Posted on Wednesday, December 1, 2010
The recovery enjoyed by most banks around the county in the third quarter, by and large, skipped Florida.
Much like Florida’s unemployment and foreclosure rates, which have been stubbornly slow to improve, many local banks have been unable to shake out of the recession. It appears that their struggles are linked to the continual problems faced by their borrowers.
Federal Deposit Insurance Corp. data shows that Florida-chartered banks lost a total of $92 million in the third quarter, with 61 percent of them in the red. That’s improved from a $289 million combined loss in the second quarter, but still trails the national trend.
The FDIC reported that all banks combined to earn $14.5 billion in the third quarter, and only 19 percent lost money.
Florida leads the nation in bank failures, with 28 shut down this year. That translates to a nearly 10 percent loss since the start of the year.
The FDIC said there were 860 banks on its “problem list,” up from 829 in the second quarter. However, the total assets of problem institutions declined to $379 billion from $403 billion, which shows that most of the problems are at community banks.
And in states such as Florida that can’t shake economic ills, local banks have it the worst. As of Sept. 30, there were 18 Florida banks considered “undercapitalized,” including the Bank of Miami, Plantation-based OptimumBank and Port Saint Lucie-based First Peoples Bank. However, the largest is Tampa-based Superior Bank, with $3.2 billion in assets. It is under a consent order from regulators.
The quality of banks’ assets nationwide poses another big difference. There was a decline in the amount of late or unpaid loans nationwide. That prompted FDIC Chairman Sheila Bair to say: “The industry continues making progress in recovering from the financial crisis. Credit performance has been improving, and we remain cautiously optimistic about the outlook.”
But Florida was another story. The ratio of noncurrent loans in the Sunshine State climbed to 8.37 percent – the highest on record. The amount of repossessed property climbed 8.7 percent during the third quarter to reach $2.1 billion at Florida banks.
On the revenue side, the combined net interest margin at Florida banks declined slightly to 3.5 percent. National banks had a 3.78 percent net interest margin – an improvement for them.
With so many problems, the local banks’ lending activity has been constrained. Total loans at Florida banks decreased by 1.2 percent during the third quarter, more than the national reduction of just 0.1 percent. In the past 12 months, Florida banks have reduced their total loans by 14.4 percent.
When banks lose money, it’s hard to make a lot of new loans because they have to be smaller to account for having less capital.
The most profitable Florida-chartered banks in the third quarter were:
• Miami Lakes-based BankUnited, with net income of $49.3 million.
• Jacksonville-based EverBank, with net income of $32.8 million.
• Miami-based Northern Trust, N.A., with net income of $29.4 million.
• The newly chartered, Miami-based NAFH National Bank, which earned $25.1 million after acquiring the assets of three failed banks.
• St. Petersburg-based Raymond James Bank, with net income of $16.6 million.
Florida banks with the deepest losses in the third quarter:
• Tampa-based Superior Bank, with a $101.9 million loss.
• Miami-based Ocean Bank, with a $32.1 million loss.
• Fort Lauderdale-based BankAtlantic, with a $17.9 million loss.
• Boca Raton-based First Southern Bank, with a $16.3 million loss.
• Orlando-based First Commercial Bank of Florida, which lost $15.8 million to completely exhaust its capital and fall under a serious regulatory order.South Florida Business Journal - by Brian Bandell