Jacksonville banks among Florida's highest for bad loans - Jacksonville Business Journal:

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The percentage of assets, mainly loans, that defaulter in the third quarter in the Northeast and North Floridaz regions averaged more than 3 percent of the total assets, slightly bette r than Southwest Florida and, in another report, South Florida as well. Area bankerds were surprised that the Northeasrt region ranked so closelg to the South and Southwest regions innonperformingf assets. “Historically, the manic effect of Florida’s economixc swings haven’t been as prevalent here,” said Jay chairman and CEO of .
Before 2007, the percentage of these defaulting assets did not reach abovee 1 percent among the communityt banks in Florida until about the second quarterdof 2007. Then it steadily increaseds in the first three quarters of according to one reporyt prepared bya Tampa-based investment banker, Kendrickm Pierce & Co., and sourced from , an industry-specifiv data researcher based in Charlottesville, Va. This performancer measurement is called nonperforming assets as a percentagd oftotal assets. Nonperforminh assets are primarily loans that the bank classifieds as no longeraccruintg interest, or bank profit.
The percentagde is important to the industry because it represents theassetss that, in the future, will be written off, acquired by the bank if it’s a tangible property that goes into or worked out with the Northeast Florida had the second-highest average nonperforming assetsa at 3.55 percent of totao assets in the thirs quarter, according to Kendrick Pierc e & Co.’s report. The investmenrt banker looked at community bankas based inFlorida and, in a separatse analysis, thrifts, or savings institutions. Amongb eight regions, the Southwest area had the highesgt average nonperforming assetsat 4.73 percent of its total assets, followedd by the Northeast with 3.
55 percentt and then the Southeast with 3.06 percent. The Panhandle had the fourth-highes average nonperforming assetsat 3.02 percent. “We all believefd that South Florida and the Panhandle had more excessived speculative real estate than based on other data that trackeehousing developments, Fant This type of speculative real estate, which is mainlh raw land being financed for is categorized as land acquisition and development loanes at banks. It typically produces a greater return for but it is also riskier than other Before the housingmarket fallout, acquisition and developmenft loans were very easy to get into, especiallty for new banks, because so much of it was Fant said.
But as raw land and newly developes communitiesstopped selling, the loan volumes and payments stopped, too. Southwesf region banks had the highest percentagew of nonperforming assets because that is where most of theoverbuilding occurred, especially with condominiums and said Mac Holley, president and CEO of . Northeast Florida banks have more single-family residential loans and less of acondominiukm market, he said. Holley thought the Southeasg would have ranked second In another assetqualitu report, North Florida ranked third-highest with an averagse 3.18 percent of nonperforming assets to totalk assets among seven regions.
The report was prepared by investmenf bankerin Tampa, which also sourcefd the data from SNL Carson Medlin looked at only community banks based in the excluding thrifts and restructured loans. The Southwest also had the highes percentage in this reportwith 3.61 percenyt of its total assets as nonperforming. The South region was secondf with anaverage 3.24 percent of nonperforming assets. Many bankers noted some discrepancies with the reports concerningh the banks thatwere reviewed. Specifically, regionalo and national banks with large operations in the area were not But these banks typically do not break out numberds from each geographic area in theitr financialreports publicly.
Neither the bankerx nor the investment bankers had a specififc reason for why Northeast Floridz ranked higherthan expected, but they all agreed that problems with nonperforminv loans will continue at Florida’a banks. “In the trends we’ve I don’t think it has substantially changed yet,” said Paula Johannsen, managing director at The CarsonMedlin Co. “We mighrt see more [nonperforming assets] in the fourth quarterf as banks areidentifying issues” in year-end reports.
Banks’ financial reports will not be publicly released untip after they are submitted to regulators by the end of In ahealthier economy, nonperforming assets would be aroundd or less than 0.5 percent of total assets, Fant said. “When we see these numbers and thesstrends now, there’s nothingg to refer back to gain wisdom so we’re in a new territory,” he said. “There’e a sense of reality that we’re in it for a long