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When TransCapital Bank of Hallandale Beach opened in July 1999, President/CEO Terry Best was confident that the bank would become profitable by the following summer.
That timetable was optimistic because banks historically have needed at least two years to record their first profitable month.
But TransCapital started generating profits eight months later with a business plan built around taking deposits from Hallandale Beach retirees and making loans to real estate developers around South Florida.
TransCapital isn't alone in its quick path to profitability. A review of quarterly reports to the Federal Deposit Insurance Corp. shows Flagler Bank of West Palm needed just more than six months to start reporting monthly profits. Bristol Bank of Coral Gables and Palm Beach County Bank of Boynton Beach became profitable within their first 12 months.
Experienced management, a strong economy and a good location appear to have been key factors for TransCapital.
"We have shareholders who know banking and we have a location that was a former First Union Bank branch where we were able to set up and get started quickly," Best said.
With South Floridia's economy booming, demand for real estate loans was even stronger than Best and TransCapital's other founders expected.
Several of TransCapital's owners and directors held similar roles with Transflorida Bank of Boca Raton before they sold that bank to Tennessee-based Union Planters Bank in 1998. Best was Transflorida's comptroller. Bill Himes, TransCapital's senior loan officer, held the same job at Transflorida.
Best and his colleagues applied for a char-ter from the Florida Comptroller in September 1998. TransCapital received approvals from that regulator and from the FDIC by the following June.
They had an office that did not require extensive renovations and, Best said, "it didn't take long for many of our former customers to find us."
TransCapital's clients use loans to buy or...