Acquisitive Premier American turns profit

Posted on Thursday, May 5, 2011

Amid a flurry of acquisitions that pushed it past $3 billion in assets, Premier American Bank flipped to a profit in the first quarter.
The Miami-based bank has acquired six failed Florida banks since it was formed in January 2010. The bank plans to be rebranded as Florida Community Bank, the name it uses in Southwest Florida, throughout the state.
Its latest deals were on Friday, when it got Winter Park-based First National Bank of Central Florida and Brooksville-based Cortez Community Bank. Premier American Bank CEO Daniel Healy said it now has 37 branches as it looks to expand its network throughout the state.
In addition to its 11 branches in South Florida, the bank has branches in Southwest Florida, the Daytona Beach area and now Central Florida. With plenty more capital, the bank plans to strike more deals, Healy said.
“We are building a commercial bank in Florida for the betterment of the economy and the people,” Healy said. “When this economy turns around, and it will, and real estate values firm, people will find tremendous opportunities in this state.”
It is changing the name to Florida Community Bank to emphasize that Florida is its only focus. The bank passed on potential acquisitions in Georgia and Alabama, he said.
In the latest two failed bank deals, Premier American Bank signed a loss-sharing deal for the Federal Deposit Insurance Corp. to take 80 percent of the losses from the acquired loan portfolios. The impact of those transactions will be seen in its second quarter report.
In the first quarter, Premier American Bank had net income of $5.8 million, improved from a $1.2 million loss in the fourth quarter. A big part of the difference was the income the bank gained from acquiring the failed Port Orange-based Sunshine State Community Bank at a $32.5 million discount to its assets.
The bank also reduced its operating expenses to $19.5 million in the first quarter, from $22.5 million in the first quarter. However, its net interest income declined to $11.5 million, from $14.8 million.
Premier American Bank cleaned up most of its loan portfolio, which has the benefit of a loss-sharing agreement with the Federal Deposit Insurance Corp. for five out of the six deals. The bank reported $2.5 million in noncurrent loans, or 0.4 percent of its total loans, on March 31, down from $137.6 million in noncurrent loans, or 26.3 percent, on Dec. 31.
Yet, the bank’s holdings of repossessed property grew to $33.8 million, from $25.4 million.
Healy summed up the huge drop in noncurrent loans in two words: “Hard work.”
While the failing banks didn’t have enough people working with troubled borrowers, Premier American Bank took over those loans and hired a collection team that has taken care of most of the problems, he said.
Premier American Bank was the seventh-largest bank chartered in South Florida with $2.46 billion in assets on Dec. 31. By March 31, it was up to $2.55 billion in assets.
The bank grew to $1.99 billion in deposits and $593 million in loans on March 31, from $1.9 billion in deposits and $522 million in loans at year-end.
Based on the first quarter reports of the two failed banks that were acquired on Friday: First National Bank of Central Florida had $342.1 million in assets and had completely exhausted its capital while Cortez Community Bank had $66.3 million in assets and was also out of capital.
South Florida Business Journal - by Brian Bandell

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