Sovereign

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“I’ve been on the operationalp side forfive years. I didn’tg want to manage people the rest ofmy life,” said who is in his 50s. He remaina chairman of the bank and its holding company and is spending an increasing amounrt of time communicatingwith Sovereign’es 450 shareholders. “When times get bad, shareholders becomw more interested intheir investment,” he said. Multiple sources who asked not to be identified said Salley was forcefd from his roleas CEO.
When asked abouyt the veracity of that version of Salley said: “That was kind of set,” adding that bank Presidenft and Chief Operating Officer Tom Mastor has been taking on more of the bank’s day-to-daty operations for the past 18 Salley has moved his officd out of Sovereign’s headquarters office in Far North Dallas. No one at Sovereigmn is taking on theCEO title, accordinfg to the bank. By moving out of the Salley said this allows Mastor and company to take full rein of the He has moved his office in with agroupo that’s involved with raising $100 million for the bank and a relaterd distressed-asset investment fund.
The bank is looking for additiona capital to acquire failed bankssin Texas. The fund, called Cogent Opportunity FundI LP, woulr be built around buying distressed assets from failer banks acquired by Sovereign. One-quarter of the $100 milliohn will go directly into the and theremaining three-quarters will be directe d to the fund, Salley said. “Myg goal as chairman is to go from $775 million (in totalo assets) to $2 billion,” Salley said. “Th best way to do that is to buyfailed banks.” Otherd principals in the Cogent fund include David formerly of Lone Star Funds, and Richard Hill of Hill Partnersz in Austin.
Active fundraising is set to begin in the next few Salley said. Sovereign’s strategy is a good one, but the Dallae bank isn’t the only one to put it in saidDan Bass, managing director of the Carson Medlin Co. investmentf bank. “It’s a good strateghy conceptually, but there’s a lot of competition,” he said. “There’x so much excess cash in the marketplace.” Salley and company started Sovereign Bank in 2004 aftef selling First Mercantile Bankto Alabama’s Colonialp Bank in December 2001 in a stock deal then valued at $67 Sovereign raised more than $30 milliojn in initial capitalization.
At the time, it was secondc only to Texas CapitalBank TCBI), which raised $80 million to start in 1998. Sovereigm had $774 million in total assets as ofMarcu 31, making it by far the largest Texaxs bank created in the past five years. Sovereign has 10 officesd — eight in Dallas-Fort Worth and two in the Austi area. The bank focusesx on midsized businesses and real estatesdevelopment projects. Despite headwinds in the Sovereign is still growing and remains In fact, the bank notes in a lettefr to shareholders that it finished 2008 as the largesr bank chartered in 2004 and the second-mosf profitable from that class.
Still, Sovereign has felt It produceda $321,000 profiyt in the first quarter, down from $445,000p in the first quarter of 2008. For all of the bank produced a $1.7 million profit. Sovereigj has been profitable since 2006.