Many area banks stay in low standing

BRADENTON — Financial soundness remained weak among most local banks in the second quarter ended June 30, according to analyst BauerFinancial Inc.’s latest ratings released Thursday.

Five banks based in Bradenton or Sarasota received a two-star rating or worse from the Coral Gables firm.

The Lakewood Ranch-based Community Bank of Manatee was the only bank to show improvement in the ratings, moving up to a two-star rating from a one-star rating in the first quarter ended March 31.

Despite the improvement, Community Bank’s rating still indicates the financial institution is problematic based on BauerFinancial’s rating system.

BauerFinancial assigns star ratings on a scale of zero to five stars, with five being the strongest.

Strong ratings for local banks include First Manatee Bank, Parrish, three stars; Insignia Bank, Sarasota, three stars; First America Bank, Bradenton, four stars; and Gateway Bank of Southwest Florida, Sarasota, four stars.

Shaun Merriman, president and chief executive officer for Gateway Bank, was pleased BauerFinancial rated the local bank to be in excellent standing, given it was Gateway’s first time to receive a rating from the analyst.

BauerFinancial does not rank banks during the first two years of business as the firm considers it a startup and too new to rank. Gateway Bank was established in May 2008, Merriman said, and since then has been cautious about its commercial and residential lending.

“As everybody knows, it’s been a very tough economy,” Merriman said. “We’ve been taking a very measured approach to lending, and certainly sacrificing growth in the interest of quality. There’s no doubt we have to be cautious about residential lending and consumer lending. We’re fortunate that as of June 30 our nonperforming assets continued to be zero as they were the previous year.”

Banks rated with two stars or less are considered problematic or worse, according to BauerFinancial.

Community Bank of Manatee has $14 million in noncurrent loans through June 30, an increase from $12.8 million at the same period a year ago, according to the Federal Deposit Insurance Corp.

But Community Bank has come a long way since a zero-star rating through the same period a year ago and is expanding its presence by moving its current Tampa branch to a larger location.

“So far this year we have made over $20 million in loans in the Tampa Bay market and we are thrilled to have a larger location from which to serve our Tampa-based clients,” said Katie Pemble, president of Community Bank, in a news release.

Sabal Palm Bank’s noncurrent loans also increased from a year ago. The Sarasota bank has $7 million in nonperforming loans through June 30, compared to $4.7 million through June 30, 2009.

Sabal Palm remained at a two-star rating in the second quarter.

Initially, BauerFinancial assigned a one-star rating to Sabal Palm in the first quarter. But the analyst corrected Sabal Palm’s rating to a two-star rating through March 31 after chief executive officer Brian Hall informed BauerFinancial about new capital the bank raised.

Three local banks continued to carry a zero-star rating in the latest BauerFinancial report. Horizon Bank in Bradenton and two Sarasota banks, Bank of Commerce and Landmark of Florida, also received a zero-star rating after the first quarter.

Horizon Bank, which has $14.2 million in nonperforming loans through June 30, is approaching the end of federal regulators’ 90-day deadline to raise a minimum of $8.5 million or face further enforcement. The Federal Reserve Bank of Atlanta issued a prompt corrective action directive May 27, ordering the company to increase equity.