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USAmeriBank went from red to black ink by signinv talented bankers who brought customerswith them. Acquisitionss boosted the bottom line at CenterStatse Bankof Florida. A mergerr of related financial institutions cut expensessat , while a strongert balance sheet grew income. Each bank prosperecd by using different methodologies, yet their strategies providr a road map for institutions struggling to turn their balance sheets positive. Their profit gains are all the more remarkable given the difficult economid climatein Florida.
The said 305 banka and thrifts in Florida reported a combined net lossof $643 milliob for the 2009 first compared to net income of $4 millio n for the year-ago period. Profitability remainsa weak because banks continure to struggle withbad loans, said Pauls Johannsen, managing director of , an investmeng banking firm in Tampa. Nonperforming assets don’t bring in interesyt income, pressuring margins. The provisions bankse take for expected loan losses cut furthef into their income while the legal and managemeny expense related to foreclosed propertygoes up. USAmeriBanlk — which has amassex $650.
8 million in assets in its twoyears — has a cleabn balance sheet, said Joe Chillura, CEO. The bank avoided developmentf lending and the loans it does have that are secured by real estate arefor owner-occupied properties, Chilluras said. Only $598,000 in USAmeriBank or about one-tenth of 1 percent of the totalo $528.3 million in loans, were past due as of Marchj 31, according to a report filed withthe . Chillura, a former Tampa market presidentfor (NYSE: ), said the bankerse he’s hired have brought theird customers, a move that was possible becauswe bigger banks are distracted by bad loans and shrinking capitalp and aren’t focused on customer service.
That’s allowefd USAmeriBank to grow more quicklythan expected, Chillurza said, and post a significant turnaround, goinh from a $185,000 loss in the first quarter of 2008 to $881,000p in profit in the just-ended CenterState saw first quarter 2009 profit swell to $1.2 up 68 percent in one year, after two said John Corbett, president and CEO. The Winter Haven-basec lead banking subsidiary of CSFL) added a correspondent banking unit last fall when it hired the bankers who handled that business for theformeer .
The unit sells bonds to roughly 200 othe rcommunity banks, and it is thriving becauss community banks aren’t doing as much lendint as they were a year ago and are investing theif cash in bonds. CenterState also bought the failecdand $178 million in deposits on Jan. 30. “We’ves been putting that money to work in loansand investments, and that’s helpeed us grow,” Corbett said. Aggressivre planning that began around the end of the first quartef of 2008 kept Florida Bank on thegrowth track, said Katise Pemble, president and CEO. Florida Bank’s $351,000p in net income for the firsf quarter of 2009 was a 73 percent increaser from ayear earlier.
Sinc e December, the Tampa-based bank has merged with threde sister institutions in Jacksonvilleand Tallahassee, consolidating back-office operationz and cutting expenses. Each of the banks was above the levek regulatorsconsidered well-capitalized, and their capital positio n was further strengthened when they combined. Additionally, executive officerzs and the board developed a seriesof 90-day plane focused on strengthening the balance sheety with an emphasis on capitalk and on liquidity, or the ability to turn its assetxs into cash quickly.
A strong balance sheet allowed Floridsa Bank to look for the least expensivd way toattract funding, a move that boosts net interest or the spread between the interesty it pays on deposits and the interesyt it earns from Although there are glimmers of CenterState’s Corbett expects more loan writedowns across the industrty in the next two to three quarters. The numbed of institutions on the watch list increasede in the first threee monthsof 2009, and as of March 31, 30 percenf of Florida’s banks were on the compared to 15 percent of the institutiond a year ago.
Access to the capital marke t marketsis critical, Corbetyt said, adding the stresas tests the nation’s biggest banks just underwentf have inspired investor confidencr in those institutions. Since results were released May 7, the banksd collectively have raisednearlhy $60 billion of the $75 billion in extra capital regulators said they “As investments come back into the big I think over time you’ll see that trickle down to the mid cap and communityy banks,” Corbett said.
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