Banks in Florida are tiptoeing toward a recovery with slightly better finances, bank rating service BauerFinancial says.
But, the situation is still treacherous for some. Florida Bank, a Tampa-based bank formerly known as Bank of St. Petersburg, has slipped into BauerFinancial's weakest financial rating.
BauerFinancial is a Coral Gables firm that gives banks and credit unions a score from five stars ("superior") to zero stars (its lowest rating) based on their financial health. It looks at the banks' profits and its levels of nonperforming assets, such as delinquent loans.
Things are looking up – a tad.
BauerFinancial graded 39.1 percent of Florida banks as "troubled or problematic" as of the March 31 bank reporting period. That's slightly better than the same quarter of last year, when 41 percent of banks were troubled or problematic.
However, the same old problem of repossessed properties keeps dogging Florida banks, said BauerFinancial President Karen Dorway. Only two states, Arizona and Georgia, have a greater percentage of banks with troubled or problematic ratings.
In the Tampa Bay area, six banks received BauerFinancial's lowest, zero-star rating: First Commercial Bank of Tampa Bay and Florida Bank, both of Tampa; Southshore Community Bank of Apollo Beach; Old Harbor Bank of Clearwater; First Home Bank of Seminole; and First Community Bank of America of Pinellas Park.
Florida Bank was the only bank that just received the lowest ranking this time; the other five have had the zero-star rating previously.
Florida Bank lost $7.96 million in the three months ended March 31. It also had a fairly high level of nonperforming assets – about 7.8 percent of its average tangible assets were nonperforming, BauerFinancial data show.
The Tribune was unable to reach an executive of Florida Bank on Monday.
Only one Tampa Bay area consumer bank was lucky enough to receive BauerFinancial's highest, five-star rating: Florida Traditions Bank of Dade City.
All the major out-of-state banks that operate in Florida received ratings of three stars (adequate) or better.
Among them were: Bank of America, Regions Bank, SunTrust and Wells Fargo, each of which received three stars; JPMorgan Chase, which got 3½ stars; CitiBank, which got four stars; and TD Bank, which received five stars.
Benjamin Bishop, an investment banker from Jacksonville who specializes in community banks, said many Florida banks are still propping up the value of the real estate loans on their books. Many bankers are "in denial" about the true value of the loans, he said.
He expects many small banks to merge with other small banks in the next few years to better help them compete and cover regulatory costs. A few years ago, Florida had around 350 community banks, and Bishop expects that to fall to around 200.
"Is the worst over? I think so, but it's only marginally better," he said.