Profits were up year-over-year at six of the eight banks headquartered in the Tampa-St. Petersburg metro area, including a dramatic turnaround that put Pilot Bank back in the black.
Loan portfolios grew at seven of the banks, mostly by double-digit percentages.
Increases in loan portfolios are an indication that banks are making credit available, primarily to the small-and-medium size businesses that largely rely on community banks. Those businesses often borrow to expand their operations, buy equipment or real estate, or hire workers.
Banks with a healthy bottom line can focus more on external operations, such as making loans available, and not be internally focused on fixing problems.
Factors such as tax reform and interest rate increases were expected to help boost bank earnings last year across the board, according to a report from S&P Global Market Intelligence. Regulatory relief was expected to lead to ramped-up competition for loans, which could eventually cause some underwriting standards to slip, the report warned.
Pilot, a Tampa-based bank that opened its first office in St. Petersburg last year, had nearly $1.6 million in net income for 2018, according to a call report filed with the Federal Financial Institutions Examination Council.
In 2017, the bank recorded a $1.2 million loss as the result of corporate tax reform, said Roy Hellwege, chairman and CEO. Pilot took a non-cash charge of $2.2 million in 2017; without that charge, the bank would have had about $1 million in net income last year.
The significant improvement in 2018 was due to strong loan growth for both commercial loans and for aircraft loans, Hellwege said. Pilot provides aircraft financing through its affiliate, National Aircraft Finance Co.
The bank also made great strides in its Small Business Administration lending program in the fourth quarter of 2018, Hellwege said. “We expect this line of business to be a further driver of profitability in [fiscal year] 2019,” he said.
The only bank to post a net loss for 2018 was First Home Bank. “We recorded a one-time charge in association with the bulk disposition of certain assets. The loss was not reflective of our operations which remain profitable,” said Anthony Leo, CEO of First Home Bank, which moved its headquarters to St. Petersburg from Seminole in November.
Flagship Community Bank in Clearwater reported a nearly 47 percent jump in net income, bolstered by a termination fee received when a deal for Flagship to buy BankMobile from Customers Bancorp Inc. (NYSE: CUBI) fell apart.
The two largest banks headquartered in the area also reported jumps in income and loans.
Raymond James Bank, part of Raymond James Financial Inc. (NYSE: RJF) in St. Petersburg, posted $362 million in 2018 net income, up 39.4 percent from 2017, while the loan portfolio grew 11.8 percent, to $19.8 billion.
CenterState Bank (NASDAQ: CSFL), based in Winter Haven, saw net income jump 166 percent, to $155.7 million for 2018, while the loan portfolio swelled 74.4 percent to $8.3 billion as of Dec. 31. CenterState closed three acquisitions in 2018, buying HCBF Holding and pushing deeper in Pinellas County, as well as buying Sunshine Bancorp and Charter Financial. The Charter acquisition gave CenterState its first retail offices outside Florida.
Raymond James, with $25.1 billion in total assets, and CenterState, with $12.3 billion in total assets, are much larger than other banks headquartered in the Tampa Bay area. The Bank of Tampa is the only other area bank to have more than $1 billion in assets, with $1.6 billion in assets as of Dec. 31.