Seeing red

Banks based on the Gulf Coast grew net income 7% in 2014, but not every institution celebrated.

Southern Commerce Bank, for example, suffered through a tough year. Net income fell from the tens of millions to the hundreds of thousands in 12 months, and assets declined nearly 12%.

It's the latest stop on a tough road for the Tampa-based lender. It includes two failed acquisition attempts by outside companies, and nearly five years of federal sanctions that reduced problem loans, yet restricted lending.

But Southern Commerce might be headed back to an upswing. In January, the federal restrictions -- which hit many banks following the housing market crash -- were lifted. Also, a Colorado newspaper says the bank's parent, Kansas City-based Dickinson Financial Corp. II, plans to merge Southern Commerce and other bank chains it controls into a single brand popular on military bases: Academy Bank.

Another bank getting some unwanted attention is Encore Bank in Port Charlotte, where net losses grew from $149,000 in 2013 to nearly $1.8 million last year. Thomas Ray, the bank's CEO, is far from panicked, however.

“We've made it past the tipping point,” Ray says. “Profitability is coming.”

Encore opened in 2007 when other banks were closing, and executives knew to avoid the same fate they would have to focus on organic growth. “We started a bank at a certain size with 30% loan and deposits, and now we're coming up on 70% loan and deposits,” Ray says. “We've been able to do that without adding a lot of expense.”

Encore's six branches are focused on Lee and Collier counties, with one Sun City Center branch in Hillsborough County and a main office in Charlotte County. It's an area primed for growth, Ray says.

“The market is strong here,” he says. “In these three counties, there are only nine banks headquartered here, and we are one of them. While we might be a relatively young bank, we are not young bankers. We have good name recognition, and a lot of experience.”

More good news: Encore had a positive fourth quarter. It finished $332,000 in the black in terms of net income, and the bank's return on equity is 4.1%, compared to a negative 5.3% return through all of 2014.

Three other banks in the region, out of 44 with an area headquarters, posted net losses in 2014. One was Sunshine Bank in Plant City, which turned a $141,000 profit in 2013 into a $2.4 million loss in 2014r. Most of the losses for the bank came in the fourth quarter, when it posted a 20.7% negative return on equity. Sunshine is in the process of acquiring Community Southern Bank in Polk and Orange counties.

The Bank of Commerce in Sarasota finished with a $333,000 loss, an improvement from the $739,000 loss the year before. Tampa's Pilot Bank also had a better 2014, despite posting a loss: It improved from a negative $611,000 to $473,000.

Follow Michael Hinman on Twitter @BizTampaBay