JUPITER, Florida (January 10, 2011) — On Friday, regulators closed two banks: First Commercial Bank of Florida, Orlando, Florida and Legacy Bank, Scottsdale, Arizona. This represents the first two banks to fail in 2011.
First Commercial Bank of Florida based in Orlando, Florida with assets of just over $598 million at September 30, 2010 had been rated E- (“Very Weak”) for the last two quarters by Weiss Ratings and was first identified as “Weak” in January 2009 based on third quarter 2008 data. The bank reported a loss of more than $27 million through September 30, 2010. First Commercial had below-FDIC-mandated Tier 1 (5%) and Risk-Based Capital (6%) ratios of -1.60% and -2.13%, respectively. Nonperforming loans made up 10% of its loan portfolio.
Legacy Bank located in Scottsdale, Arizona with assets of $150.6 million as of September 30, 2010 had been rated E- (“Very Weak”) for the last previous seven quarters by Weiss Ratings and was first identified as “Weak” in March 2009 based on fourth quarter 2008 data. The bank reported a loss of $3.5 million through September 30, 2010. Legacy had weakening capital ratios that were well below FDIC-acceptable levels and well below its peers with Tier 1 Capital at 2.02% and Risk-Based Capital of 4.01% through the third quarter of 2010. Nonperforming loans represented more than 6% of its loan portfolio with charge offs at 3.59% of average loans for the quarter ended September 30, 2010.
Weiss Ratings, the nation’s independent provider of bank and insurance company ratings, accepts no payments for its ratings from rated institutions. It also distributes independent ratings on the shares of thousands of publicly traded companies, mutual funds, closed-end funds and ETFs.
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