The Real Deal Miami

Bad construction loans prove fatal for Bank of Florida

June 01, 2010 04:15PM

The Bank of Florida – Southeast, one of three subsidiaries of the Naples-based Bank of Florida Corp., failed on Friday, largely because too many construction, development and commercial real estate loans blew up in its face, according to the South Florida Business Journal. As of March 31, Bank of Florida – Southeast had $63.3 million in late or unpaid loans, representing a
little more than 15 percent of its total loans. During the past year, seven Bank of Florida – Southeast foreclosure actions in local courts totaled a little more than $47 million. The resulting loan write-downs caused massive losses at the bank. With EverBank’s assumption of Bank of Florida – Southeast’s assets, the Jacksonville-based bank would absorb 20 percent of the losses on the bad loans, while the Federal Deposit Insurance Corp. would eat the remaining 80 percent. The FDIC estimated that the loss of the Fort Lauderdale-based bank would cost their organization $71.4 million [South Florida Business Journal]