One of every four Florida banks is now considered troubled, with the number of severely troubled banks in the Tampa Bay area doubling in recent months.
Bauer Financial, which released its ratings Tuesday, gave six area banks a "zero-star" rating for the fourth quarter, which means they are "troubled and problematic" and face "considerable challenges at this time." In other words, they are most vulnerable to joining 18 other Florida banks that have failed since the beginning of 2008.
Three of the banks were already zero stars: Bank of Florida, Tampa Bay; First Commercial Bank of Tampa Bay; and Southshore Community Bank in Apollo Beach. The three newcomers are Old Harbor Bank in Clearwater; Progress Bank of Florida in Tampa; and Southern Commerce Bank in Tampa.
Both Progress Bank and Old Harbor were previously two-stars, and Southern Commerce was a one-star.
Bauer Financial rates banks from zero to five stars. Five stars means "superior" and are on Bauer's recommendation list. First National Bank of Pasco in Dade City and Hillsboro Bank in Plant City are the only five-star banks in the bay area.
Despite the surge in problem banks, the Tampa Bay area is still faring better than other parts of Florida, particularly South Florida and the Bradenton area. Of 286 Florida banks, 47 received zero stars, up from 43 last quarter. In addition, 23 received a one-star "troubled" rating and four on the list have recently failed or are being operated by the Federal Deposit Insurance Corp. That puts 26 percent of Florida banks in the troubled or worse category.
The FDIC recently said the number of banks on its "problem list" swelled 27 percent in the past quarter to 702, the most since 1993. That translates to one of every 11 U.S. banks in need of more capital to stay afloat.
The problem is acute in markets such as Florida, where community bankers are dealing with high levels of problem loans, particularly in commercial real estate.
Ken Thomas, a Miami-based banking consultant and economist, predicts 200 more bank failures this year nationally, 20 of them in Florida. After opening a satellite office in Jacksonville to handle bank closings, the FDIC initially focused on Georgia and smaller banks in west-central Florida south of Tampa Bay, Thomas said.
"Starting this year, they are coming further south," focusing on South Florida, he said, citing four recent failures. "There are many more here to be closed."
Simultaneous with the bank update, Bauer also released ratings for credit unions. None of the 179 institutions included received zero stars.
Ratings were based on financial data for the period ended Dec. 31.
Jeff Harrington can be reached at email@example.com or (727) 893-8242.