These Florida Banks Could Be in Danger

Third on the list was Freedom Bank of Bradenton, which was considered significantly undercapitalized, with a leverage ratio of 3.00% and a risk-based capital ratio of 4.97%, as of June 30.

Freedom Bank recently announced an agreement with Community Bank Investors of America, LP, for $5 million in new capital, contingent upon Freedom raising an additional $15 million from other investors.

Nonperforming assets, including loans past due 90 days and repossessed real estate, comprised 14.01% of total assets as of June 30 -- a huge increase from 8.14% last quarter. As would be expected in this environment, the majority of the problem loans were to residential real estate developers who stopped making payments as the housing demand collapsed.

At the end of the first quarter, loans past due 30 to 89 days (but still considered "performing") comprised 5.50% of total assets, and gave an indication of the large increase in nonperforming assets in the second quarter. As of June 30, loans past due 30 to 89 days comprised 2.23% of total assets, so hopefully the rise in nonperforming assets will moderate in the third quarter.

Spokesman Frank S. Knautz expressed confidence that the agreement with Community Bank Investors would lead to a large capital infusion, and that the $284 million institution would work through its loan problems.

While June data for savings and loan institutions is not yet available, we do know of one S&L that would make the list. Federal Trust Bank of Sanford (held by Federal Trust Corp(FDT Quote)) was adequately capitalized, with a risk-based capital ratio of 8.24%, according to the holding company's second quarter earnings release. This ratio declined from a revised 8.96% last quarter.