Newspaper article Sarasota Herald Tribune

Florida Banks Are Expected to Continue Strengthening

Newspaper article Sarasota Herald Tribune

Florida Banks Are Expected to Continue Strengthening

Article excerpt

FLORIDA ENDED 2012 WITH EIGHT bank failures, the smallest total since the early days of the financial crisis.

However, that figure was still enough to tie Florida with Illinois for the second-highest failure rate in the country. Georgia led the way -- for the second straight year -- with 10 failures in 2012.

A total of 66 Florida banks have now succumbed during the recession and its aftermath, including nine in Sarasota, Manatee and Charlotte counties.

But the pace of bank failures has clearly slowed in Florida, one of the states hardest hit by the real estate downturn and the recession. Bank closings tallied 13 in 2011, 29 in 2010, 14 in 2009 and two in 2008.

Nationwide, regulators shut down 51 banks in 2012, compared with 92 in 2011, 157 in 2010 and 140 in 2009.

And the Federal Deposit Insurance Corp.'s list of banks that remain at risk of failure is at its lowest point in three years. The FDIC tagged 694 banks for its problem list as of Sept. 30, just under 10 percent of all banks -- but well off the peak of 888 institutions in first-quarter 2011.

That list remains confidential, and most of the banks on it will not fail. Banking industry expert Ken Thomas has forecast between 25 and 50 bank failures this year, with up to six of them in Florida.

Analyst BauerFinancial Inc. recently gave 25 Florida banks its lowest grade, those most in danger of failing.

Using the so-called Texas ratio to measure bank health, investment banker Allen C. Ewing & Co. considers that 36 Florida banks could be vulnerable to failure. That was down from 41 banks in the second quarter, and from 48 six months earlier.

The ratio is determined by totaling a bank's non-performing assets and loans, plus loans delinquent for more than 90 days, and then dividing by its tangible capital equity, plus loan-loss reserve. A ratio of 100 or more is considered a warning sign.

Sarasota's The Bank of Commerce was the only local bank over 100, at 342.11 percent. But the bank has improved, with its ratio declining nearly 11 percent from the previous quarter.

Florida's 213 banks and thrifts earned $598 million through the first nine months of 2012, the best showing in six years. …

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