Florida Capital Bank resumed losses after mortgage refinancing slowed (peaked 4Q12). It lost $2 million in 1Q13 and $2.2 million in 2Q2013.
For a bank with $29 million in equity and $8 million ALLL, troubled asset is huge. NAL was $22 million and OREO was $20 million. This indicates loose lending in earlier years.
It could have been in more serious doodle if mortgage income was not so strong in the past couple of years. Now that mortgage income is half way gone. The transition to interest income is very urgent. It's main weakness is the lack of loans. Loan to asset is around 40%. This, however may be its strength going forward. As loan demand pick up (we've been waiting forever...) and that loan yield start to rise. Before then, loss may continue.
(It's not entire clear if ALLL is adequate, even though charge offs slowed this year.)
Why Martin buy BKBK is curious. I thought for sure Florida Capital may need to shore up the its capital. BKBK is not in growth are except Baton Rouge, nowhere as attractive as Jacksonville, FL.Puzzling indeed.