Newspaper article Sarasota Herald Tribune

3 More Florida Banks Will Go under in 2013, Analyst Says

Newspaper article Sarasota Herald Tribune

3 More Florida Banks Will Go under in 2013, Analyst Says

Article excerpt

MORE THAN TWO YEARS HAVE passed since the last local bank failure, but even one close to home generates fresh speculation about the condition of Florida's financial sector.

Only three Florida banks have failed so far this year, compared with five at this point in 2012. The latest was Aug. 2, when First Community Bank of Southwest Florida in Fort Myers bit the dust.

Florida bank analyst Ken Thomas says it certainly won't be the last.

While the worst of the banking crisis is over -- 69 in-state banks have failed so far -- he expects at least three more Florida banks will go down in 2013.

"We estimate between 10 and 15 percent of Florida's 206 banks, or between 20 and 30, would be considered problem banks still lurking in the regulatory shadows," Thomas said. "This total is about 5 percent of the nation's 612 problem banks as of March 31.

"Florida's banking industry is out of intensive care but still in the recovery room. Any time 10 to 15 percent of an industry is troubled, it is not yet recovered, but it is far better than a few years ago when we had as many as one-third of our banks in trouble," he said.

Most of the weakest players have been closed and sold to healthy lenders. The last local bank to fail was Sarasota's LandMark Bank of Florida on July 22, 2011. It was one of nine community banks in Sarasota, Manatee and Charlotte counties to fall after the onset of the financial crisis in 2008.

"Compared to a few years ago, only a portion of the problem banks will actually fail, namely those that have little or no prospect of attracting outside capital," Thomas said. "Many of the others with good franchise value, such as good branch locations, will attract outside capital, some from Wall Street private equity banks and others from local groups."

C1 Bank, formerly of Lakewood Ranch and now headquartered in St. Petersburg, acquired First Community, a $265-million-asset bank with seven offices. C1 had earlier tried to buy U.S. Century Bank of Miami, the state's largest problem bank, but the deal fell through.

That would have been an example of a strong lender buying a weak one before it failed, the kind of deal that Thomas expects to see more frequently. …

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