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Robert Trigaux

U.S. banking rebounds, but Florida institutions lag with 62 percent still unprofitable



sheilabairfdicchairAP.jpgWake up and good morning. At first glance, the nation's banks seem to be improving. New national numbers from the Federal Deposit Insurance Corp. show bank profits rebounded in the second quarter. The comeback was led by the biggest institutions while many small and midsize banks continued to struggle. The nation's 7,830 banks and thrifts earned $21.6 billion in the three months that ended June 30, up from $18.5 billion in the first quarter. That reversed a $4.4 billion loss a year earlier, the FDIC reported Tuesday in its quarterly profile of the banking industry. "The banking sector is gaining strength," says FDIC Chairman Sheila Bair. (Bair photo, AP)

It all sounds good at least until we take a closer look at Florida. FDIC-insured institutions in the Sunshine State lost $263 million, combined, in the second quarter of this year. That's twice the amount ($132 million) those same banks lost in the first quarter of the year and more than they lost in the second quarter of 2009. Bottom line? The recovery of banks in Florida, unlike the spurt of industry profits on a national level, is not happening yet. And that reflects Florida's seriously lagging economy. Here's more from newspaper stories from Sarasota and the South Florida Business Journal (with especially interesting remarks by Miami bank analyst Ken Thomas). And here is a national overview (with "problem" bank chart, below) from the Wall Street Journal.

fdicproblembanklistchartjune2010wsj.gifA few other details (see more here) about the state of FDIC-backed banks in Florida:

* There are fewer of them. In the latest quarter ended June 30, 265 federally insured banks existed, down from 279 in the first quarter and 301 at June 2009. They decreased in number due to acquisitions by other banks and failures.

* Assets and deposits in the state are falling. At the end of June, banks held about $154 billion in assets and $124 billion in deposits. A year earlier, banks held $166 billion in assets and $131 billion in deposits.

* The percentage of institutions that were unprofitable as of June 30 was 62 percent. That's down from 71 percent that were unprofitable as of June 2009.

The FDIC's unpublished list of problem banks grew to a 17-year high of 829 from 775 three months earlier. Not a single new bank opened in the quarter, for the first time in the 38 years for which data are available.

-- Robert Trigaux, Times Business Columnist

[Last modified: Wednesday, September 1, 2010 6:28am]


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