Starting a community bank in Florida used to be as common as pouring a glass of orange juice.
The number of banks based in Florida has dropped to a modern low, joining a national trend of U.S. banking institutions that are dwindling to numbers not seen since the Great Depression.
The last newly chartered commercial bank to open in Florida was in 2010. The last one in Tampa Bay was in 2007. Three or more years without a bank start-up in the state was unthinkable not long ago.
Commercial banks based in Florida peaked at 276 in 2007, just as the economy tanked, and a steep slide brought the number to 186, according to state and federal banking data.
Nationwide, the number of federally insured institutions fell to 6,891 in the third quarter, the lowest figure since regulators began keeping track in 1934, say federal regulators.
The drought in Florida banking reflects a series of tough economic events and sobering industry changes.
The severe recession hurt bank lending as many Florida businesses cut jobs and pursued survival strategies instead of borrowing money from banks for expansion.
Ultra-low interest rates — a Federal Reserve idea to encourage businesses and consumers to borrow cheap money for expansion, car or home buying — actually make it harder for banks to grow and profit.
Florida's long history of local investors starting, growing then selling community banks to bigger institutions is broken. Florida boasts few remaining mid-sized banks looking to buy smaller ones. And Florida is now dominated by banks like JPMorgan Chase, Bank of America and Wells Fargo — so big they can no longer be bothered to purchase community banks.
That discourages bank startups. And it renews concern that lending to Florida's small businesses may suffer with too much money controlled by big institutions.
Since 2002, 72 banks in Florida have failed, decimating the number of financial institutions that once populated the state.
There is a silver lining, of sorts. The remains of those failed banks were sold at discount prices to healthy institutions, some of them to Florida-based banks (like C1 Bank of St. Petersburg) still able and eager to grow.
But all those bank failures also means more of Florida's banking industry now lies in the hands of banks based outside Florida.
Scared by the country's financial plunge in 2008 and 2009, regulators pushed tougher rules making it more expensive to open new banks.
One Florida bank sees greener grass elsewhere.
In 2006, newly chartered American Momentum Bank was opened in Tampa by Texas investor Don Adam. Last week the bank said it will relocate its headquarters to Texas to pursue better opportunities there.
Let's hope this exodus is not the start of another banking trend for Florida.
Contact Robert Trigaux at firstname.lastname@example.org.