Florida's Most Troubled Banks and Thrifts

Federal Trust Corp. has announced that it is working to raise additional capital through a rights offering of common stock, which is expected to be completed during the second quarter.

In a phone conversation, CEO Dennis Ward expressed confidence in Federal Trust's prospects of weathering the real estate downturn, citing the coming rights offering, the recent strengthening of the institution's special assets staff, and his experience in the previous downturn in Florida real estate in the late 1980s and early 1990s.

Worst Loan Quality

Florida Community Bank of Immokalee (held by Florida Community Banks, Inc. FLCM) is the second-largest institution on the list and among those with the worst asset quality. Nonperforming assets (mainly construction and commercial real estate loans) comprised 15.10% of total assets as of March 31, and reserves covered just 13.87% of nonperformers.

Even so, the institution's net charge-offs of $338,000 during the first quarter were far less than its $906 thousand provision for loan losses. Over the past several quarters, as problem loans have increased so dramatically that the Bank has charged off relatively little, and even its low level of loan loss reserves has been sufficient. For all of 2007, Florida Community reported net charge-offs of just $2.1 million or 0.27% of average loans.

The bank posted net income for the first quarter of $500,000, and its leverage and risk-based capital ratios held up, at 12.72% and 15.72%.

So how are they holding down charge-offs? A call to the office of CEO Stephen Price seeking comment has not been returned.