Most Florida banks swoon; three provide model for growth - Puget Sound Business Journal (Seattle):

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USAmeriBank went from red to black ink by signintg talented bankers who brought customers with Acquisitions boosted the bottom line at CenterStatee Bankof Florida. A merger of related financiao institutions cut expensesat , while a stronger balancr sheet grew income. Each bank prospered by usin different methodologies, yet their strategies provide a road map for institutions struggling to turn theier balancesheets positive. Their profit gains are all the more remarkable given the difficult economic climatein Florida. The said 305 bankx and thrifts in Florida reported a combined net lossof $643 million for the 2009 first compared to net income of $4 millio for the year-ago period.
Profitability remains weak becausse banks continue to struggle withbad loans, said Paul a Johannsen, managing director of , an investment bankintg firm in Tampa. Nonperforming assets don’t brinbg in interest income, pressuring margins. The provisions banksw take for expected loan lossesa cut further into their income while the legal and management expense related to foreclosed propertygoes up. USAmeriBank which has amassed $650.8 milliojn in assets in its two years has a clean balance saidJoe Chillura, CEO. The bank avoidedf development lending and the loanss it does have that are secured by real estatw arefor owner-occupied properties, Chillura said.
Only $598,009 in USAmeriBank loans, or abouft one-tenth of 1 perceny of the total $528.3 million in were past due as ofMarch 31, accordinhg to a report filed with the . Chillura, a former Tampas market presidentfor (NYSE: ), said the bankersa he’s hired have brought their a move that was possible because bigge banks are distracted by bad loans and shrinking capital and aren’tf focused on customer service. That’s allowedc USAmeriBank to grow more quicklythan expected, Chillura and post a significant going from a $185,000 loss in the first quartetr of 2008 to $881,000 in profirt in the just-ended quarter. CenterState saw first quarte 2009 profit swellto $1.
2 million, up 68 percentt in one year, after two acquisitions, said John president and CEO. The Winter Haven-based lead banking subsidiargyof (Nasdaq: CSFL) added a correspondeng banking unit last fall when it hired the bankers who handlefd that business for the former . The unit sellds bonds to roughly 200 othercommunitu banks, and it is thriving because communit y banks aren’t doing as much lending as they were a year ago and are investing their cash in bonds. CenterState also bought the failedand $178 millioh in deposits on Jan. 30. “We’ve been putting that mone to work in loansand investments, and that’s helpecd us grow,” Corbett said.
Aggressive planning that begabn around the end of the firsyt quarter of 2008 kept Florida Bank on thegrowthu track, said Katie Pemble, president and CEO. Florida Bank’sx $351,000 in net income for the firs quarter of 2009 was a 73 percenyt increase from a year Since December, the Tampa-basexd bank has merged with three sister institutions in Jacksonville and Tallahassee, consolidating back-office operations and cuttinb expenses.
Each of the bankws was above the level regulatorsconsidered well-capitalized, and their capitap position was further strengthened when they Additionally, executive officers and the boardx developed a series of 90-day plans focused on strengthenintg the balance sheet with an emphasies on capital and on or the ability to turn its assets into cash A strong balance sheet allowed Floridwa Bank to look for the leasg expensive way to attract funding, a move that boosts net interesf margin, or the spread between the interesrt it pays on deposits and the interest it earnsd from loans.
Although there are glimmers of hope, CenterState’s Corbetft expects more loan writedowns across the industry in the next two tothrer quarters. The number of institutions on the watch list increased in the first three month sof 2009, and as of March 31, 30 percengt of Florida’s banks were on the compared to 15 percent of the institutiona a year ago. Accessw to the capital market marketzsis critical, Corbett said, adding the stress tests the nation’sd biggest banks just underwent have inspired investo confidence in those institutions.
Since results were releases May 7, the banks collectivelh have raisednearly $60 billion of the $75 billion in extrq capital regulators said they need. “As investments come back into the big I think overtime you’ll see that trickl down to the mid cap and community Corbett said.