A third of Florida banks `problematic' or `troubled'

December 24th, 2009

Miami Herald--December 23, 2009


About 36 percent of all Florida banks are ``problematic'' or ``troubled'' -- three times the national average -- according to a report released by BauerFinancial, a Coral Gables research firm.

BauerFinancial reported that the number of banks headquartered in the state that received two stars or less grew from 99 in the second quarter to 106 in the third quarter.

On the other end of the spectrum, the number of recommended banks (those with four or five stars) held steady from quarter-to-quarter at 50 institutions.

Locally, four banks saw their ranking downgraded. The Bank of Coral Gables and TotalBank each went from three stars to two stars; Mellon United National Bank went from two stars to one star; and Union Credit Bank of Miami went from two stars to zero stars.

Plus International Bank of Miami saw its score upgraded from two to three stars.

None of these banks returned calls requesting comment Tuesday.

BauerFinancial, which has been tracking bank performance since 1983, uses data provided to federal regulators to rate banks and credit unions. The quarterly reports do not include the 140 banks that have been closed by the FDIC this year.

Florida's banks have been caught in the pincers of the recession, the real estate crisis and the financial meltdown, said Ken Thomas, a Miami-based independent banking analyst and economist.

``This is the worst year we've had in Florida banking that I can remember,'' he said. ``And I've been doing this for 40 years.''

So far, 14 Florida-based institutions have been shut this year. Last week regulators seized Peoples First Community Bank of Panama City and on Dec. 11 Miami's Republic Federal Bank was closed and reopened by its new owner, 1st United Bank of Boca Raton.

Both Peoples First and Republic Federal had zero stars in BauerFinancial's report.

Even so, just because a bank has a low score, does not mean it is bound to fail, Thomas said. Regulators also look at an institution's ability to access private funds.

Nationally, BauerFinancial found 57 percent of all banks had the highest, four- and five-star ratings, up from 56 percent during the previous quarter.

In addition, the number of problematic and troubled banks rose to 11 percent from 10.5 percent during that period, BauerFinancial reported.