Third Quarter 2010 Eighth District States Bank Performance

Compiled by Daigo Gubo

  • Profitability among banks in Eighth District states is up from a year ago but it may have reached a near-term plateau.
  • Net interest margins continue to expand, a welcome boost to earnings.
  • Provision expenses have come down but it is too early to determine if this is part of a broader trend.
  • Nonperforming loans continue to move upward contrary to the larger national trend.
  • The growth in other real estate assets held on bank balance sheets appears to be increasing.

Eighth District States Bank Data1

  2009: 3Q 2010: 2Q 2010: 3Q
Return on Average Assets2
All Eighth District States –0.05% 0.40% 0.47%
Arkansas Banks 0.63 0.78 0.87
Illinois Banks –0.37 0.20 0.35
Indiana Banks 0.01 0.40 0.49
Kentucky Banks 0.75 0.96 0.92
Mississippi Banks 0.45 0.52 0.59
Missouri Banks –0.32 0.24 0.30
Tennessee Banks –0.39 0.31 0.22
Net Interest Margin
All Eighth District States 3.54 3.72 3.76
Arkansas Banks 4.00 4.07 4.13
Illinois Banks 3.27 3.61 3.65
Indiana Banks 3.75 3.75 3.77
Kentucky Banks 3.91 4.09 4.04
Mississippi Banks 3.85 3.87 3.89
Missouri Banks 3.33 3.41 3.51
Tennessee Banks 3.57 3.77 3.79
Loan Loss Provision Ratio
All Eighth District States 1.22 0.94 0.92
Arkansas Banks 0.83 0.75 0.72
Illinois Banks 1.57 1.23 1.18
Indiana Banks 1.15 0.94 0.90
Kentucky Banks 0.52 0.54 0.53
Mississippi Banks 0.77 0.79 0.82
Missouri Banks 1.41 0.92 0.86
Tennessee Banks 1.18 0.82 0.89
Nonperforming Loans Ratio3
All Eighth District States 3.54 3.79 3.88
Arkansas Banks 2.36 2.92 3.27
Illinois Banks 5.19 5.19 5.06
Indiana Banks 2.92 3.21 3.13
Kentucky Banks 2.10 2.43 2.49
Mississippi Banks 1.91 2.77 3.13
Missouri Banks 3.49 3.76 3.96
Tennessee Banks 2.69 3.11 3.43
Nonperforming Loans Ratio4
All Eighth District States 4.56 5.17 5.38
Arkansas Banks 3.60 4.49 5.05
Illinois Banks 6.20 6.51 6.48
Indiana Banks 3.36 3.80 3.81
Kentucky Banks 2.76 3.43 3.55
Mississippi Banks 2.88 4.05 4.55
Missouri Banks 4.83 5.62 5.98
Tennessee Banks 3.88 4.88 5.31

SOURCE: Reports of Condition and Income for Insured Commercial Banks

NOTES:

  1. Since all District banks but one have assets of less than $15 billion, banks larger than $15 billion have been excluded from the analysis.
  2. All earnings ratios are annualized and use year-to-date average assets or average earning assets in the denominator.
  3. Nonperforming loans are those 90 days or more past due or in nonaccrual status.
  4. Nonperforming loans plus OREO are those 90 days past due or in nonaccrual status or other real estate owned
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