Georgia’s banks collectively finished 2011 in the black, turning a third straight quarterly profit and reporting full-year net earnings for the first time since 2008, according to a report Tuesday from the Federal Deposit Insurance Corp.
Earnings improved largely because banks set aside less money to cover bad loans, a trend seen across the country.
The improving health of the banking industry and the industry's ability to lend is vital to Georgia's economic recovery.
Georgia banks earned $194.8 million for the fourth quarter of 2011. The industry shook off a loss in the first quarter of 2011 to post full-year profits of $569.8 million, according to FDIC data. The industry lost $1.87 billion in all of 2010.
Much of that profit came from one bank.
Atlanta-based SunTrust Banks earned $71 million in the fourth quarter and $495 million for all of 2011. The bank's profit figures had been higher, but SunTrust announced last week a charge retroactive to the fourth quarter for an expected government settlement over mortgage and foreclosure issues.
According to the FDIC, 4.26 percent of loans at Georgia banks were noncurrent or foreclosed at the end of 2011, down from 5.18 percent in fourth quarter 2010.
Foreclosed real estate held by banks fell 20 percent from a year ago to $2.78 billion.
Total loans and leases were $189.6 billion, down 1.3 percent from a year ago, but up 2.4 percent from third quarter 2011.
More customers repaid loans and banks charged off fewer bad loans, improving profitability, said Joe Brannen, president and CEO of the Georgia Bankers Association.
“Some economic headwinds remain, but we are encouraged to see another quarter and full year of better results for our state banking industry," he said.
Sixty percent of Georgia’s banks were profitable at year-end, compared with just 46 percent at the end of 2010.
Chris Marinac, bank analyst with FIG Partners in Atlanta, said a lot of work remains to clean up banks' balance sheets.
“You can’t guarantee the impact of the recession is over,” he said. “You have to assume it’s not over and that we keep fighting the fires for the next 24 months.”
Banks nationwide earned $26.3 billion in the fourth quarter of 2011, the 10th straight quarter of improved results. The $119.5 billion U.S. banks collectively earned in 2011 was the industry's highest full-year profit since 2006.
Also on Tuesday, the FDIC said banks on its national “problem list” declined to 813 at the end of 2011, from 844 in third quarter 2011. The FDIC does not identify problem banks.
Ninety-two banks failed in the U.S. last year, including 23 in Georgia, which leads the nation in failures since mid-2008. There were 157 failures nationwide in 2010.
About the Author
