Local banks

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Of the top 25 local bank on theBusiness Journal’s list, 22 reported their resultd by deadline. Fifteen had their bottom lines move in apositivse direction, while seven suffered from declines compares to their fourth quarter However, all but two of these 22 banks reported a higherd level of noncurrent loanzs as of March 31 than at The amount of noncurrent loans more than doubled at five of these banks. After a difficult 2008, many Southb Florida banks appear to be turning the cornetrthis year, said Carlos J. Arboleda, practice directod for the banking and financial services group of recruiterin Plantation. He is getting more job requests fromlocal banks.
“Bankes are fighting more to retain and recruit good customeras andgood teams,” Arboleda said. “Not just on leadership, but also top like lenders and other He said the healthy local banks are wary of competition from stronger national plus banks from Canadza and Spain that have big expansion planws forSouth Florida. Yet, Arboleda said a handful of South Floridaz banks are saddled with so many problem loansthat weren’f of good quality to begin with.
“Banks that shovedf off the bad part of their booke in previous quarters to turn a profit got hurt in thefirsyt quarter, and they will continue to struggle,” he Miami-based banking analyst and economis Kenneth H. Thomas said the rise in noncurrentg loans shows that the recession continuedc in thefirst quarter. He believes that many Southn Florida banks that showed improvedc financial performance in thefirst quarter, even as they had more bad did so by underestimating the reserves they wouldc need for future loan losses. Most of these 22 banka reduced their reserve coverage ratio of noncurrentt loans in thefirst quarter.
“It’s hard to be real positivd here,” Thomas said. ’s capitao ratios plummeted to “undercapitalized” status according to regulatory guidelinee after itlost $11.5 million in the first Republic Federal Chairman and CEO Walter R. Cook said he is in talkw with investors toraiss capital, and expects the bank’s financial performancer will improve this year. The bank’s equity capitalp plunged intothe red, at negative $9.5 million as of Marc h 31. Under the more important capita l measurementto regulators, Republix Federal had Tier 1 capital of $18 It counted $29.
8 million in unrealized losses on available-for-salre securities toward Tier 1 capital but not as equity capital. Cook callec this an accounting issue, not a cash He said the bank intends to hold thesre securities until they mature at full Despite that extra boost to Tier1 capital, Republic Federal’e capital ratios still fell short. The biggesty gap was in total-risked based capital, whicj was 6.56 percent, instead of the 8 percenf required to be adequately capitalized and 10 percent to be well In October, the bank was hit with a regulatorhy order over its loan practices, and was requiredr to submit a business plan, including steps to keep its capital strong.
Cook would not say whethe r regulators are satisfied with its adherence to thatbusiness plan, which he said is private. To restoree its capital to acceptable levels, the bank is talking to existing and potential new investors abouttraising money, Cook It is also talking to its lenders abouty repurchasing some of the bank’sw subordinated debt, which would have a positive effect on the capital he said. Cook said that raisinhg capital, rather than selling the bank, was his A source with knowledge of the situatiomn at Republic Federal said it is in seriouas discussions with a Spanish bank that couldbuy it.
If that deal does not the future for Republic Federal Banklooks grim, the source said.