South Florida banks show modest improvement in latest BauerFinancial report

Posted on Monday, July 4, 2011

Six banks declined and seven improved in BauerFinancial's quarterly rating of South Florida lenders. Coral Gables-based Bauer rates banks on a scale of zero (lowest rated) to five stars (highest rated).
Six banks declined and seven improved in BauerFinancial’s quarterly rating of South Florida lenders.

Coral Gables-based Bauer rates banks on a scale of zero (lowest rated) to five stars (highest rated). The ratings are based on an analysis of financial data the banks file with federal regulators.

Decliners in Bauer’s first-quarter report were West Palm Beach-based Flagler Bank, one star to zero; Hallandale Beach-based Home Federal Bank, one star to zero; Boca Raton-based Legacy Bank of Florida, one star to zero and Palm Beach-based Lydian Private Bank, two stars to zero. Also falling were Dania Beach-based Community Bank of Broward, two stars to one; and Miami-based International Finance Bank, three-and-a-half stars to three.

Doral-based U.S. Century Bank received zero stars on Monday for the second consecutive quarter. U.S. Century received one star the previous three quarters.

Miami-based Ocean Bank also received zero stars for the second straight quarter.

Other South Florida banks with zero-star ratings were Bank of Coral Gables, Eurobank of Boca Raton, First East Side Savings Bank of Tamarac, Great Florida Bank of Miami, OptimumBank of Plantation, Security Bank of Fort Lauderdale and TransCapital Bank of Miami.

The ratings do not necessarily reflect a bank’s ability to raise private capital, such as Ocean Bank, whose Venezuelan parent has deep pockets. The ratings also don’t address the “franchise value” of a bank, such as U.S. Century Bank, that has a strong network of branches, according to Miami-based bank analyst and economist Ken Thomas.

Still, “I’m concerned about zero- or one-star banks that have little prospects of getting new capital,” Thomas said. “There are too many banks in Florida chasing too few private capital dollars.”

The gainers included Coconut Grove-based Biscayne Bank, two stars to three; and Miami-based Plus International Bank, three-and-a-half stars to four. Also improving were Hallandale Beach-based Desjardins Bank, Pompano Beach-based Florida Shores Bank-Southeast, Davie-based Floridian Community Bank, Coral Gables-based Professional Bank and Miami-based Sabadell United Bank. All increased from three stars to three and a half.

Meanwhile, five-star ratings went to 1st United Bank of Boca Raton, Bank of Belle Glade, Broward Bank of Commerce, Intercontinental Bank and Palm Beach Community Bank.

The Dade County Federal Credit Union and the South Florida Educational Federal Credit Union of Miami Lakes also achieved five stars.

Statewide, 20.6 percent of Florida’s financial institutions received four- or five-star ratings (“recommended”), compared with 18 percent in the first quarter of 2010.
About 39 percent of the state’s banks received two or fewer stars, compared with 41 percent a year earlier.

Among national and regional banks operating in South Florida, TD Bank received five stars. JPMorgan Chase and PNC Bank each received three-and-a-half stars, and Bank of America, SunTrust and Wells Fargo got three stars.
Eric Kalis, Daily Business Review

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