Miamidade Banks Financial Health On Mend
Written by Scott Blake on December 22, 2011
By Scott Blake
The financial health of Greater Miami’s banks improved slightly as a whole this year, according to a leading bank rating firm.
The upward trend among federally-insured local banks reflected improvements in the industry as a whole in Florida and nationwide, according to Coral Gables-based BauerFinancial Inc.
The latest ratings, based on Sept. 30 financial data, show the nation’s financial system is slowly on the mend, with more than 42% of US banks and credit unions earning BauerFinancial’s highest 5-star rating.
At the other end of the spectrum, 11% of US banks received 2-star ratings or less, putting them on the firm’s list of troubled and problematic banks.
The ratings are based on banks level of capital; their profitability or lack thereof; their amount of nonperforming assets, such as delinquent loans; and their historical performance.
"Overall, we’re seeing some upward profitability through the year," said Karen Dorway, Bauer’s president and director of research.
Among 38 rated banks based in Greater Miami, five, or 13.2%, had improved ratings from a year earlier and only one, or 2.6%, had a lower rating than last year. A large majority — 32 — saw no change in their ratings.
The data also show that Florida banks still have a lot of room for improvement. Bauer rated 37.3% of Florida banks as troubled or problematic — the second-highest percentage in the nation behind Georgia at 38.4%.
Greater Miami banks fared somewhat better than the state as a whole, with 12, or 31.6%, receiving a 2-star rating or less.
A big reason the number of low-rated banks in Florida was high is because the state was among the hardest hit by the real estate crash and mortgage crisis, Ms. Dorway said.
"Some [banks] are working through difficulties with delinquent loans," she added, "and some are seeing their number of delinquencies coming down," possibly through mortgage "workouts," short sales, or foreclosures.
Local banks that received 5-star ratings were, in alphabetical order: BankUnited of Miami Lakes, Intercontinental Bank of West Miami and Northern Trust of Miami.
A 5-star rating means a bank is considered as "superior."
Local banks that received 4-star ratings were: Banesco USA of Coral Gables, Capital Bank of Miami, City National Bank of Florida of Miami, Continental National Bank of Miami, Espirito Santo Bank of Miami, First National Bank of South Miami, Helm Bank USA of Miami, Plus International Bank of Miami, Sabadell United Bank of Miami and TotalBank of Miami.
A 4-star rating means a bank is considered "excellent."
Nationwide, 884 banks were on Bauer’s troubled and problematic list — the fewest since the first quarter of 2009, or 2½ years ago.
In Florida, the 37.3% of banks that received 2-star ratings or less was down from 38.4% last year, based on September 2010 financial data. Meanwhile, the percentage of Florida banks that made Bauer’s recommended list rose to 25.8% this year, up from 17.7% a year earlier.
About the firm’s ratings, Ms. Dorway said: "This is done for anyone interested in the financial condition of their bank."To read the entire issue of Miami Today online, subscribe to e -Miami Today, an exact digital replica of the printed edition.