Georgia banks more than tripled their profits in 2012, with the bulk of their earnings coming in the fourth quarter of the year.
That’s encouraging news for a state economy that needs the financial industry to be an engine for growth. The flow of credit is critical for job creation and housing.
The state’s banks made $2.25 billion in 2012, up from $537 million in 2011. They made $1.08 billion in the fourth quarter alone. The lion’s share of those profits came from the two largest banking companies headquartered in Georgia, SunTrust and Synovus Financial.
In 2012, nearly three quarters of the state’s banks made a profit, up from three out of five a year earlier.
The improving profitability underscores a continuing trend of stabilization in the industry, said David Oliver, a spokesman for the Georgia Bankers Association.
“It’s real encouraging,” he said. “We were pleased.”
Still, Oliver said, loan demand continues to be light. Total loans at Georgia banks fell 0.8 percent, to $188.2 billion, and total assets fell 0.8 percent, to $267 billion. Many banks remain troubled and are still removing loans from their balance sheets. Nonperforming assets, largely loans no longer earning interest, were down more than 40 percent, to 2.62 percent of banks’ total assets in the fourth quarter. That’s the lowest level since mid-2008, and there have been 11 straight quarters of decline.
Oliver said fewer people are having trouble paying back loans.
Deposits at Georgia banks were up 1.3 percent, to $214.8 billion, as people continue to save. The value of foreclosed properties held by banks fell 20 percent from the fourth quarter of 2011 to the fourth quarter of 2012, as banks are more able to sell those properties.
The improvement has been slow, but consistent, Oliver said.
There were 228 banks reporting in Georgia at the end of 2012, 14 fewer than in the fourth quarter of 2011. Georgia has had more bank failures than any other state, but has not had a bank failure since mid-November.
Nationally, bank earnings were up 19 percent in 2012, to $141.3 billion, the second-highest annual level ever. Profits for the fourth quarter were at their highest level in six years.
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