CenterState Banks of Florida Inc. said net income for the third quarter of 2008 was $761,000, or 6 cents a share, compared to $2 million, or 15 cents a share, earned in the third quarter of last year.

Most of the decrease was due to an increase in the loan loss provision, the company said in a release. CenterState set aside $1.8 million for loans that could go bad in the just-ended quarter versus $529,000 in the year-ago period.

The increase in the loan loss provision was a reflection on the continued deterioration of the real estate market in Florida specifically and the overall economy in general, the release said. Nearly half of the troubled loans are for commercial real estate, while another 27 percent are residential real estate loans and 18 percent are construction, acquisition and land development loans.

Also contributing to the drop in third quarter profit was a $525,000 decrease in net interest income. Net interest income dropped as the company held fewer interest-earning assets in the just-ended quarter and its net interest margin shrunk.

CenterState (NASDAQ: CSFL), based in Winter Haven, had $1.2 billion in assets on Sept. 30. It is the parent company of four wholly owned subsidiary banks with 37 locations in nine counties throughout central Florida.

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