PARK BANK VALENTINE’S DAY MASSACRE (#52):
Thirty five years ago, on Valentine’s Day 1986, Park Bank was closed by federal and state regulators in what was then the biggest bank failure in Florida history.
Park Bank of Florida was opened in 1977 by nine local businessmen. They planned to lend to local businesses, including real estate investors and developers larger banks might pass up.
Many local people bought stock in the bank, which went public in 1982. Four former Park Bank officers were requested to form a brokerage firm to sell Park Bank stock. My ex-wife was one. Park Bank grew from a mere $8-million in assets to $750-million in eight years. By 1984, Park Bank was Pinellas County’s largest independent bank.
But our faith in John E. Kearney and Richard O. Jacobs was misplaced. They may well not have been the brilliant, ethical businessmen that the community thought them to be. In late 1983, the Federal Deposit Insurance Corp. expressed concerns about the bank’s rapid growth and an abnormally high percentage of problem loans. Kearney and Jacobs pressed ahead with stock offerings.
The brokerage firm was pressured to lease bigger office space and to hire two more employees in order to prepare for another stock offering that never happened. I urged Linda to vote against that course of action, but she was out voted. It was explained to her that the brokerage firm had no choice except to do what they were told. Then came the Valentine’s Day Park bank shut down.
Stories emerged of borrowers being required by Bank Loan Officers to buy Park Bank stock as a condition of their loan. In fact, the size of the loan may well have been increased to cover the stock purchase. Linda had no idea of any of this and was absolutely devastated. We had bought stock, so had my parents, and our friends.
She was in tears. I was pissed. It wasn’t the first time, or the last, that I was fooled by seemingly trustworthy businessmen in the know. I could only shake my head and say, “I told you so!” I have told you before that I was a jerk. We were divorced 2 years later.
We would have been better off buying a green bench than trusting Kearney and Jacobs.
