Banking Industry Increases Rank near Top in U.S

By Titus, Nancy Raiden | THE JOURNAL RECORD, April 27, 1993 | Go to article overview

Banking Industry Increases Rank near Top in U.S


Titus, Nancy Raiden, THE JOURNAL RECORD


By Nancy Raiden Titus

Journal Record Staff Reporter

The Oklahoma banking industry returned with a vengeance in 1992 and ranked among the top 10 in the nation for increases in assets and loans, according to an independent research firm.

The state's 393 banks were 96.7 percent profitable and reported record operating profits for the year of $327 million. That was an increase of 35.7 percent from $241 million in 1991.

Austin-based Sheshunoff Information Services Inc. listed Oklahoma as the state with the fifth highest improvement in asset levels during the year, with an increase of 7.7 percent to $30.4 billion. This compared with assets of $28 billion a year earlier.

The state ranked ninth for its jump in total loans to $13.6 billion, up 6 percent from the $12.9 billion a year earlier. It also had the 10th lowest figure for net charge-offs, with $70 million, a reduction of 11.9 percent from $79.6 million the year earlier.

The state's banks posted a 1.15 percent return on assets, up from 0.88 percent in 1991.

The health of the industry also was seen in the Oklahoma City Metropolitan Statistical Area, where 91 percent of the 68 banks reporting were profitable.

Oklahoma banks had $240.8 million in non-performing loans, a drop of 19.9 percent from the $300.7 million a year earlier.

Banks across the nation posted a record profit of $31.6 billion before extraordinary items during 1992 for a record return on assets of 0.93 percent, according to Sheshunoff.

The total easily eclipsed the previous record profit of $24 billion set in 1988 and represented a 79.9 percent increase from the 1991 profit level of $17.6 billion.

"Since the two main forces driving the record earnings of banks and S Ls in 1992 were widening interest margins and improved asset quality, the key to the industry's continued good health is to focus on making quality loans, while carefully managing the exposure to interest rate risk," said Con Rusling, Sheshunoff president.

"Barring some calamity, 1993 should be another strong year for the industry."

U.S. savings and loans saw a profit of $2.4 billion for the year, despite a fourth-quarter loss of $236 million. This represented the first full-year profit for the savings and loan industry since 1986.

About 94 percent of the nation's 11,450 banks were profitable, reporting earnings of $33.4 billion for 1992. The profits were partially offset by the $1.8 billion in commercial bank losses reported for the period.

Likewise, 89 percent of the nation's 2,148 savings and loans operating during the year were profitable, earning $6.3 billion during 1992. The 11 percent of thrifts that were unprofitable lost $3.9 billion during the period.

The West was the only region where savings and loans reported a combined net loss in 1992, with $1.17 billion in red ink. California thrifts reported the largest net loss in the country, at $1.36 billion.

Almost every state in the nation reported positive earnings for banks. The exceptions were Connecticut, which lost $9.5 million, and Washington, D.C., which lost $2.4 million.

All states showed at least some level of improvement in bottom-line income, except Washington, which suffered a decline of 1.8 percent.

After seven consecutive quarters of decline, total loans and leases held in domestic offices of commercial banks showed their first quarterly uptick _ with an increase of $9.6 billion during the fourth quarter.

This improvement, which brought total domestic office loans and leases to $1.82 trillion, was primarily attributable to fourth quarter increases in various measures of domestic consumer credit, such as home mortgage loans (up $8.6 billion, or 1.9 percent) and consumer loans (up $5.6 billion, or 1.6 percent).

The most significant increase for the quarter, although not the largest, was in domestic commercial loans, which were up $1.

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