This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Six Florida Banks Depositors Should Worry About

Of course, First Florida has a major advantage, being a subsidiary of Synovus Financial (SNV), a multibank holding company with $33.6 billion in assets spread over 29 subsidiary banks, at last count. The holding company would be expected to recapitalize First Florida if necessary.

Federal Trust Bank of Sanford is held by the thinly traded Federal Trust Corp (FDT), and it has followed the Florida trend, with a twist. The thrift charged off a total of $5.7 million in problem loans during the third quarter, and it claims that $2.4 million of the losses were caused when a mortgage company and loan servicer, TransLand Financial of Maitland, Fla., failed to remit loan payoffs it had received from borrowers. Federal Trust is seeking to recover its loss as part of a federal lawsuit, but recovery seems unlikely, as the bankrupt TransLand is facing more than 20 other lawsuits.

The thrift's nonperforming assets now comprise 5.82% of total assets, and the key ratio of nonperformers to core capital and reserves is 75.63%.

Coastal Bank of Merritt Island has $150 million in total assets. Nonperforming assets increased over the past two quarters and now total $4.7 million, or 3.79% of total assets. These are mainly single-family mortgages and construction loans. Unlike many other institutions on the list, Coastal Bank has not made significant additions to its loan-loss reserves this year. While this has kept earnings steady, its loan-loss reserves are low. Once again, the ratio of nonperforming assets to core capital and reserves tells the story, with 77.52% exposure to problem assets.

Century Bank FSB of Sarasota is one of the largest institutions on the list, with $903 million in total assets. Over the past few years, Century has been a strong earnings performer, with a return on equity usually exceeding 20%. Over the past three quarters, however, the decline in the thrift's asset quality has accelerated; nonperforming assets now total $28.4 million, nearly double the level last quarter. The bulk of the problem loans are residential mortgages and home-equity loans, with some commercial real estate and land loans.

With loan-loss reserves covering less than 16% of nonperforming loans, the thrift will likely make a large provision for credit losses soon, wiping out earnings for one or more quarters. Overall, Century's ratio of nonperforming assets to core capital and reserves is 73%.

(BankAtlantic does not appear on the table, because its ratio of nonperforming assets to total assets was just 2.49% at Sept. 30, and we limited our search those a ratio of 3% or higher.)

In a weak real estate market, smaller institutions in many key areas of the country face elevated risk of capital to problem loans. The seven banks and thrifts we have focused on are all facing capital shortages unless the real estate market quickly turns around. Depositors need to take note and monitor the health of their institutions, especially if managing accounts for businesses, municipalities such as school districts or other entities.'s Bank and Thrift Ratings are updated on a quarterly basis and offer a very conservative take on an institution's financial strength.

Ratings lookup tip: With 8,700 banks and thrifts, it can be a bit tricky to find your institution on the Ratings Screener . The easiest way to find an institution is to first click on the Banks and Thrifts in the Screener. Then select the state where your institution is headquartered, enter just the first word of the name, and scroll through the list to find your institution.

As originally published, this story contained two separate errors. Please see Corrections and Clarifications for December, and Corrections and Clarifications for November.

Philip W. van Doorn joined Ratings., Inc., in February 2007. He is the senior analyst responsible for assigning financial strength ratings to banks and savings and loan institutions. He also comments on industry and regulatory trends. Mr. van Doorn has fifteen years experience, having served as a loan operations officer at Riverside National Bank in Fort Pierce, Florida, and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a Bachelor of Science in business administration from Long Island University.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BBX $16.30 0.00%
BBF $13.82 0.00%
AAPL $111.60 0.00%
FB $94.26 0.00%
GOOG $646.67 0.00%


Chart of I:DJI
DOW 17,131.86 +47.37 0.28%
S&P 500 2,014.89 +15.91 0.80%
NASDAQ 4,838.6430 +8.1730 0.17%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs