Residential Rebound

During the depths of the recession, Cape Coral was one of the hardest-hit areas in the nation for residential foreclosures.

Now, in another sign of the economic turnaround, Preferred Community Bank is about to open a new office in Cape Coral, the Lee County bedroom community across the Caloosahatchee River from Fort Myers.

“We're doing basically anything and everything that relates to residential,” says Brenda O'Neil, chairman and CEO of Preferred Community Bank.

On an annual percentage-change basis, Preferred Community posted the second-largest increase in single-family home loans of any of the 41 banks headquartered on the Gulf Coast from Tampa to Naples. The bank posted a nearly 63% increase in loans secured by one- to four-family residential homes as of March 31, compared to the same date one year ago, according to the Federal Deposit Insurance Corp.

The residential market's recovery has provided new opportunities for banks as homebuyers return, inventory shrinks and prices rise. Overall, from Pasco to Collier counties, banks headquartered in the region reported nearly $4.3 billion in loans secured by one- to four-family homes as of March 31, up 9.9% compared with the same time last year, according to the FDIC.

But the recovery has been especially noteworthy in areas such as Fort Myers and Naples, where prices have risen by double-digit percentage rates over the past year.

“The market is very good,” says Gary Tice, chairman and CEO of First National Bank of the Gulf Coast. Prices are rising to 2005 levels as demand grows and supply shrinks, boosting the value of real estate collateral. “That's because there's only a certain number of lots available in Collier County,” Tice says.

Naples-based First National Bank posted the biggest annual-percentage increase in loans secured by one- to four-family homes, up 69% as of March 31.

Encore Bank is another lender that posted higher loan growth in this area. Although it is chartered in Port Charlotte, the bank's headquarters is located in Naples, and it posted a 48% annual increase in loans secured by one- to four-family homes as of March 31.

“Over half of that volume was in Lee County,” says Thomas Ray, president and CEO of Encore Bank.

Ray says Encore has boosted its “super jumbo” loan business, loans of more than $1 million to homebuyers.

“We've found it's a good experience, so we've expanded our lending team,” Ray says.

In some cases, loans secured by homes are used for other purposes. “Sometimes we do business with people who are entrepreneurial and they use home collateral for business purposes,” says Joe Catti, president and CEO of FineMark National Bank & Trust in Fort Myers.

Further north, in the Tampa Bay area, lenders also are boosting home loans. By volume, Raymond James Bank has the biggest portfolio of loans secured by one- to four-family homes. (Raymond James Bank officials could not be reached for comment.)

USAmeribank in Largo has the second-largest portfolio of residential loans, and CEO Joseph Chillura says his bank is targeting specific areas that are showing strength. These include South Tampa, downtown St. Petersburg, Westchase, Tampa Palms and beach areas.

Meanwhile, multifamily residential loans have been growing at a faster pace on an annual-percentage basis, up 29% as of March 31 for all banks headquartered from Pasco to Collier counties. Still, the overall loan volume is relatively small: $524 million in total.

Active lenders on multifamily include C1 Bank in St. Petersburg. Multifamily loans mirror the population growth as people migrate to Florida again, says Trevor Burgess, CEO of C1 Bank.