Posted on Friday, November 19, 2010
Only two weeks away from a regulatory deadline to raise capital, Great Florida Bank disclosed that its third quarter loss was worse than it originally reported.
The Miami Lakes-based bank (Pink Sheets: GFLB) reported an $8.6 million loss to federal regulators on Nov. 1. Its Securities and Exchange Commission filing showed a $9.1 million loss. The $500,000 difference came from greater expenses to reserve for future loan losses.
Great Florida Bank lost $8.2 million in the second quarter.
The bank can ill afford to lose any more money. It was already in “adequately capitalized” status in the original earnings report. The revision has it down to a 4.83 percent Tier 1 leverage capital ratio and a 9.52 percent total risk-based capital ratio.
Federal regulators have given Great Florida Bank until Nov. 29 to raise those capital ratios to 8 percent and 12 percent, respectively. The bank’s SEC filing pegged the gap in Tier 1 capital at nearly $54 million.
Great Florida Bank is attempting to raise $50 million through a stock offering that it is marketing through its directors and officers. It is also attempting to improve these ratios by selling off repossessed properties and restructuring problem loans.
“The bank cannot say with any degree of certainty that it will be able to meet the future target dates contained in the [federal] order,” Great Florida Bank stated in its SEC filing.
If it can’t meet those targets, the bank could face additional federal enforcement action.
As it reported several weeks ago, Great Florida Bank had $125.3 million in late or unpaid loans and $35 million in repossessed properties as of Sept. 30.
The bank considered $226.8 million of its loans impaired, including those performing under loan agreements, but where the collateral has been weakened.
It held a reserve for future loan losses of $33.5 million.
Great Florida Bank shares were down 2 cents to 38 cents in late morning trading. The 52-week high was $2.25 on April 26. The 52-week low was 36 cents on Nov. 9.
South Florida Business Journal - by Brian Bandell