The California Department of Financial Institutions has just issued its Quarterly Report. The Quarterly Report presents summary statistics for DFI licensees, which include banks, credit unions, offices of foreign banks and trust companies with a one-year comparison. According to DFI, the situation for commercial banks based on the latest data available is as follows:
For the one-year period ending June 30, 2008, the number of state-chartered banks increased by 5.4% to 216 at the quarter end, compared to 205 a year previous. Assets were up from $214.6 billion to $230.5 billion, an increase of $15.9 billion, or 7.4% over the same period, while loans were up 10.4%, from $152.0 billion to $167.8 billion. Total equity capital decreased $1.0 billion, from $27.9 billion to $26.9 billion at the end of the quarter, causing the equity capital to total asset ratio to decline from 13.00% to 11.69%. Deposit growth did not keep pace with loans, increasing 4.3% to $158.7 billion, which caused the loan to deposit ratio to increase to 105.73% from 99.89% at the close of the Second Quarter 2007.
For the first half of 2008 state-chartered banks reported $406.7 million in losses, off $1.7 billion or 130.9% from the $1.3 billion in net income reported at the close of the Second Quarter 2007. This was due in part to the increase in loan loss provisions, from $163.1 million to $1.2 billion, an increase of 619.6%.
The net interest margin was down from 3.62% to 3.38%. Loan loss reserves were up 68.0% from $309 million at midyear 2007 to $519 million at the close of the current quarter; however, noncurrent loans more than doubled going from $853.8 million to $3.3 billion, which caused reserve coverage of noncurrent loans to decrease from 205.53% to 75.60%. Other real estate owned also more than doubled, going from $43.1 million to $255.3 million.
Additional information is available on the DFI website under the Financial Statistics page and the financial data published by the Federal Reserve Bank, Federal Deposit Insurance Corporation and National Credit Union Administration.
Nina P. Kwan, Esq. is the author of this post and may be contacted at nkwan@lpslaw.com Ms. Kwan counsels business clients and financial institutions on corporate and regulatory matters.
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