Georgia banks significantly cut their losses in the first three months of 2011 compared to same the period a year earlier, according to a federal report.
The state’s banks lost a collective $83.2 million, down from $347.3 million in first quarter 2010.
It was the best cumulative performance for the state’s banks since third quarter 2008, the last quarter in the black, according to Federal Deposit Insurance Corp. data.
Joe Brannen, president and CEO of the Georgia Bankers Association, summed up the results in two words: “much improved.”
“These are encouraging results, and we're cautiously optimistic to see yet another quarter of improvement from a deep recession,” he said.
Georgia’s banks remain stressed, however, and they continue to lag the recovery seen in other states.
Sixty-two percent of Georgia’s banks posted a profit in first quarter, compared to 87 percent nationally. Nationwide, cumulative first quarter profit increased 66.5 percent to $29 billion for the nearly 7,600 U.S. banks.
Deposits in Georgia banks rose 5 percent year-over-year, to $215.8 billion, though they were down slightly from the end of last year. Total loans and leases were $186.3 billion, down 1.4 percent from first quarter 2010.
The ratio of non-current loans to total loans was 5.5 percent, down from 6.3 percent a year ago.
Georgia banks collectively held just under $3.2 billion in foreclosed real estate at the end of the quarter, down 2 percent from a year ago and 9 percent from the end of last year.
Nationally, profits grew mainly because banks set aside less money to cover loan losses. FDIC Chairman Sheila C. Bair noted the improvement but said “there is a limit to how far reductions in loan-loss provisions can boost industry earnings."
The number of troubled institutions nationally grew to 888 from 884, despite the removal from the list of 26 U.S. banks that failed during the first quarter. Twelve Georgia banks have failed this year, and the state leads the nation with 63 failures since mid-2008.
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