With just four statewide failures last year, Arizona's banking industry is on the road to recovery, a new report indicates.
Arizona-based banks lost a cumulative $68 million in 2010, but that was down from $416 million in red ink for 2009, the Federal Deposit Insurance Corp. said.
Also, the picture for non-current loans and non-performing assets brightened, and equity capital stabilized. Plus, Arizona's banks earned a higher spread between what they collect and pay in interest, and the percentage of unprofitable institutions decreased.
Banks across the nation had an even better year, achieving a three-year profit high of $87.5 billion, including $21.7 billion in the fourth quarter, helped by lower provisions for loan losses and improvements in loan quality.
That compared with a national banking profit of $12.5 billion in 2009.
"Overall, 2010 was a turnaround year, with four straight quarters of positive earnings," FDIC Chairman Sheila Bair said in a statement.
She cited rising industry profits and a growing percentage of banks participating in that trend.
Paul Hickman, president and chief executive officer of the Arizona Bankers Association, said the state's industry is improving in terms of loan losses, deposits and other measures.
"It's not looking like 2006, but things are getting better," Hickman said.
Four Arizona banks failed in 2010: Desert Hills, Towne Bank, First Arizona Savings and Copper Star.
That left Arizona with 40 locally based institutions, the FDIC said.
Arizona bank assets, largely consisting of loans, fell to $13.8 billion from $15 billion for the year, deposits dipped to $11.5 billion from $12.4 billion, and the employee count slipped to 3,654 from 3,980.
These numbers don't include the big national and regional players such as Wells Fargo, Chase and Bank of America, which dominate in terms of assets, deposits, employees and other measures but are based elsewhere.
One Arizona institution, Legacy Bank, has failed so far in 2011.
For 2010, the nation suffered 157 bank failures. But just 30 failed in the fourth quarter, prompting the FDIC to predict the worst is behind.
"We believe that the number of failures peaked in 2010, and we expect both the number and total assets of this year's failures to be lower," Bair said.
However, the number of banks on the FDIC's problem list continues to rise.
The agency doesn't identify those institutions.
Despite progress, Arizona's industry of smaller community banks is a shadow of its former self, prompting concerns about competition and local investment.
"The big banks, the ones everyone is going to, are sucking money out of the state," said Ernest Garfield of Interstate Bank Developers, a Scottsdale firm that helps small banks get started.
The effect, he said, is to remove deposits and other assets from Arizona that could be used for local investments and economic development.
Over the past two years, the number of Arizona-based banks has declined 30 percent, with jobs down 15 percent, loans and other assets down 15 percent, capital off 19 percent, and deposits down 8 percent.
by Russ Wiles The Arizona Republic Feb. 25, 2011 12:00 AM
Arizona's banking industry improves
Reuters: Business News
National Commercial Real Estate News From CoStar Group
Latest stock market news from Wall Street - CNNMoney.com
- ► 2018 (59)
- ► 2017 (81)
- ► 2016 (145)
- ► 2015 (146)
- ► 2014 (102)
- ► 2013 (395)
- ► 2012 (392)
- Low-wage jobs lead economic recovery
- Tips for transferring a credit-card balance
- Sectors spar over fee cap on debit use
- Gilbert land buy facing scrutiny
- Fannie, Freddie post losses
- Sluggish new-home sales a drag on nation's growth
- Arizona's banking industry improves
- Maricopa County home valuations fall 11%
- Investors snap up foreclosure bargains
- Number of troubled banks rising
- Trustee-sale date set for resort
- Cash Buyers and Qualified Investors Prop Home Sale...
- Fannie and Freddie: The Saga in Charts. - MarketBe...
- Obama Administration Proposes Fannie Mae, Freddie ...
- METALS-Copper posts big gain as energy prices stab...
- Market Commentary 02/24/11
- New Mortgage-Backed Securities Will 'Be Better:" L...
- Homebuilder stocks plunge after home price report ...
- Consumer credit-card gains touted
- Centerpoint project sold; summer debut planned
- Market Recap - week ending 02/18/11
- Tax Liens - Tax Lien Certificates
- Statute of Limitations on Debts
- Global Economy - G20 sceptics wait for shift in be...
- Market upswing greeted by indifference
- Yahoo! Finance - Financially Fit
- Shanghai, Guangzhou Limit Home Buying After China ...
- Bernanke calls for nations to rebalance gaps in tr...
- 10 steps to a brighter financial future
- Robb & Stucky files for Ch. 11
- Fed may reconsider plan to limit debit-card fees
- Arizona's economy on the rise, expert says
- Group OKs $34 million loan to build CityScape hote...
- Goodyear targets 2014 for mall
- Number of foreclosures in Valley rose in January
- Are Home Sales Worse Than They Look? - Investors.c...
- German rival buys New York Stock Exchange
- Arizonans receiving little help from mortgage prog...
- Phoenix-area bankruptcy outlook improves
- Equator launches three new modules for REO, short ...
- Market Commentary 02.15.11
- Market Commentary 02.14.11
- Living Room Ready for Liftoff - Yahoo! Real Estate...
- Websites explain job-hunt expenses that can be tax...
- Arizona Center marketed for sale
- Desert Mountain Golf Club bought by members for $7...
- Obama Calls For End Of Fannie Mae, Freddie Mac
- Social Security recipients need to act now!
- Gray defaults on state land
- Scottsdale council OK next step for revised Blue S...
- 3 mortgage-crisis strategies
- Expert: Median price of houses could dip to $100,0...
- Taxes lower than under Bush
- Tips: Get your tax paperwork in order
- SEC brings fraud charges against three former Indy...
- Buyers See Mortgage Rates Jump Above 5%
- Xtranormal | Bankster v. Deadbeat Debate
- YouTube - Bank Bailouts Explained
- Executive Decision: Bank of America
- 12 current bills would impact HOA rules
- Tax rules put burden on landlords
- Mortgage webinar repeats
- FHA Announces Appraisal Guideline Changes, Elimina...
- Plan for luxury apartment complex clears first hur...
- Jobless rate fell to 9% in January
- Phoenix-area homeowners get loan help from non-pro...
- Moody's Looks at Implications of GSE Reform. Sees ...
- Meritage Homes posts $7.2 million profit
- Biltmore owners file bankruptcy
- 1 market benefits from medical pot
- First GM, now states? Pros and cons of bankruptcy
- Canadian Banks May Buy SunTrust, Zions in ‘Fire Sa...
- 2nd UPDATE: TD Bank Confirms $6.3B Chrysler Financ...
- Bank of Montreal buys M&I for $4.1B
- Three First Community Bank branches in Arizona are...
- Arizona Cardinals owners buy Tom's Tavern
- Law guards renters amid foreclosure
- Keep goals on money a bit vague
- Restraint still key in uneven economy
- Foreclosure losses picked up by taxpayers, investo...
- Phoenix-area real-estate market may face new reali...
- Cavco seeking to buy Palm Harbor
- Energy-saving pledge featured by Shea Homes
- Phoenix-area housing recovery pushed back again as...
- U.S. financial crisis fueled from negligence, risk...
- Fed: Bond purchasing still vital for economy
- Ariz. business leaders liked Obama's focus
- Phoenix-area housing prices at new low
- Scottsdale lowers height of Waterfront buildings
- Liable for equity balance
- Leaders gauge economic 'new reality'
- Borrowers Bill of Rights proposed in Legislature
- Westcor, hospital in talks to build medical facili...
- Market Recap - Week ending January 28, 2011
- ▼ February (94)