The second quarter was a strong one for South Florida banks, with a high number receiving star upgrades. And for the first time in quite a while, there was a higher proportion of strongly rated banks in the tri-county area than across the state.
Most South Florida-based banks remained strong through the second quarter of 2016, with the number of banks awarded “recommended” ratings of four or five stars increasing by three compared to the previous quarter, according to Coral Gables-based Bauer Financial.
The financial research and analytics firm awarded recommended ratings to 39 South Florida banks in the second quarter. That amounts to 78 percent of the 50-institution market.
Bauer awards a recommended rating to banks it deems financially stable and unlikely to fail. A “troubled and problematic” rating of two stars or less means the bank’s fiscal health may be in danger.
Of South Florida’s 50 banks, seven received star upgrades. For three of those banks that meant earning recommended ratings of four stars. Coral Gables-based Gibraltar Private Bank & Trust, Fort Lauderdale-based Landmark Bankand Boca Raton-based Legacy Bank of Florida all were upgraded from 3.5 stars to 4 stars in the second quarter.
Coral Gables-based Banesco USA was also upgraded in the second quarter, reaching a 5-star rating from its previous recommended 4-star rating. A 5-star rating is the maximum rating awarded by Bauer.
For the first time in a long time, the tri-county area had a higher proportion of recommended banks than the Sunshine State as a whole – although just barely. Florida increased its proportion of recommended banks to 78 percent in the second quarter up from 73.9 percent in the first quarter and 69.8 percent in the fourth quarter.
In Florida as a whole, 75.5 percent of banks were recommended.
Still, relative to bank ratings across the nation, South Florida still lagged. Approximately 86 percent of banks in the U.S. received recommended ratings in the second quarter, up from 84.4 percent of banks in the first quarter, and 83.5 percent of banks in the fourth quarter.
Key West-based First State Bank of the Florida Keys maintained its recommended rating of five stars in the second quarter.