Community Bank of South Florida Inc (fka CBKS)

[Enterprising Investor]

Community Bank of Florida boosts profits, despite increase in troubled assets (7/25/14)

Community Bank of Florida received both good news and bad news during the second quarter in its quest to regain “well capitalized” status as the bank’s higher profitability was hindered by more troubled assets.

The Homestead-based bank, a subsidiary of Community Bank of South Florida (Pink Sheets: CBKS), earned $1.27 million, up from earnings of $741,000 in the first quarter.

That pushed its Tier 1 capital to $38 million on June 30. Its Tier 1 leverage capital ratio of 7.88 percent and total risk-based capital ratio of 11.7 percent were improved from capital ratios of 7.86 percent and 11.42 percent, respectively, on March 31.

However, they remained short of the capital ratios of 8 percent and 12 percent, respectively, that regulators required the bank to meet in a previous enforcement action. Therefore, Community Bank of Florida was “adequately capitalized” and must raise its capital levels.

The bank’s net interest income grew to $4.4 million in the second quarter from $4.3 million in the first quarter. As its problem assets increased, the bank took a $313,000 expense to reserve for future loan losses, up from a $208,000 expense in the first quarter.

Community Bank of Florida had $8.8 million in noncurrent loans, or 2.6 percent of total loans, and $20.2 million in repossessed property on June 30. That’s up from $7.2 million in noncurrent loans, or 2.15 percent, and $16.5 million in repossessed property on March 31. It identified $5.5 million in new problem loans during the quarter.

The bank held $5.5 million in reserve for future loan losses to cover 63 percent of its noncurrent loans on June 30. It also faces potential exposure should it have difficulty selling off its repossessed properties at book value.

Community Bank of Florida was the 22nd-largest bank based in South Florida on March 31, with $485 million in assets. By June 30, it was up to $488 million in assets.

The bank had $334 million in loans and $442 million in deposits on June 30. That’s up from $331 million in loans and $440 million in deposits on March 31.

http://www.bizjournals.com/southflorida/news/2014/07/25/community-bank-of-florida-boosts-profits-despite.html