Still Going Strong

Still Going Strong

BANKING Issue by Mark Gordon | Managing Editor

Since 1990, Jacksonville-based investment banking firm Allen C. Ewing & Co. has published a detailed report and analysis of Florida's banking industry and where things could be headed in the future. The 2005-2006 report, presented June 4-7 at the Florida Bankers Association's 112th annual convention in Colorado Springs shows that Florida continues to shine when compared to other parts of the country.

The report notes that many bankers share the same concerns as they did in the 2004-2005 survey, with rising interest rates, terrorism, the impact of credit unions and the cost of Sarbanes-Oxley compliance high on their lists. For the current report, none of those worries has dissipated and even worse, many can add real estate woes to the list.

Still, as the following charts show, the Florida banking industry keeps on producing, and at high levels. Here's a glance at the highlights:

Orion tops the top performers

One of the toughest rankings to break into is the Ewing High-Performing Community Bank list. It ranks the top 10 Florida community banks in terms of highest returns on average equity over the past three years. To qualify, the banks must have at least a 6% or higher total equity/total assets ratio, a maximum nonperforming assets/total assets ratio of 2% and average assets of $100 million or more during the three-year period.

Three Gulf Coast banks made the 2005 list, including Sarasota-based Century Bank FSB, which made it for the first time. Naples-based Orion Bancorp Inc. was the top performer.

2005 EWING TOP 10 COMMUNITY BANKS

The data is for the year ending Dec. 31. ROAE = return on average equity; ROAA = return on average assets. Dollars in thousands.

Year 3-Yr. Avg. Equity/ Efficiency Net Interest

Organized Assets ROAE Assets ROAA Ratio Margin

1. Orion Bancorp Inc., Naples 1977 $1,739,901 26.55% 8.62% 1.57% 44% 4.66%

2. Florida Community Banks Inc., Immokalee 1923 $907,082 25.78% 8.77% 2.29% 29.17% 5.39%

3. Helm Bank, Miami 1989 $408,890 23.18% 6.72% 1.23% 55.01% 4.51%

4. FMB Banking Corp., Monticello 1906 $372,391 21.11% 8.60% 1.27% 58.01% 4.82%

5. Riverside Banking Co., Fort Pierce 1982 $3,291,243 19.62% 7.35% 1.38% 55.68% 4.31%

6. Century Bank, A FSB, Sarasota (Thrift) 1985 $611,110 19.37% 6.74% 1.43% 44.53% 3.65%

7. Fidelity Bank of Florida, NA, Merritt Island 1990 $298,045 19.18% 12.09% 2.83% 15.98% 6.42%

8. Wakulla Bancorp, Crawfordville 1974 $403,342 19.07% 8.09% 1.27% 59.22% 5.04%

9. FCB Florida Bancorporation, Inc., Orlando 1999 $544,705 18.84% 6.53% 1.72% 40.15% 4.69%

10. Villages Bancorporation Inc., The Villages 1991 $809,355 18.39% 6.72% 1.11% 54.08% 3.86%

(The equity/assets ratio was computed at bank level and Helm Bank is an S corp. for tax purposes; data is shown using a 40% combined tax rate)

Source: SNL Financial, Allen C. Ewing & Co.; prepared by research department, Allen C. Ewing & Co.

NEW BANKS ATTRACTING INVESTORS

Florida is leading the way nationwide in attracting startup bank capital. As the Ewing report states, "Community bank stocks are growth stocks, having a ready exit strategy provided by the continued consolidation of the banking industry."

NEW, EXPANDING STOCK OFFERINGS

Dollars are millions, 2004-06

Offerings Type Raised

Great Florida Bank 3 Private $141.7

CNL Bancshares Inc. 4 Private $113

U.S. Century Bank 3 Private $90

Florida Bank Group Inc. 3 Private $87.5

Bancshares of Florida Inc. 3 Private/Public $85.1

Coast Financial Holdings Inc. 2 Private/Public $61.8

Florida Capital Group Inc. 2 Private $45

First State Financial Corp. 2 Private/Publi $31.2

United Heritage Bankshares of Fl Inc. 1 Private $21

Total 23 $676.3

Source: SNL Financial, Allen C. Ewing & Co.

Florida leads in deposit growth

Among the nation's top 10 in deposits, Florida has the biggest growth percentage from 2003-2005, at 13.08%. Nevada, with a 22.93% growth rate, and Arizona, with a 14.05% growth rate, didn't have enough in overall deposits over that time to make the top 10.

TOP 10 STATES IN DEPOSITS

Through June 2005; dollars in thousands

Growth Avg. deposits

Deposits 2003-05 Branches per branch

California $754,942,423 10.71% 6,779 $111,365

New York $707,540,434 7.87% 5,048 140,163

Texas $361,014,404 9.13% 6,089 59,290

Florida $341,844,542 13.08% 5,202 65,714

Illinois $307,479,853 3.57% 4,740 64,869

Pennsylvania $225,237,756 4.05% 4,644 48,501

Ohio $201,186,830 -2.36% 3,996 50,347

North Carolina $185,430,573 11.84% 2,590 71,595

Virginia $155,263742 9.40% 2,481 62,581

Georgia $149,715,481 9.49% 2,2,695 55,553

United States $6,042,003,158 7.25% 92,326 65,442

Source: SNL Financial, Allen C. Ewing & Co.

Growth attracts out-of-state banks

Historical growth and predicted growth of Florida's banks have led banks based in other states to look for opportunities to get in on the good times. There were 72 out-of-state banks operating in Florida at the end of 2005 that held about 70% of the state's deposits. The 72 banks have headquarters in 24 states, and there also 12 international operations with activity in the state.

NON-FLORIDA BANKS

IN FLORIDA

Alabama 11

Georgia 9

New York 7

Ohio 6

North Carolina 4

Four states and Puerto Rico have 3 banks in Florida, six states have 2 banks and eight states have one bank.

Source: SNL Financial, Allen C. Ewing & Co.

Population growth fueling deposit growth

One reason deposits are expected to grow so rapidly in Florida is the state's population growth. Florida is expected to grow 12% from 2005 to 2010. Also, four of the top 10 growth areas nationwide over that time are in Florida; two of those areas, Naples and Fort Myers, are on the Gulf Coast. Florida also boasts four markets on the top 10 deposit growth list.

10 FASTEST-GROWING AREAS, DEPOSITS

% Chg., 2003-05

1. Sioux Falls, S.D. 123%

2. Stockton, Calif. 107%

3. Ogden-Clearfield, Utah 83%

4. Reno-Sparks, Nev. 47%

5. The Villages 46%

6. Pahrump, Nev. 24%

7. Daphne-Fairhope, Ala. 24%

8. Jacksonville 23%

9. Fort Walton Beach-Destin 23%

10. Palm Coast 22%

10 FASTEST-GROWING AREAS, POPULATION

% Chg., 2005-10

1. Palm Coast 48%

2. Fernley, Nev. 29%

3. The Villages 26%

3. Greeley, Colo., 26%

3. Naples-Marco Island 26%

6. Saint George, Utah 25%

7. Las Vegas-Paradise, Nev., 24%

8. Rexburg, Idaho 22%

9. Cape Coral-Fort Myers.............22%

10. Heber, Utah 22%

Source: SNL Financial, Allen C. Ewing & Co.