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Synovus among 13 Florida banks on 'troubled' list

By Tom Zucco, Times Staff Writer
In print: Tuesday, May 6, 2008

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Thirteen Florida banks, including Synovus Bank of Tampa Bay, have been singled out on an updated watch list of troubled banks.

TheStreet.com Ratings Inc. targeted Florida for its update, reasoning that the state has been "on the forefront of the residential real estate calamity.''

First Priority Bank of Bradenton posted the worst loan quality and lowest capital ratios on the list. "The institution had a very bad first quarter, with nonperforming assets rising to 15.65 percent of total assets and a net loss of $3-million — its sixth straight quarterly loss,'' wrote Philip van Doorn, a senior analyst for TheStreet.com Ratings.

Doorn said Tampa's First Florida Bank would have been fourth on the list with 11.55 percent in nonperforming assets as of March 31, but the institution's holding company, Synovus Financial Corp., merged it into a larger subsidiary bank, Synovus Bank of Tampa Bay, on April 28.

"If we combine the numbers for First Florida and Synovus Bank of Tampa Bay … we have an institution with $1.7-billion in total assets," Doorn wrote. "Nonperforming assets would have comprised 5.31 percent total assets and loan loss reserves would have covered 35.88 percent. The combined institution would be well capitalized."

"It's a good thing that the $33-billion Synovus Financial has deep pockets," he wrote, "because transferring First Florida's problems to the larger Synovus Bank of Tampa Bay makes it appear that the latter may need more capital."

The situation for Synovus Bank of Tampa Bay, Doorn said, may look different at the end of the second quarter.

To come up with the watch list, Doorn started with year-end data for all Florida banks and S&Ls. "We picked out the ones with a nonperforming assets ratio greater than 5 percent, and then updated the data for March 31 that were was available," he wrote. "Since we were unable to analyze the full set of Florida data for March 31, we have probably missed some institutions that would have met our criteria."

Doorn said that while large banks like Citigroup continued to raise capital in the public markets last week, local banks in some regions "are competing to raise additional capital from local investors, private equity or any other way they can."