Make us your home page
Instagram

As number of Florida banks dwindle, starting new ones become rare event

Starting a community bank in Florida used to be as common as pouring a glass of orange juice.

No more.

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 trigaux@tampabay.com.

As number of Florida banks dwindle, starting new ones become rare event 12/09/13 [Last modified: Monday, December 9, 2013 10:05pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. Tampa Bay among top 25 metro areas with fastest growing economies

    Economic Development

    Tampa Bay had the 24th fastest growing economy among 382 metro areas in the country for 2016. According to an analysis by the U.S. Bureau of Economic Analysis, Tampa Bay's gross domestic product, or GDP, increased 4.2 percent from 2015 to 2016 to hit $126.2 billion.

    Tampa Bay had the 24th fastest growing economy in the country for 2016. Rentals were one of the areas that contributed to Tampa Bay's GDP growth. Pictured is attorney David Eaton in front of his rental home. 
[SCOTT KEELER | Times]
  2. Tampa Bay cools down to more moderate home price increases

    Real Estate

    The increase in home prices throughout much of the Tampa Bay area is definitely slowing from the torrid rate a year ago.

    This home close to Bayshore Boulevard in Tampa sold for $3.055 million in August, making it Hillsborough County's top sale of the month. [Courtesy of Bredt Cobitz]
  3. With successful jewelry line, Durant High alum Carley Ochs enjoys 'incredible ride'

    Business

    BRANDON

    As a child Carley Ochs played dress up, draped in her grandmother's furs.

    Founder Carley Ochs poses for a portrait in her Ford Bronco at the Bourbon & Boweties warehouse in Brandon, Fla. on September 19, 2017. Ochs is a Durant High and Florida State University graduate.
  4. At Menorah Manor, planning paid off during Irma

    Nursing Homes

    ST. PETERSBURG — Doris Rosenblatt and her husband, Frank, have lived in Florida all of their lives, so they know about hurricanes.

    Raisa Collins, 9, far left, works on a craft project as Certified Nursing Assistant Shuntal Anthony holds Cassidy Merrill, 1, while pouring glue for Quanniyah Brownlee, 9, right, at Menorah Manor in St. Petersburg on Sept. 15. To help keep its patients safe during Hurricane Irma, Menorah Manor allowed employees to shelter their families and pets at the nursing home and also offered daycare through the week. The facility was able to accommodate and feed everyone who weathered the storm there. [LARA CERRI   |   Times]
  5. After Irma, nursing homes scramble to meet a hard deadline

    State Roundup

    TALLAHASSEE — Florida's nursing homes and assisted-living facilities find themselves in an unfamiliar place this week — pushing back against Gov. Rick Scott's administration over new rules that require them to purchase generator capacity by Nov. 15 to keep their residents safe and comfortable in a power …

    In this Sept. 13 photo, a woman is transported from The Rehabilitation Center at Hollywood Hills as patients are evacuated after a loss of air conditioning due to Hurricane Irma in Hollywood. Nine have died and patients had to be moved out of the facility, many of them on stretchers or in wheelchairs. Authorities have launched a criminal investigation to figure out what went wrong and who, if anyone, was to blame. [Amy Beth Bennett | South Florida Sun-Sentinel via AP]