Pandora Bracelet Local banks get a mixed bag in

Local banks get a mixed bag in turbulent times

So how are small, local banks faring against the plague of mortgage foreclosure? It’s a mixed bag some are exploiting niches; some are rebounding and some are struggling. A sampling:

The Bank of Pandora Bracelet Tampa had to increase its loan loss reserves in the first quarter of 2008 but still ended up with a $2.4 million profit, unchanged from last year. The company even increased its dividend. “The niche our bank operates in doctors, lawyers, CPAs, engineers and other owner managed businesses so far is doing okay,” said executive vice president for commercial lending Henry Gonzalez.

American Momentum Bank, which had the good fortune of largely missing the real estate boom it opened for business in October 2006 has no problem assets. The Tampa company’s biggest problem right now: tons of liquidity, and nowhere to put it. “Many, many credit opportunities that exist in the (commercial real estate) market today cannot be prudently made because of the uncertainty in absorption rates,” chief operating officer Sam A. Davis said.

Bank of Florida Corp., the parent company of Bank of Florida Tampa Bay, reported first quarter earnings of $233,000 Tuesday, versus a $970,000 loss in 2007. A key reason was a reduction in its contribution to loan loss reserves.

Som Pandora Bracelet e local banks haven’t been so fortunate. Clearwater based Old Harbor Bank reported a first quarter loss of 23 cents per share, compared with a gain of 2 cents per share last year. Delinquent loans and more provisioning for loan losses were partly to blame. “One big loan in a small bank can really have an adverse impact on our financial statements, more so than at a large bank,” pres Pandora Bracelet ident and CEO Bill Short said. “It’s not a systemic thing.”

Moreover, it’s a little soon to declare the bay area’s homegrown banks healthy. First quarter results aren’t even available yet for many because the Federal Deposit Insurance Corp. has yet to release them.

But some banking experts argue the industry’s woes are being blown out of proportion. Dick Bove, a bank analyst in Lutz, said that despite myths to the contrary, banks today are well capitalized and are lending money. What they are not doing now is making risky loans to Pandora Bracelet people with uncertain credit.

The industry’s accounting system may also exaggerate its problems. Short, the Old Harbor Bank CEO, cited the “double whammy” banks face when their loans grow troubled. Banks have to set aside more funds to cover potential losses. But also, when loans become delinquent, banks have to deduct the interest income they recorded on them the prior 30 to 90 days.

Short said he thinks the worst is over. “At least in our peer group, we’ve by and large identified most of the (bad loans). Now, it’s just a matter of working through the cycle.”