Bad debt is likely to keep Bank of Florida Corp. operating at a loss for the rest of 2009 before it begins to ease, Chief Executive Officer Michael McMullan said Tuesday.
The Naples-based bank holding company reported a net loss of $6.5 million, or 51 cents per share, for the quarter ended June 30, compared to net income of $4,000, or less than a penny a share, for the same period a year ago.
The company's shares fell sharply following the morning earnings announcement, trading as low as $2.74 before closing at $2.95, down 55 cents from Monday's close.
The company reported nonperforming loans of $141 million, or 11.1 percent of total loans in the quarter, up $26 million from $115 million or 8.9 percent of total loans in the first quarter.
"The remainder of 2009 will be the peak of non-performing loans and then in 2010 we will see a decline in new non-perming loans," McMullan said. "2010 will be the beginning of working back toward normal."
Many banks in South Florida have seen their bad debt increase as tens of thousands of homeowners defaulted on mortgages.
Bank of Florida Corp. set aside $9.8 million for loan losses, up from $6.7 million in the first quarter and $1.6 million in the second quarter of 2008.
Bank of Florida is a holding company for Bank of Florida - Southwest, with branches in Collier and Lee counties; Bank of Florida- Southeast, with branches in Broward, Miami-Dade and Palm Beach counties and Bank of Florida -Tampa Bay in Hillsborough and Pinellas counties.
McMullan said the company is managing its troubled assets as a division, while still seeking growth opportunities in other divisions.
"We continue to have a resilient core business," McMullan said.
The holding company's trust division, Bank of Florida Trust Company, reported assets under advisement grew 21 percent to $630 million.
The company also received $4.1 million during the quarter in proceeds from the sale of preferred stock.
Bank of Florida Corp. also reported that it lost about $230,000 due to the failure of Atlanta-based Silverton Bank in May. Silverton made loans and sold services to other banks.
The Naples-based bank holding company reported a net loss of $6.5 million, or 51 cents per share, for the quarter ended June 30, compared to net income of $4,000, or less than a penny a share, for the same period a year ago.
The company's shares fell sharply following the morning earnings announcement, trading as low as $2.74 before closing at $2.95, down 55 cents from Monday's close.
The company reported nonperforming loans of $141 million, or 11.1 percent of total loans in the quarter, up $26 million from $115 million or 8.9 percent of total loans in the first quarter.
"The remainder of 2009 will be the peak of non-performing loans and then in 2010 we will see a decline in new non-perming loans," McMullan said. "2010 will be the beginning of working back toward normal."
Many banks in South Florida have seen their bad debt increase as tens of thousands of homeowners defaulted on mortgages.
Bank of Florida Corp. set aside $9.8 million for loan losses, up from $6.7 million in the first quarter and $1.6 million in the second quarter of 2008.
Bank of Florida is a holding company for Bank of Florida - Southwest, with branches in Collier and Lee counties; Bank of Florida- Southeast, with branches in Broward, Miami-Dade and Palm Beach counties and Bank of Florida -Tampa Bay in Hillsborough and Pinellas counties.
McMullan said the company is managing its troubled assets as a division, while still seeking growth opportunities in other divisions.
"We continue to have a resilient core business," McMullan said.
The holding company's trust division, Bank of Florida Trust Company, reported assets under advisement grew 21 percent to $630 million.
The company also received $4.1 million during the quarter in proceeds from the sale of preferred stock.
Bank of Florida Corp. also reported that it lost about $230,000 due to the failure of Atlanta-based Silverton Bank in May. Silverton made loans and sold services to other banks.
