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It's time to give banks a closer look

Organized and funded by a Tampa Bay business equivalent of rock stars, the brand new NorthStar Bank officially opened last week in downtown Tampa. Its diverse backers and directors range from leading area philanthropist Dr. Kiran Patel and former Tampa mayoral candidate and now Renaissance Steel CEO Frank Sanchez to Sykes Enterprises founder John Sykes.

By Robert Trigaux, Times Business Editor
Published October 7, 2007

Organized and funded by a Tampa Bay business equivalent of rock stars, the brand new NorthStar Bank officially opened last week in downtown Tampa. Its diverse backers and directors range from leading area philanthropist Dr. Kiran Patel and former Tampa mayoral candidate and now Renaissance Steel CEO Frank Sanchez to Sykes Enterprises founder John Sykes.

NorthStar's arrival comes at an increasingly stressful time for banks and other lenders. The lousy state of the housing market is rippling across the Sunshine State as more homeowners struggle to make mortgage payments or simply pull back on their spending - and borrowing.

Folks who don't borrow make bankers unhappy. But folks who do borrow but don't pay back what they owe make bankers downright crabby.

NorthStar is called a "de novo," or new, bank. It joins a Tampa Bay banking market brimming with competitors. There are giant banks like Bank of America and Wachovia that are based elsewhere but have a big presence and dozens of branches here. There are mid-sized banks like Fifth Third of Cincinnati or Whitney Bank of New Orleans that bought local banks and have since expanded; and finally, there are locally headquartered banks.

I count roughly 15 local banks in Tampa, two apiece in St. Petersburg, Clearwater and Largo and others scattered from Trinity and Tarpon Springs to Lutz and Valrico. That's about 30 local banks, not to mention other newbies like NorthStar trying to pop up, such as Jefferson Bank in Oldsmar and Gulfshore Bank in Tampa.

As the area economy weakens - and things are slowing - some of these banks will struggle. We've seen the early signs. Bradenton's Coast Bank misfired in mortgage deals and may very well have failed if bank regulators not stepped in and found a rich buyer from St. Louis.

The good news is that Coast is the local exception. For now. Most area banks are doing pretty well. The handful that need some attention are not serious cases.

That, at least, is my take on our banks after looking at financial data federally insured banks must share with regulators. A Florida firm named Bauer Financial reworks all those numbers into a friendlier, six-point scale. Banks are given stars * with 5* indicating they are in superior condition, 3* being adequate condition, 1* being troubled and zero star being - this is my term - representing the walking dead. Coast Bank, which enjoyed a solid 3.5(*) status in June of 2006, was a zero star bank by the time it was sold this summer.

Bauer Financial's lists - these reflect June 30 figures - are helpful, especially in less stable times.

I'm writing about banks now because the volume of bad loans are rising. Foreclosure numbers are soaring, especially here.

Banks have enjoyed a long and healthy honeymoon, but it's time to pay more attention to their condition.

Here's the skinny. There were no other "zero" or "one" or even "two" star banks operating here as of June 30. I anticipate the list you can look at online now will look less healthy when the numbers for Sept. 30 are available.

Don't worry. We'll share those with you, too.

Robert Trigaux can be reached at trigaux@sptimes.com or (727) 893-8405.

[Last modified October 5, 2007, 23:06:40]