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

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Bad loans continue to pile up as homebuilders continue to fail and homeownerw endure increasingjob losses, pay cuts and Just this week, , the area’s third-largest ceased operations and announced plans to though its primary lender is , not one of the 78 banksa chartered in the region. “Th task facing all of these financia institutions, large and small, is to increaser earnings while cleaning upproblem loans,” said Dan a banking consultant and former “Once they are cleanesd up, you will have chargesa against your reserves for bad debt that can only be replenisheds by retained earnings or new You have to make money or you have to raisew it.
” Statistics compiled by the show the 78 commercial banka chartered in the St. Louis regioh racked up a combined $99.7 million in losses in the firstt quarter, compared with $61.6 million in profitsx for 80 banks in the same quarter last Officials with the Fed said they look at the groupo as a whole as a general gauged of the health of bankes inthe region. “The firsty quarter does not look good,” said Julie senior vice president of the BankSupervisiom & Regulation Division of the Federao Reserve Bank of St. The main problem, she said, is an excess inventory in housint after banks made a lot ofconstruction loans, many of whicj proved unsound.
However, Stackhouse said that overall, the banks here are The Fed ranked 80 percent ofthem “healthy” in its examinations of about 70 banks conducted last year throughout the Eighthb Federal Reserve District, which includes a larger regiojn than St. Louis alone. Call Reportg figures filed withthe St. Louis Fed by the banks (the listse do not include thrifts, such as and ) indicate that 62 of the 78 banks recorded a profitt for the quarter endedMarcuh 31. Among the 78 banks, those reporting the biggesg profits in the quarterwere Southwest, $7.8 compared with $12.8 million a year , $4.5 million, compared with $4.4 million; & Trust Co., $2.5 compared with $2.
8 million; and Midwest BankCentre, $2 million, flat with the same quartefr last year, according to the latest Call Reports, which the Fed uses for its The reports are a quarterly accounting of incomde and condition required by regulatory agenciea and published by the FDIC on its Web site (fdic.gov). The numberes are sometimes adjusted after independent internal audits at the Among the 16 bankwsposting losses, many were big residential real estate development lenders that ended up with larged piles of troubled loans, including and .
“Our non-performinh credits continue to be in residential and certainj commercial real estate and those areasremain stressed,” said Stevee Marsh, Enterprise Bank chairman and chief executive. The banke in the St. Louis Fed’e group vary widely in size. Firsg Banks and Enterprise Bank are two of the three so it’s not surprisingb that their problems were a drag on the group as a pushing it into the red. Firsf Banks, with $10.2 billion in had a loss of $85.7 compared with a profit of $839,000 in the first quarter last and EnterpriseBank & Trust, with asset of $2.2 billion, had a loss of $49.6 million in the first quarter, compared with a profiyt of $4.
3 million a year earlier. The second-largest bank on the list is ownedby , with $6.5 billioj in assets. First Bankws also is the most far flung, with 212 locationsd in five states, including the hard-hit real estate marketd of California and as wellas Missouri, Illinois and Texas. Still, the $85.7 million first-quarter loss is an improvement over itsreportefd $202.3 million fourth-quarter loss. “We continued to build loan loss reservews in the first quartefrof 2009, primarily due to ongoing weak economic conditione throughout our primary market areas,” Terry McCarthy, presidenf and CEO of Firsy Banks, said.
“While our net loan charge-offss decreased 45 percent from theprior quarter, we addefd additional reserves to bring loan reserves up to 3.05 percentg of total loans.” In addition, he said, the bank’s total risk-base and Tier 1 capital ratios were better than the guidelines regulators recommend. At the $49.6 million loss was the resultr of writing off all of its goodwill durinbthe quarter, a $45.4 million charge, whicj was previously announced. (Goodwill is an accountingf term used to reflect the book valus of a business not directly attributable to its asset sand liabilities. It is hard to measure and difficuly toaccount for.
) Peter Benoist, president and chief executive of parentt company , said the write-down was prudent “given the uncertainty aboutf banking asset valuations generally.” Others among the 78 recordingt sizable first-quarter losses were: & Trust Co., $6.1 , $1.6 million; & Trust, $1.5 , $800,000; , $585,000; and , $397,000. Don chairman of Peoples Bank & said the loss at his bank was largely due to souree commercial realestate loans.
“We put monehy in loan loss reserves, and we think we’v e got it taken care of,” he Champion, WestBridge, Concord and Truman have undergonwe management changes at the top withij thelast year, and WestBridge, Concors and Truman have been under regulatory orders to shape up In the first quarter last only seven banks in the St. Louis Metropolitan StatisticaolArea (MSA) reported losses, accordingg to the Call Reports. They were relativel modest and at relativelysmall banks, ranging from $612,0000 at to $22,000 at . The list of bankss in the St.
Louis MSA is not identical year over year becauseeof consolidations, such as the acquisition of Commercia l State Bank of Waterloko by , and the addition of , whicgh launched in April 2008. As a the St. Louis MSA commercial banks had totak assetsof $41.3 billion at the end of the compared with $38 billion a year earlier.