Progress Bank of Florida was in trouble much earlier than other community lenders.
Originally known as Bay Financial Savings Bank, it specialized in making subprime loans to borrowers with poor credit, and it started seeing those loans go bad long before other banks around the country.
To solve its problems, Progress simply stopped making loans in June 2004. It had $112 million on its books at that time. But within three years, that figure dropped almost 70 percent to $36 million.
It was only after a group of Virginia investors bailed out the bank in April 2007 that Progress began lending again.
Led by Thomas R. Rummel Jr., the bank changed its name and gave up its national thrift charter to become a
state-regulated community bank.
Progress also switched from making mostly residential loans to financing commercial development — at a time when the real estate bubble was already deflating quickly.
Regulators said Progress spent heavily on new technology to modernize its operations and to refurbish its Tampa headquarters. Salaries and wages jumped $560,000 from December 2007 to December 2009, while spending on overhead increased more than $530,000.
At the same time, the bank increased its total loans to more than $100 million again. But given the sluggish economy, defaults quickly grew.
Bad loans rose from less than $1 million in December 2007 to more than $17 million by December 2009.
The losses cut into the bank's capital cushion, and regulators moved to shut it down in October 2010 — a little more than three years after the Virginia investors took charge.