter said. "I really like and respect the bankers for First Florida Foundation that I have met and they are a good bank." 

As for keeping the cookies flowing, he quipped: "Those cookies are a lot of dough." 

Tice and Richter have done a great job with First Integrity, with great metrics from strong deposits to solid-performing loans, Kavanaugh said.

"We have a very similar type of philosophy in the way we lend," he said. "So I think it's really a perfect match." 

Geographic growth

First Foundation recently moved its headquarters to Texas from California, as part of its growth strategy.

"Geographically, we felt a need, as we went through this COVID process, to diversify away from California, and into other very attractive markets," Kavanaugh said. 

The bank is looking to expand in Florida and Texas, both low-tax states that continue to see an influx of new residents and businesses from larger, more crowded and expensive states, such as California and New York.

The acquisition of First Integrity will give First Foundation seven locations in Florida, including Naples and Tampa. It will expand the bank's geographic presence into a fifth state and it's designed to solidify its regional presence from the west coast to the east coast. 

First Foundation also has locations in Hawaii and Nevada.

"In my mind, there couldn't be a better market than Naples, Florida, to expand our services, and so I'm really excited about this," Kavanaugh said.

First Florida Integrity, a Florida state-chartered bank, had $2.3 billion in total assets as of March 31.

The purchase of the bank would increase First Foundation's total bank assets to about $9.4 billion.

This would be the sixth acquisition for First Foundation. Most recently, it acquired Premier Business Bank in Los Angeles in December 2017.

The company currently has 500-plus employees in more than 20 locations, with $5 billion under active management. 

While the only community bank headquartered in Collier County would disappear with the sale of First Florida Integrity, Lee County still has three: Sanibel Captiva Community Bank, FineMark National Bank & Trust and Edison National Bank.