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Coffee Talk
Business Observer Thursday, Aug. 20, 2009 13 years ago

Another bank a victim of economy

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The scramble for capital playing out inside the boardroom of TIB in Naples (see item above) is becoming a common occurrence on the Gulf Coast these days.

The scramble for capital playing out inside the boardroom of TIB in Naples (see item above) is becoming a common occurrence on the Gulf Coast these days.

And in the case of Englewood-based Peninsula Bank, the capital-raising challenges might have caused its longtime chief executive and chairman, Simon Portnoy, to leave the bank. Officially, the bank says Portnoy retired as of June 30.

But Coffee Talk hears from several bankers that Portnoy's departure was hastened by the bank's recent performance and capital shortfalls — an assertion the bank denies. “I'm not aware of that,” says Sharon Rubin, an executive vice president at Peninsula. “I don't believe that is the case.”

Rubin does confirm the obvious: The 23-year-old bank, with offices on both Florida coasts, is at a crisis point.

It reported a net loss of $12.9 million in the second quarter, compared with a $3.1 million loss in the second quarter of 2008. Even worse for the bank, it recently undertook an in-depth review of its loan portfolio that resulted in a one-
time, pre-tax charge totaling $19.8 million.

For a bank with $638 million in total assets as of June 30, that's a big quarterly loss. And its total risk-based capital ratio of just under 7% is considered to be under federal regulators' threshold for a well-capitalized bank.

Peninsula Bank co-founder Carlo LoRicco, who is taking over as board chairman from Portnoy, says the bank is being as aggressive as any other Gulf Coast lender in trying to reverse its fate. Internally, that means the bank recently recorded a greater loan-loss provision and accelerated charge-offs of its problem assets, among other steps, LoRicco says in a statement.

Externally, the bank has hired a pair of investment banking firms to help it raise money. It's also hoping to sell $50 million in underperforming assets by the end of the year to outside borrowers.

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