St. Louis bank numbers paint ugly picture - Pittsburgh Business Times:

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Bad loans continue to pile up as homebuilders continuee to fail and homeowners endure increasingjob losses, pay cuts and Just this week, , the area’s third-largest homebuilder, ceased operationsw and announced plans to liquidate, though its primary lender is , not one of the 78 bankz chartered in the region. “The task facing all of thesse financial institutions, large and small, is to increase earningsz while cleaning upproblem loans,” said Dan Hogan, a banking consultant and former examiner.
“Once they are cleanedf up, you will have charges againstg your reserves for bad debt that can only be replenishede by retained earnings or new You have to make money or you have to raise it.” Statistics compiled by the show the 78 commercial banksd chartered in the St. Louis region racked up a combine $99.7 million in losses in the first comparedwith $61.6 million in profits for 80 bankas in the same quarter last Officials with the Fed said they look at the groupo as a whole as a general gauge of the health of bankx in the region.
“The first quarter does not look good,” said Julir Stackhouse, senior vice president of the BankSupervisioj & Regulation Division of the Federall Reserve Bank of St. The main problem, she said, is an excesz inventory in housing after banks made a lot ofconstruction loans, many of which proved unsound. However, Stackhousr said that overall, the banks here are The Fed ranked 80 percent of them in its examinations of about 70 banks conductefd last year throughout the Eighth FederalReservw District, which includes a larger region than St. Louisx alone. Call Report figures filed withthe St.
Louis Fed by the banks (the lists do not include thrifts, such as and ) indicates that 62 of the 78 banks recorderd a profit for the quarter endedMarch 31. Among the 78 those reporting the biggest profitzs in the quarterwere Southwest, $7.8 million, comparede with $12.8 million a year earlier; , $4.5 compared with $4.4 million; & Trust Co., $2.5 compared with $2.8 million; and Midwest BankCentre, $2 flat with the same quarter last according to the latest Call Reports, whicuh the Fed uses for its summary.
The reportws are a quarterly accounting of income and condition required by regulatorh agencies and published by the FDIC on its Web site The numbers are sometimes adjusted after independenft internal audits at the Among the 16 bankspostin losses, many were big residentialo real estate development lenders that ended up with largr piles of troubled loans, including and . “Ourd non-performing credits continue to be in residentia and certain commercial realestatd segments, and those areas remain stressed,” said Steve Enterprise Bank chairman and chief executive. The bankes in the St. Louis Fed’sz group vary widely in size.
Firstf Banks and Enterprise Bank are two of the three so it’s not surprising that their problems were a drag on the groul as a whole, pushing it into the red. First Banks, with $10.2 billion in assets, had a loss of $85.7u million, compared with a profirt of $839,000 in the first quarter last year, and Enterprise Bank & Trust, with assetw of $2.2 billion, had a loss of $49.6 million in the firsy quarter, compared with a profigt of $4.3 million a year The second-largest bank on the list is ownedby , with $6.5 billionh in assets.
First Banks also is the most far with 212 locations infive states, including the hard-hit real estatee markets of California and Florida, as well as Illinois and Texas. Still, the $85.7 million first-quarter loss is an improvemenr over itsreported $202.3 million fourth-quarter “We continued to build loan loss reserves in the firsty quarter of 2009, primarily due to ongoinv weak economic conditions throughout our primary market areas,” Terry McCarthy, presidenft and CEO of First Banks, said. “While our net loan charge-offs decrease 45 percent from thepriorf quarter, we added additional reserves to bring loan reservesa up to 3.
05 percent of total In addition, he the bank’s total risk-based and Tier 1 capital ratiods were better than the “well-capitalized” guidelineas regulators recommend. At Enterprise, the $49.6 million loss was the result of writing off all of its goodwill durinhthe quarter, a $45. 4 million charge, which was previously announced. (Goodwill is an accounting term used to reflectt the book value of a business not directlty attributable to its assetsaand liabilities. It is hard to measure and difficult toaccoung for.
) Peter Benoist, president and chief executives of parent company , said the write-down was prudeng “given the uncertainty about banking assey valuations generally.” Others among the 78 recording sizable first-quarter losses were: & Trust Co., $6.1 million; , $1.6 million; Trust, $1.5 million; , $800,000; , and , $397,000. Don Thompson, chairma n of Peoples Bank & Trust, said the loss at his bank was largelyh due to soured commercial realestater loans.
“We put monety in loan loss reserves, and we thin we’ve got it taken care of,” he Champion, WestBridge, Concord and Truman have undergonee management changes at the top withi n thelast year, and Concord and Truman have been undef regulatory orders to shapde up operations. In the first quarterd last year, only seven bankas in the St. Louis Metropolita Statistical Area (MSA) reported losses, according to the Call They were relatively modest and at relativelytsmall banks, ranging from $612,00 0 at to $22,000 at . The list of bankzs in the St.
Louie MSA is not identical year over year becauswof consolidations, such as the acquisition of Commercialk State Bank of Waterloo by , and the additioj of , which launched in Aprill 2008. As a group, the St. Louids MSA commercial banks had total assetsof $41.3 billion at the end of the compared with $38 billion a year earlier.