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KBRA Affirms Ratings for BAC Florida Bank and Revises Outlook to Positive

NEW YORK (April 11, 2019) – Kroll Bond Rating Agency (KBRA) affirms the deposit and senior unsecured ratings of BBB, subordinated debt rating of BBB-, and short-term debt and deposit ratings of K3 for Coral Gables, Florida based BAC Florida Bank (“BFB” or “the Bank”). The Outlook for all long-term ratings has been revised to Positive from Stable.

The Positive Outlook for the Bank’s long-term ratings reflects the steady improvements in financial metrics correlating with a sound strategic plan to increase earnings with greater revenue and loan diversification. Furthermore, BFB has consistently maintained low credit costs while reducing NPA levels to be more in line with KBRA higher rated banks. The ratings of BAC Florida Bank are supported by its sound risk management practices and expertise in trade finance as well as the Central and South American markets, enabling the Bank to navigate the volatile economic environments of these nations. Additionally, BFB has robust regulatory capital measures and operates an efficient bank model. Counter-balancing the ratings is BFB’s significant concentration in residential real estate, largely within the South Florida market, as well as its somewhat limited deposit franchise. Moreover, BFB has historically had a comparatively weak earnings profile, though with notable improvements, in part due to an asset sensitive balance sheet providing a marked rise in average loan yields, as well as steady growth in fee revenues. Furthermore, in KBRA’s view, the health and stability of the regions in which BFB operates is considered unsettled. The ratings assume continued discipline with risk management practices to help mitigate the risks associated with the Bank’s business model.

The ratings are based on KBRA’s Global Bank and Bank Holding Company RatingMethodologypublished on February 19, 2016.

To view the report, click here.

Analytical Contacts:

Jason Szelc, Director (301) 969-3174

jszelc@kbra.com

Thomas Curley, Associate (301) 969-3245

tcurley@kbra.com

Ian Jaffe, Managing Director (646) 731-3302

ijaffe@kbra.com

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KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.