Florida’s financial industry struggled with problem loans and mounting losses in the third quarter.
The state’s 275 commercial banks had a combined loss of $151 million in the three months ended Sept. 30, and have lost $159 million in the first nine months of 2008, a report from the Federal Deposit Insurance Corp. said.
It’s a dramatic turnaround from a year earlier. In the third quarter of 2007, 278 commercial banks in Florida had combined net income of $138 million. They earned a combined $631 million in the first nine months of 2007, the FDIC said.
Florida’s 36 savings institutions posted steeper declines, with a combined $408 million in losses in the third quarter of 2008 and $568 million in losses year to date. In the third quarter of 2007, 37 savings institutions lost a combined $13 million, but they were in the black for the first nine months of the year, with a combined $79 million in net income.
Nationally, commercial banks and savings institutions reported net income of $1.7 billion in the third quarter of 2008, a decline of $27 billion, or 94 percent, from the $28.7 billion that industry earned in the third quarter of 2007, the FDIC said in a release.
The FDIC cited higher provisions for loan losses for the drop in industry profits. Loss provisions totaled $50.5 billion nationally, compared to $16.8 billion in the third quarter of 2007, the release said.
Charge-offs, or loans removed from banks’ balance sheets because they were uncollectible, rose in the third quarter, as did noncurrent loans , or loans 90 days or more past due or not accruing interest, the FDIC said.
Nationally, 2.31 percent of all loans were noncurrent at the end of the third quarter, the highest level for the industry since the third quarter of 1993.
Among Florida’s commercial banks, noncurrent loans made up 4.12 percent of all loans as of Sept. 30. Noncurrent loans were 5.19 percent of all loans at Florida savings institutions on Sept. 30, the FDIC said.
The FDIC also said its problem list of troubled institutions grew during the quarter from 117 to 171 institutions, the largest number since the end of 1995. The FDIC does not identify institutions on the problem list.
source: South Florida Business Journal
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