Ocean Bank Reports 16 Percent Growth

Profits at Ocean Bank, a growing lending force which has been riding the wave of the South Florida real estate boom for some time, increased by 16 percent in 2005, the bank reported.

According to the Miami Herald business section, the Miami-based company announced that its net income hit a record $91.9 million in 2005, up from $79.2 million in 2004. The bank, which serves Miami-Dade County and Broward County, reported fourth-quarter earnings that were down, albeit, slightly from projected totals. It brought in $25.3 million, compared to $25.6 million, for the quarter that ended December 31, 2004. CFO Alberto Vega attributed the slight drop to the exceptionally strong fourth quarter posted in 2004.

About 60 percent of Ocean Bank’s loan portfolio is tied to real estate - assets that include land acquisition, commercial properties, hotels, warehouses, and even condominiums. While that is high compared to most banks, and real estate investing is considered riskier than other forms, the bank’s percentage of “bad loans” is at less than 1 percent of its $4.4 billion total as of the end of 2005.

Memo to the executive board: Don’t expect another year quite like this in 2006. With the Federal Reserve raising interest rates and Florida markets already overvalued, the real estate demand will likely cool down somewhat. But thanks to the state’s climate and the average rates on conventional Florida home loans hovering between 6 and 7 percent, the bank could turn a significant profit just the same.