The sluggish real estate market in Miami affects all actors of the real estate market, but the banks in Florida are in a good financial situation. South Florida banks have strong fundamentals, they are well capitalized and have financial reserves to face increasing problems in the sub prime mortgage market.

Foreclosures are increasing in Miami and banks are acknowledging an increasing number of bad loans but nothing is alarming yet. Most analysts and bankers say that Florida institutions learned their past lessons from the 1980's saving and loans debacle.

South Florida has one of the lowest unemployment rates in the US which is a strong positive. A new bank called Bradenton's Credit Bank face real troubles for loans made to a large developer located in northern Florida but will likely survice. Most of other banks in the region are ready. Banks reported high profits during the most recent quarter, and increased their reserves to face tougher times.

Local bankers from Great Florida Bank to Ocean Bank indicated a surge in their bad loans, from a 2% to 4.6% level, but added also that there loan portfolios were well secured. So far the meltdown in the sub prime mortgage market was limited to unregulated brokers and lenders which affects a small number of actors in the local financial market. They mostly stayed away from this kind of lending. They are aware that delinquencies will increase and that profitability will be impacted but they are serene. A large number of local banks stopped lending to condominium buyers and developers more than 2 years ago to anticipate problems.