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More Florida Banks Risk Closing, Study Says

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Banks with bad balance sheets could be in danger of closing down.

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By BAIRD HELGESON | The Tampa Tribune

Published: March 17, 2009

TAMPA - The number of Florida banks at risk of folding has more than doubled in the last few months, according to a Coral Gables rating agency.

Bauer Financial Inc., which has a five-star ranking system for banks and credit unions, gave a zero-star rating to 19 Florida banks after reviewing lenders' performance for the quarter ending Dec. 31. Only nine state banks received zeros the previous quarter.

First Commercial Bank of Tampa Bay is the only lender in the Bay area to get zero, dropping from two-stars the previous quarter.

The 20-year-old bank has more than $153 million in assets, but lost $3.3 million for the year. The bank had more than $16 million in delinquent loans for the quarter, nearly 12 percent of its total assets.

The bank's president and chief executive said First Commercial has healthy reserves and is in no danger of closing.

"We have got some toxic loans, no doubt about it," said Albert Salem Jr. "But we are not the only ones."

In Bauer's rankings, five-star is superior, three-star is adequate and one-star means the lender has problems.

Bay Gulf Credit Union, with $160 million in assets, dropped to a one-star rating from a two-star rating in June. It had about $4.8 million in delinquent loans by the end of 2008.

Suncoast Schools Federal Credit Union retained its two-star rating from the previous quarter. The Tampa-based credit union is the largest in Florida, with $5.9 billion in assets. About 3 percent of its loans are delinquent.

Suncoast Schools and GTE Federal Credit Union are discussing a merger.

"Our members have no concerns about the safety and security of our organization," said Tom Dorety, Suncoast School's president and CEO.

Dorety said the credit union's financial problems are limited to delinquent loans of its members, and has no connection to the nation's subprime mortgage meltdown.

Consumer deposits are not at risk if they stay below the Federal Deposit Insurance Corps.' insurance limits, which Congress increased from $100,000 to $250,000 through Dec. 31 for each depositor.

Insurance doesn't always put consumers at ease, so Bauer publishes its rankings to let consumers gauge for themselves the strength of various banks and credit unions. It uses data filed with the FDIC to assess the institutions.

Karen Dorway, Bauer's president, said the deterioration in Florida's banks should not have been a surprise, considering the state's tanking housing market. Banks in California, Nevada and Georgia face similarly tough times due to heavy exposure to losses in construction lending, she said.

NorthStar Bank is a beacon of optimism at 400 North Ashley Drive.

The bank opened in August 2007, during a brighter time in the economy and the housing market. It is still too new to be ranked by Bauer.

While other lenders focused on real estate, NorthStar found a niche in commercial and community banking, offering a more personal alternative to big corporate banks.

It grew 150 percent the first year, said Monty Weigel, NorthStar's president and CEO.

Real estate lending "can be a one-trick pony," Weigel said Tuesday. "And that circus isn't playing anymore."

RATING LOCAL INSTITUTIONS

Banks and credit unions from the Bay area with at least $100 million in assets.

BANKS

American Momentum Bank, Tampa – 3 stars

Bank of Florida, Tampa – 2 stars

Bank of Tampa, Tampa – 4 stars

Bay Cities Bank, Tampa – 3 stars

Community Bank of Manatee, Bradenton – 2 stars

Community Southern Bank, Lakeland – 3 1/2 stars

Cornerstone Community Bank, St. Petersburg – 3 stars

First Citrus Bank, Tampa – 3 stars

First Commercial Bank of Tampa Bay, Tampa – Zero stars

Flagship Community Bank, Oldsmar – 3 1/2 stars

Flagship National Bank, Bradenton – 1 star

Florida Bank, Tampa – 3 stars

Freedom Bank of America, St. Petersburg – 3 stars

Heritage Bank of Florida, Lutz – 4 stars

Horizon Bank, Bradenton – 1 star

Old Harbor Bank, Clearwater – 2 stars

Palm Bank, Tampa – 3 stars

Pilot Bank, Tampa – 3 stars

Southern Commerce Bank, Tampa – 3 1/2 stars

Sunshine State Federal S & L, Plant City – 5 stars

Synovus Bank of Tampa Bay, St. Petersburg – 3 stars

TCM Bank, Tampa – 4 stars

CREDIT UNIONS

Achieva, Clearwater – 5 stars

Bay Gulf, Tampa – 1 star

Florida Central, Tampa – 5 stars

Grow Financial, Tampa – 4 stars

GTE, Tampa – 3 stars

Midflorida, Lakeland – 5 stars

Publix Employees, Lakeland – 5 stars

Railroad & Industrial, Tampa – 5 stars

Suncoast Schools, Tampa – 2 stars

Tampa Bay, Tampa – 3 stars

USF, Tampa – 5 stars

Reporter Baird Helgeson can be reached at (813) 259-7668.

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