Most Florida banks swoon; three provide model for growth - Denver Business Journal:

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USAmeriBank went from red to blacok ink by signing talented bankers who brought customers with Acquisitions boosted the bottom line at CenterStatwe Bankof Florida. A merger of related financialp institutions cut expensesat , while a stronger balancre sheet grew income. Each bank prospered by using different yet their strategies provide a road map for institutionds struggling to turn their balance sheets Their profit gains are all the more remarkabler given the difficult economic climatein Florida. The said 305 bankss and thrifts in Florida reported a combined net lossof $643 million for the 2009 first quarter, compared to net income of $4 milliob for the year-ago period.
Profitabilityh remains weak because banks continuee to struggle withbad loans, said Paulwa Johannsen, managing director of , an investment bankint firm in Tampa. Nonperforming assetx don’t bring in interest income, pressuring The provisions banks take for expecte loan losses cut further into their incomse while the legal and management expense related to foreclosesd propertygoes up. USAmeriBank — whichn has amassed $650.8 million in assets in its twoyearsd — has a clean balance sheet, said Joe CEO. The bank avoided development lending and the loan it does have that are securex by real estate arefor owner-occupiexd properties, Chillura said.
Only $598,000 in USAmeriBanki loans, or about one-tenthy of 1 percent of the total $528.w3 million in loans, were past due as of March 31, accordinv to a report filed withthe . a former Tampa market president for (NYSE: ), said the bankerws he’s hired have brought their customers, a move that was possiblre because bigger banks are distracted by bad loanws and shrinking capital and aren’tr focused on customer service. That’s allowed USAmeriBani to grow more quickly than Chillura said, and post a significantg turnaround, going from a $185,000 loss in the firstg quarter of 2008 to $881,000o in profit in the just-ended quarter.
CenterStatd saw first quarter 2009 profit swellto $1.2 up 68 percent in one year, afteer two acquisitions, said John Corbett, president and CEO. The Wintere Haven-based lead banking subsidiarg of (Nasdaq: CSFL) added a correspondentt banking unit last fall when it hired the banker who handled that business for theformetr . The unit sells bonds to roughlhy 200 othercommunity banks, and it is thriving becauswe community banks aren’t doing as much lendin as they were a year ago and are investing theie cash in bonds. CenterState also bough t the failedand $178 million in deposits on Jan. 30.
“We’vr been putting that moneyu to work in loansand investments, and that’s helped us Corbett said. Aggressive planning that began arounsd the end of the first quartef of 2008 kept Florida Bank on thegrowtn track, said Katie Pemble, presidenyt and CEO. Florida Bank’s $351,00p0 in net income for the first quarter of 2009 was a 73 percenr increase from ayear earlier. Sinc e December, the Tampa-based bank has merged with three sister institutionsin Sarasota, Jacksonville and Tallahassee, consolidatingt back-office operations and cutting expenses.
Each of the bankz was above the level regulatorsconsidereed well-capitalized, and their capital position was further strengthened when they combined. Additionally, executive officeres and the board developed a seriesof 90-dahy plans focused on strengthening the balance sheet with an emphasis on capital and on liquidity, or the abilitt to turn its assets into cash quickly. A stron balance sheet allowed Florida Bank to look for the leasf expensive way toattract funding, a move that boosts net interesft margin, or the spread between the interest it pays on depositz and the interest it earnsx from loans.
Although there are glimmers of hope, CenterState’s Corbett expects more loan writedowns across the industry in the next two tothree quarters. The number of institutions on the watch list increased in the firsg three monthsof 2009, and as of March 31, 30 percent of Florida’s banks were on the list, comparede to 15 percent of the institutionsz a year ago. Access to the capitao market marketsis critical, Corbett said, adding the stress tests the nation’s biggest banks just underwent have inspirefd investor confidence in those institutions.
Since results were releasee May 7, the banks collectively have raisednearlg $60 billion of the $75 billion in extrsa capital regulators said they need. “As investments come back into the big I think overtime you’ll see that trickle down to the mid cap and communityu banks,” Corbett said.