Banks in Arizona, U.S. report improved results for 1st quarter

by Russ Wiles The Arizona Republic May. 21, 2010 12:00 AM

Banks in Arizona and around the nation reported better financial results in the first quarter, helped by easing pressures from loan losses.

The percentage of unprofitable Arizona banks declined to 56 percent in the most recent quarter from 74 percent one year earlier, according to the Federal Deposit Insurance Corp.

Nationally, commercial banks and saving institutions insured by the FDIC reported an aggregate profit of $18 billion, up from $5.6 billion in the first quarter of 2009.

"A number of key indicators are trending in the right direction," said Tanya Wheeless, chief executive officer of the Arizona Bankers Association.

She called this the first recent quarter during which Arizona banks have started to recover.

"We saw improvement at the national level last quarter, when we didn't see anything happening in Arizona," she said.

Some 52 percent of banks nationally reported year-over-year improvements in quarterly net income. Fewer than 19 percent posted losses during the quarter, down from 22 percent a year earlier.

Average returns on assets improved nationally and in Arizona, driven mainly by a reduction in provisions for loan losses.

Nationally, troubled loans continued to rise, but at a slower pace. Some 5.45 percent of loans and leases were 90 days or more past due at the end of the first quarter.

Banks and thrifts in the U.S. charged off $52.4 billion in uncollectible loans during the quarter, up from $37.9 billion a year earlier, but less than the $53.6 billion charged off in the fourth quarter of 2009.

The FDIC said the number of problem banks rose to 775 from 702 at the end of 2009. The agency doesn't reveal the names of those banks. That's the highest level since June 1993, but the increase in the number of problem banks was the smallest in four quarters.


Banks in Arizona, U.S. report improved results for 1st quarter