FDIC report: Banks in Kansas, U.S. see improved profits in 2012

02/26/2013 10:16 AM

02/26/2013 11:24 PM

Kansas banks and thrifts insured by the Federal Deposit Insurance Corp. increased their total net income nearly 20 percent between 2011and 2012

That’s according to the FDIC’s State Banking Performance Summary, released Tuesday.

The report said net income rose to $535 million in 2012, compared to $447 million in 2011.

It also said total loans and leases increased more than 3 percent to $35.1 billion.

The percent of unprofitable institutions fell to its lowest level in three years, to 5 percent, the report said.

The report includes totals from 300 banks and thrifts in Kansas whose deposits are insured by the FDIC. The number of institutions is down from 318 in 2011 and 326 in 2010.

Not only is bank net income climbing, so is profitability, according to the report.

In 2012, aggregate pre-tax return on assets – which shows how much a bank earns on every $100 in assets before taxes – was 1.05 percent. That compares with aggregate pre-tax ROA of 0.89 percent in 2011 and 0.65 percent in 2010.

While the performance measures show marked improvement over the last few years, they are still below what they were in 2007, before the recession took hold in Kansas.

“It will literally take years to get back to those levels,” said Shawn Mitchell, president and CEO of the Community Bankers Association of Kansas. “There’s going to be a lag time before you start getting back to those pre-’08 numbers.”

For instance, aggregate pre-tax-ROA in 2007 was 1.46 percent, and aggregate net income that year was $679 million, according to FDIC data.

Still, Mitchell said, he is encouraged by the consistently improving performance measures.

“Most of the numbers … are doing what they should be doing,” he said.

Nationally, banks reported a 19 percent increase in aggregate net income for the year, to $141.3 billion. And the aggregate pre-tax ROA was 1.42 percent, up from 1.25 percent in 2011.

“The improving trend that began more than three years ago gained further ground in the fourth quarter,” Martin Gruenberg, FDIC chairman, said in a news release. “Balances of troubled loans declined, earnings rose from a year ago, and more institutions of all sizes showed improved performance.”

The FDIC also said the number of institutions on its “Problem List” — the names of which it does not disclose — fell to 651 in 2012 from 813 in 2011.

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