Tampa foreclosure listings grew in the commercial and residential sectors after Bank of Florida pursued foreclosure actions on its troubled commercial real estate and residential development mortgages.
Bank of Florida runs 13 branches across South Florida through its three community banks: Bank of Florida in Tampa Bay, Bank of Florida in the Southwest, and Bank of Florida in the Southeast.
In the July to September quarter, it reported 8 large commercial property foreclosures worth $20.2 million and it posted a total of $12.7 million in net charge-offs for several of its residential construction loans.
All in all, the bank has a total of 54 loans worth $74.2 million in foreclosure for the third quarter, representing around 50 percent of its total non-performing mortgage loans, which reached $150.1 million.
The percentage of non-performing loans compared to total loans was nearly 12 percent, a $9.1-million increase from 11.2 percent or $141 million in the previous quarter.
Altogether, Bank of Florida reported $78.1 million in total loss during the third quarter, or a per-share loss of $6.10. A significant cause of the increase in losses is its nonperforming portfolio, contributing to the rise in commercial and residential properties entering Tampa foreclosure listings and necessitating the bank to provide $25.7 million in the third quarter to cover loan losses.
According to bank CEO Michael Mullan, the bank has been working out its troubled assets efficiently. Since last year, it has restructured 26 commercial and residential loans worth $20.9 and lost about 12 percent from each loan just to keep the properties from foreclosure. It also has sold 20 foreclosure properties worth $16.1 million, with a loss of about 37 percent from each foreclosure sale.
Compared to the April to June quarter, third-quarter real estate loans dropped by 19 percent to a total of $238.2 million, but non-performing loans increased by 10.8 percent, up from 9.8 percent in the second quarter.
Provisions for loan losses increased to 3 percent of all loans, up from almost two percent in the previous quarter. Total deposits rose by 8 percent or $58.4 million and have increased further by $84.5 million since the end of September.
According to McMullan, the bank has been doing relatively well and will be able to comply with state and federal requirements concerning the bank’s risk reduction efforts and capital level.
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