Posted on Wednesday, November 17, 2010
Gibraltar Private Bank & Trust’s losses more than tripled in the third quarter as it paid the price for reducing its amount of problem loans.
Federal regulators issued a cease and desist order against the Coral Gables-based bank in October for having an excessive level of problem assets and inadequate anti-money laundering compliance programs. The bank has added staff to deal with those issues.
Gibraltar reported a $2.6 million loss in the third quarter, deeper than its $805,000 loss in the second quarter. Although its net interest income increased to $15.8 million from $13.3 million, which was offset by expenses from problem loans as it cleared them off its books.
The bank took an $8.6 million reserve for loan losses in the third quarter, up from $2.6 million. Its bad loan charge-offs increased to $8.8 million from $3.6 million.
Those expenses, in addition to loan restructuring, succeeded in making its loan portfolio look better. Gibraltar reported $63.6 million in late or unpaid loans, representing 4.62 percent of its total loans, as of Sept. 30. That’s down from $88.3 million in noncurrent loans, or 6.26 percent, as of June 30. Its repossessed property increased to $16.9 million from $12.6 million in that same time period.
The bank’s $35.7 million reserve for future loan losses covered 56 percent of its noncurrent loans as of Sept. 30. That compares favorably to most South Florida banks and is an improvement from where its reserve coverage ratio stood in the second quarter.
“We made significant progress in the third quarter, both in reducing non-performing assets and in improving core operating income," Gibraltar CEO Steven Hayworth said in a statement released by the bank. "Both of these are key drivers in our long-term performance. Gibraltar Private remains a financially strong institution with very strong capital ratios that are among some of the highest in Florida.”
As of June 30, Gibraltar was the 13th-largest bank chartered in South Florida, with $1.59 billion in assets. By Sept. 30, it was up to $1.69 billion in assets. However, the regulatory order placed limits on the bank’s asset growth in future quarters.
The bank’s deposits increased to $1.33 billion as of Sept. 30 from $1.28 billion in the previous quarter. Its loans slipped to $1.35 billion from $1.38 billion.
Gibraltar’s wealth management division oversaw $688 million in assets at the end of the third quarter.
South Florida Business Journal - by Brian Bandell