For Old Florida National Bank, 2009 was a year of leadership succession, capital accumulation and branch growth. With the help of a few neighbors. And just for starters.

While many companies — OK, most companies — were stuck somewhere between neutral and reverse last year, Old Florida National Bank found open road. With the January arrival of three-decade banking veteran Randy Burden as chairman and CEO, the federally chartered, locally owned and managed independent bank changed its name from Orlando National Bank. Three months later, the bank had raised $50 million through a stock offering and increased deposits by another $50 million. Since April, Old Florida National Bank (www.oldfnb.com), founded in 1982, has grown from two to seven locations across metro Orlando. Also, in October, John Burden, 33, the son of Randy Burden, was named president. Previously executive vice president, senior lender, he replaced veteran John Christman, who became chief operating officer.

Not exactly a year of idling.

Just before the eventful year came to a close, FM sat down with father and son. Focused on achievements, challenges and plans, they peeked in the rearview mirror as well as peered ahead.

Fund raising. At a time when money was tight, seemingly regardless of industry sector, you were able to raise pretty big dollars. How?

Randy Burden: “We knew we needed to raise a significant amount of capital because the market dictates today that you have a generous amount of capital to prepare for all circumstances. And the kind of bank we wanted to build was not your normal community bank. We’re interested in building a bigger-than-normal community bank. … The plan was to talk to as many people as we could who have been former shareholders of ours and directors [at previous banks I’ve been involved in]. We had a cocktail party at the University Club [in Winter Park]. We didn’t send out any invitations; it was world of mouth. We ended up with 470-something people at the reception, and some people couldn’t get in [because of capacity]. Most of those 470 people have ended up being shareholders. To date, we’ve raised $57 million in total capital. … [Since May], we have grown from just over $100 million to about $350 million [including $280 million in deposits] in total assets.”

John Burden: “It came from the community. There were a lot of former shareholders, but there’s also a ton of new shareholders. That’s probably the difference in this bank. … It was a community-supported deal.”

Which was most challenging, and why — raising money, building deposits or expanding physically?

JB: “Raising money. Banks aren’t looked upon very favorably in the marketplace. So, even though we have what we think is a great plan, and we know we have some great folks who work here, you still have ‘raising money for a bank.’”

RB: “Every day banks are closing. There’s doubt about what’s going on in the economy. It was quite a task. But we’re very pleased with the results.”

Randy, in the past, you’ve been quoted as saying, “This is a good time to build a bank.” The timing seems odd, given the poor economy. Why is now a good time?

RB: “Because capital is such a rare commodity today, and liquidity is king in the banks, the banks that can’t raise capital have liquidity problems. They have to shrink in order to increase their capital size and hold on to their liquidity. It’s a matter of survival more than anything else. … The opportunity is there because we have the capital and we have the liquidity, so we can accommodate loans for good local customers. We’re getting to look at people [customers for loans] we’ve never had a chance to look at before. That’s why I think it’s a good time to build a bank.”

JB: “There are other market opportunities on top of that. There are great people [bankers] available to us. We’ve taken more people than we normally do because these are people we want to build a bank. They were available. We didn’t want to lose them, so we took them.”

In this environment, what are you looking for from potential borrowers?

JB: “We’re looking for operating companies — businesses that manufacture, warehouse, provide goods and services. We’re looking to give them operating lines of credit. If they’re going to own instead of rent, we’ll finance their building for them. We’re also looking to bank the community from a retail standpoint, as well.”

RB: “The biggest advantage, I’d say, is that most of our lending relationships over our careers have been more structured toward the commercial and industrial sectors versus the real estate sector. Everybody has done real estate in Florida, and we’ve done real estate, but we had the fortunate capability of understanding cash flow lending on operating companies.”

Is this a true statement: For savvy businesses, in general, when the economy is poor, opportunities are good?

RB: “Everybody always says that. And the opportunity is there. The opportunity is there if you can adjust your operations to the economy. What most people are saying is that the values today are the lowest they’ve been in years, so you should take advantage of that. But the only way you can take advantage of that is if you’ve got the cash or if you’ve got the ability to borrow. Most of the borrowers that we’re looking at have put themselves in that kind of position [with cash or able to borrow]. Or, they’ve adjusted their operation to the economic times. … If you’re capital intensive and the market turns down as fast as this one did, it’s very difficult to adjust in a short period of time to your new operating revenues. They can do it over a period to time, if they have time to do it. But most of [those who] have been successful are able to adjust fast. It is amazing how many people do have cash out there. People are just not employing it; they’re waiting to see what’s going to happen.”

Randy, you reassembled a group of bankers who have worked with you at other institutions over the past 20 years. Has that been the key to growth – that experience?

RB: “Our situation represents the best of the old and the best of the new. My son represents the new. I think we’ve assembled the best young group of bankers, and he’s been largely responsible for that. And we’ve got some of the most experienced older people on the other side, including my team. We don’t have the energy level they [the younger bankers] do; they’re working nonstop and asking for more. They’ve really energized the process. That’s a very big plus, and they’ve made a huge difference.”

John, with the transition to president, what are your priorities?

JB: [2009] was a year of transition — raising the money, getting the people. [This] year is to make money. … The whole goal [now] is to increase profitability. … We also want to keep the positive momentum going. We built the foundation. Now, we want to build the house.”

John, what do you bring to the table?

JB: “What I bring is a lot of energy and enthusiasm. I’m a hard worker. … I think the biggest thing about all of these guys, who are younger than what you would normally see at a bank, is that we’re all real passionate about banking.”

In general, with succession planning at any company, particularly with “family” businesses, there are pitfalls. How have you been able to overcome those hurdles?

JB: “Because we’re such a close family, when we come to work, it’s work. We’re here to do a job; it’s what we do. We work very closely together, obviously. But it’s not an issue.”

RB: “The one thing we both feel very strongly about is that when you invest in [our] bank, it’s our obligation to do the best we can to make sure we get the best return for you. Every person in this bank is more interested in shareholder value than they are a job. We want to drive shareholder value up. That’s what we work on every day. That’s what he does, and that’s what I do. We may disagree on certain approaches. But we know where we want to go. … What good bankers do is help build a community. That’s what we’re interested in doing.”

Such a leadership transition at any company, in general, isn’t easy — correct?

RB: “When you sit down and talk about the plan, you have to get all the people involved. In our particular instance, John Christman was involved in our decision on what to do. … You get the buy-in of everybody involved, including the past president. Make him understand his role and function in what you’re trying to do. … It’s not an easy thing to do, but you have to understand where you want to go, how you’re planning on getting there and who is the best person to drive that train.”

What would have to happen in 2010 to make the year a success?

RB: “Success would be continued modest growth, no more surprises on the loan side, an economy that gradually improves, seeing our customer[EWP1] s get more stable and a general attitude about the economy that’s positive versus the negative one that’s out there today. … I want every bank to be successful, and I want every customer to be successful.”

JB: “I want people to start making some money.”

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