Twenty-two Florida banks have already failed this year, more than in the previous 10 years combined. Only Illinois, Georgia and California have had more banks go under since January.
The latest Florida banks to fall? Regulators on Friday seized Community National Bank in Bartow and Independent National Bank in Ocala.
More will fail soon. But that's not a bad thing. It's good. Florida has bunches of banks still open but so weak that they can't lend money. They don't want your deposits. They can't find any fresh capital and regulators already are breathing down their necks. They need to be closed and their assets sold to stronger players eager to lend and attract your business again.
This year's 22 failed banks is a good start at ridding the state of dozens of Florida banks beyond rescue. Think of it like the huge glut of home foreclosures we still must work through in this state. Or like the big collective credit card debt hanging over consumers. The faster we can whittle down those financial anvils, the quicker health will return to Florida's economy.
About 280 banks are based in Florida, most of them small. Conservatively, in this economic cycle I'd estimate another 40 or so are likely to be overcome by bad loans and shrinking capital and fall into regulatory hands.
Those banks then will be handed over for disposal and resale to the Federal Deposit Insurance Corp. By now, the FDIC is tired of seizing dying banks. Nationally, 118 banks have failed since the start of the year. But the FDIC by now is also very good at knowing which healthier institutions or investor groups are eager to deal for failed bank remains.
While Florida banks have failed as far south as Key West and as far north as Panama City Beach, most failures are clustered in the southeast and along the gulf coast from Bradenton south to Naples. That's where the worst collapse of housing and condo prices hurt so many banks.
Only one bank has failed this year in the immediate Tampa Bay market. That would be Tampa's Bank of Florida, which was seized in May. But three have failed in nearby Bradenton, two in Sarasota and five in Naples or Marco Island.
Five Tampa Bay area banks still open are "zero rated" by Bauer Financial as of the first quarter . That's the weakest possible ranking, so weak the odds of reviving in this rough economy are bad. The five are Clearwater's Old Harbor Bank, Apollo Beach's Southshore Community Bank and three in Tampa: First Commercial Bank of Tampa Bay, Progress Bank of Florida and Southern Commerce Bank.
Nearby Cortez Community Bank in Brooksville, Horizon Bank in Bradenton and Landmark Bank of Sarasota are also zero-rated banks, bringing to eight the most vulnerable institutions in the broader Tampa Bay area. All are FDIC insured, which means each customer's deposits are federally insured up to $250,000.
We're making decent headway on the troubled bank front. Let's see if most of those in need of disposal can be dealt with by the end of 2011, when Florida's recovery should be — no, better be — far more apparent.