Florida banks' health improves slightly

Florida's banks saw a tiny improvement in their financial health last quarter, but they're still suffering greatly from the real estate bust, a bank rating firm said Wednesday.

BauerFinancial of Coral Gables rates banks and credit unions on their levels of capital, profit and "nonperforming assets," which refers to delinquent loans and repossessed properties. It gives them a star rating based on their financial health, from five stars (superior) to BauerFinancial's lowest zero-star rating.

Karen Dorway, an executive and analyst at the rating firm, sees some positive signs lately.

As of June 30, the most recent reporting period, 39 percent of Florida-based banks were rated two stars or less. Two stars is a "problematic" rating, according to its rating system. That's a high number of problematic banks historically, but it's actually a slight improvement.

During the period ended March, 41 percent of Florida-based banks were rated problematic or worse.

"It's still a difficult environment for Florida banking, but better than the first quarter," Dorway said. "So, I think we are starting to see some stabilization."

In the Tampa Bay area, 25 locally-based banks were rated "adequate" or better, while 13 were rated problematic or worse. Six banks received the lowest zero-star rating: First Commercial Bank of Tampa Bay, Progress Bank of Florida, Southern Commerce Bank and Superior Bank, all of Tampa; Old Harbor Bank of Clearwater; and SouthShore Community Bank of Apollo Beach.

Most of those banks have had the lowest rating for several months. Only Superior Bank slipped to zero stars recently, because its parent company lost roughly $50 million in the most recent quarter and BauerFinancial downgraded its capital levels, Dorway said. An executive with Superior Bank could not be reached for comment Wednesday.

Several of the largest out-of-state banks operating in the Bay area are rated three stars, or "adequate." These include SunTrust, Bank of America and Regions Bank.

Among credit unions, four locally-based credit unions received two-star problematic ratings: Bay Gulf Credit Union, GTE Federal Credit Union, Suncoast Schools Federal Credit Union and Tampa Bay Federal Credit Union, all of Tampa.

Douglas Winton, market president of Republic Bank in the Bay area, sees more bank failures ahead. Banks across Florida are scrambling to raise capital from investors to make up for all their bad loans they have to write down.

Often, banks are finding that investors aren't willing to put up any additional money because they're nervous about the banks' financial state. Winton's own bank is rated three stars, or "adequate," by BauerFinancial.

"It's a rough ride," he said of community banks' experience. "Many are having a rough time of it."