According to a South Florida Business Journal article by Brian Bandell titled “Bauer gives 44 Florida banks zero stars” only 19% of Florida banks have a recommended rating, the lowest number in the nation and 40% have a troubled or problematic rating, third worse in the nation behind Arizona and Georgia.
A weak banking system continues to impact South Florida business. The overexposure to real estate is now moving from the residential to the commercial real estate markets which will continue to pressure the capital of South Florida banks.
Further, Community Banks in South Florida are facing a mountain of regulations. One banker friend received comments from the Federal Deposit Insurance Corporation (FDIC) that though they are presently capitalized adequately, the bank will not be if they meet their growth plan without additional capital. This even though the bank is actively and successfully raising capital to continue growth. So regulators continue to react and constrain growth of those banks that are best positioned to help small business in South Florida.
On the Federal level, the Federal Reserve Bank is redeploying tarp funds to community banks to get funds to small business. So in a not so unusual situation, the regulators are working at cross purposes in pumping money into the banks, then over regulating their ability to actually lend.
It is time for the government to get out of the way and allow the free markets to work. That will be the best situation for the banks and small business in South Florida!