Despite Florida Home Mortgage Loan Slowdown, Local Banks Hold Strong

The Florida housing market may be cool - compared with the last five years - but local banks remain on steady footing. In the quarter that ended March 31, 52 of 74 banks in Palm Beach, Martin, St. Lucie, Indian River and Okeechobee counties, earned a rating of four stars or better from BauerFinancial Corp.

The corporation rates banks and thrifts quarterly on a scale of zero to five stars based on data from the Federal Deposit Insurance Corp., which regulates financial institutions. No institution received a rating of less than three stars, which indicates adequate financial health.

BauerFinancial President Karen Dorway does not see that changing anytime soon.

“I’m not seeing any huge red flags,” she said, but added that narrower margins are making it harder for banks to earn money. Right now, the gap between what banks earn on their assets and what they pay out on their deposits is shrinking.

Fewer Florida home loans; Healthy banks

Most banks maintained their ratings despite sluggishness in a real estate market that previously helped bolster bank balance sheets with refinancing fees and new Florida home loans.

“I think we’re seeing some slowdown in the residential lending, but the rest of the market seems strong,” said Dick Aldred, Fidelity Federal Bank & Trust’s chief financial officer.

First Southern Bank President Peter Mottek said increased competition among banks for deposits and Florida home mortgage loans makes this a good time for customers. Mottek’s bank has had five stars for the last four quarters.

“They can get outstanding savings rates and attractive financing,” he said of customers. “The banks have to stay on their toes.”

This is just another way of saying it’s a buyer’s market. Prices will soon come down and banks will be more likely to agree upon terms for a Florida home loan.