fedgazette Roundup (2011-2015)

District bank conditions stabilizing

Ronald A. Wirtz | Editor, fedgazette | @RonWirtz

Published February 24, 2011

Banks in the Ninth District are still working through some rough spots, but are slowly improving their overall position, according to performance benchmarks recently released by the Federal Reserve Bank of Minneapolis.

The indicators reflect a wide variety of bank performance metrics—including asset quality, earnings, capital and liquidity—that offer a broad view of overall health among the roughly 700 unique banks in the Ninth District. The benchmarks are tracked back to the 1980s, which allows users to see how current conditions compare to the last banking crisis during that decade.

The latest figures, which are updated quarterly, suggest that asset quality is still down, but has stabilized. The number of banks with negative earnings dropped in 2010 compared with a year earlier, but remains elevated. The number of banks with deteriorated ratings from regulatory agencies (including the Federal Reserve) also remains higher than normal. But the large majority of banks are still considered healthy, and bank failures were down last year.

A video summary of the latest benchmark data, as well as an outlook on banking is also available featuring Ron Feldman, senior vice president for supervision, regulation and credit.