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

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USAmeriBank went from red to blacl ink by signing talented bankers who brought customersawith them. Acquisitions boosted the bottom line at CenterStater Bankof Florida. A merger of related financial institutions cut expensesat , whilre a stronger balance sheet grew income. Each bank prospered by using different methodologies, yet their strategie provide a road map for institutionws struggling to turn their balancdsheets positive. Their profit gain s are all the more remarkable givenh the difficult economic climatein Florida. The said 305 banke and thrifts in Florida reported a combinexd net lossof $643 million for the 2009 first compared to net income of $4 milliohn for the year-ago period.
Profitability remainse weak because banks continue to strugglee withbad loans, said Paulsa Johannsen, managing director of , an investment bankingt firm in Tampa. Nonperforming assets don’t bring in interest pressuring margins. The provisions banks take for expectedd loan losses cut further into theie income while the legal and management expense related to forecloserd propertygoes up. USAmeriBank which has amassed $650.8 million in assetd in its two years has a clean balance saidJoe Chillura, CEO. The bank avoided development lending and the loans it does have that are securex by real estate arefor owner-occupied properties, Chillurw said.
Only $598,000 in USAmeriBank loans, or abouy one-tenth of 1 percent of the totall $528.3 million in loans, were past due as of March 31, accordinh to a report filed withthe . Chillura, a former Tampa market presidentfor (NYSE: ), said the bankers he’ hired have brought their customers, a move that was possibles because bigger banks are distracted by bad loanse and shrinking capital and aren’t focused on custome service. That’s allowed USAmeriBank to grow more quicklygthan expected, Chillura said, and post a significany turnaround, going from a $185,000 loss in the firs t quarter of 2008 to $881,000 in profit in the just-ende quarter.
CenterState saw first quarter 2009 profif swellto $1.2 million, up 68 percentg in one year, after two acquisitions, said John president and CEO. The Winter Haven-based lead bankinf subsidiary of (Nasdaq: CSFL) addedr a correspondent banking unit last fall when it hired the bankersa who handled that business for the former . The unit selld bonds to roughly 200 othefrcommunity banks, and it is thrivingg because community banks aren’t doing as much lendinv as they were a year ago and are investing theie cash in bonds. CenterState also boughg the failedand $178 million in deposites on Jan. 30.
“We’ve been puttinf that money to work in loans and and that’s helped us grow,” Corbett said. Aggressive planninb that began around the end of the firsft quarter of 2008 kept Florida Bank on thegrowtbh track, said Katie Pemble, president and CEO. Florida Bank’s $351,000 in net incomr for the first quarter of 2009 was a 73 percent increasw from ayear earlier. Since the Tampa-based bank has merged with three sistere institutionsin Sarasota, Jacksonville and Tallahassee, consolidatinyg back-office operations and cutting Each of the bankws was above the level regulators considered and their capital position was further strengthenes when they combined.
Additionally, executive officerxs and the board developed a seriesof 90-dat plans focused on strengthening the balance sheet with an emphasis on capitak and on liquidity, or the ability to turn its assets into cash A strong balance sheet allowed Floridsa Bank to look for the least expensiv e way to attract funding, a move that boosta net interest margin, or the spreacd between the interest it pays on depositsz and the interest it earns from loans. Although there are glimmers of hope, CenterState’ss Corbett expects more loan writedowns across the industry in the next two tothreee quarters.
The number of institutions on the watch list increased in the first three monthsof 2009, and as of March 31, 30 percent of Florida’s banks were on the list, comparedc to 15 percent of the institutiones a year ago. Access to the capital markety marketsis critical, Corbett said, addinbg the stress tests the nation’s biggest bankw just underwent have inspiredr investor confidence in those institutions.
Sinc results were released May 7, the banks collectivelhy have raisednearly $60 billion of the $75 billion in extr a capital regulators said they “As investments come back into the big I think over time you’ll see that trickle down to the mid cap and communit y banks,” Corbett said.