The Real Deal Miami

Real estate loans grow about 10% at SoFla’s biggest banks

Some institutions boosted by acquisitions, others cite favorable market conditions for increase

August 25, 2014 03:00PM
By Mike Seemuth

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John Kanas

John Kanas

The 15 largest South Florida-based banks expanded their real estate loan portfolios in the first half of the year by an average of 10.2 percent, according to quarterly financial statements filed with the Federal Deposit Insurance Corp.

Several of the leading banks based in Miami-Dade, Broward and Palm Beach counties boosted real estate loan volume through acquisitions. But some also see favorable market conditions in the region for organic growth in real estate lending.

From January through June, 11 of the 15 largest South Florida banks expanded their real estate loans outstanding, including construction and land development loans and residential, commercial and multifamily mortgages.

The largest increase reported was at Weston-based Florida Community Bank, whose loans rose to $2.4 billion from about $1.6 billion, a 55 percent jump. The gain included $596 million in real estate loans stemming from Florida Community’s Jan. 31 acquisition of Great Florida Bank of Coral Gables.

Stonegate Bank of Fort Lauderdale recorded a 54.5 percent increase in real estate loans to more than $1 billion as of June 30, up from $672.8 million at the end of 2013. The increase reflected its Jan. 16 acquisition of Florida Shores Bancorp and its two subsidiary banks, which added $555 million to Stonegate’s loans and other assets.

During the spring, Miami-based Capital Bank, which operates in Florida, Tennessee and the Carolinas, purchased $46 million of residential mortgage loans to Florida borrowers with an average loan-to-value ratio of 63 percent, helping to lift the five-year-old bank’s total loans outstanding to $4.7 billion.

“This is the first portfolio we’ve purchased since forming the bank, but we intend to continue looking at additional opportunities,” said Chris Marshall, Capital’s chief financial officer, during last month’s quarterly earnings conference call. “Even without the portfolio purchase, Florida’s [loan] production increased nicely from the first quarter.”

Eugene Taylor, Capital’s chairman and CEO, said during the call that business conditions in Southeastern markets like Miami “offer some of the best growth prospects in the United States.”

Miami Lakes-based BankUnited fattened its real estate loan portfolio in the first six months of the year by 16.5 percent to $7.16 billion from $6.14 billion.

During BankUnited’s quarterly conference call last month, the bank’s Florida president, Thomas M. Cornish, cited the Brickell area of Miami as a rejuvenated hot spot for real estate developers, who are making greater use of cash than borrowed money to fund their projects.

“We are extremely familiar with all of the developers in that area and what’s going on, and I can tell you that Florida is back,” Cornish said, “there is significantly less leverage in this market than was here in 2004 and 2005 and 2006. So, we think it is a healthier return to this level” of development.

John Kanas, BankUnited’s chairman, president and CEO, said during the call that overall business conditions are robust in the bank’s two main markets: New York and South Florida.

“We continue to enjoy the business climate in our two primary markets,” Kanas said. “We see no abatement in the growth of both these markets.”

The 15 largest banks based in South Florida expanded their construction and land development loans in the January-June period by an average of nearly 15 percent, the fastest growth rate among the major real estate loan categories.

Leading the growth in the segment was Construction and land development loans grew Boca Raton-based 1st United Bank of Boca Raton, with a 61 percent jump. Coral Gables-based Mercantil Commercebank posted a 45.6 percent gain, City National Bank of Florida a 25.9 percent jump and BankUnited a 23.8 percent increase.

Commercial real estate loans represented the second-fastest-growing category of real estate loans in the first half of the year.

Thirteen of the 15 banks surveyed added to their portfolios during the January-June period. Among all 15 banks, growth in the category averaged 12.3. The leaders were Florida Community Bank, with a 46.4 percent gain, Stonegate Bank, with a 46.3 percent jump, BankUnited, with 25.6 percent growth and Miami-based Helm Bank USA with 18.2 percent.

Residential mortgages increased in the first half by an average of 11.5 percent at the 15 largest banks. Residential mortgage volume increased fastest during the period at Stonegate Bank (80.7 percent) and Florida Community Bank (76 percent).

Loans secured by multifamily dwellings were the slowest-growing category of real estate loans. They grew by an average of 6.7 percent during the six-month period at the 15 banks surveyed.

Multifamily loans outstanding increased at eight of the 15 banks in the first half of the year, including a 45.3 percent increase at Florida Community Bank, 31.5 percent increase at Stonegate Bank, 28.5 percent increase at Helm Bank USA and an 18.6 percent increase at Mercantil Commercebank.

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