The FDIC announced third quarter industry earnings last week, as we noted earlier.
The number of banks reporting losses in the third quarter in the Midwest remained about the same as the number reporting losses for the second quarter – 727 banks and thrifts out of 3,349 or 21.7 percent. At the end of the second quarter, 723 banks out of 3,396, or 21.2 percent, reported losses.
In Iowa, Kansas and Nebraska, the number of banks reporting losses dropped significantly, while in Michigan, Montana, South Dakota and Wisconsin, they increased. Iowa saw the biggest decline, with 45 banks reporting losses compared to 57 at the end of the second quarter, and Wisconsin saw the biggest increase with 69 reporting losses compared to 50 last quarter.
Banks in the FDIC’s Kansas City region were the most profitable in the country. Collectively, the region’s 1,895 banks earned $5.889 billion in the third quarter. Aggregate losses reported by banks in the New York and San Francisco regions brought the nationwide industry total down.
Banks in the Kansas City region reported the highest net interest margin in the third quarter – 4.46 percent. They also reported the highest return on assets (.074 percent) and the highest return on equity (7.19 percent).
Excluding South Dakota, Iowa is the leader in Upper Midwest bank earnings with $306 million recorded through the end of the third quarter. Minnesota, with earnings of $239 million, and Nebraska, with earnings of $234 million, came in second and third. South Dakota reports earnings of $5.056 billion through three quarters; the figure is largely the result of earnings at Wells Fargo Bank, National Association, which reports earnings of $5.376 billion on its own.
South Dakota’s small banks were the most profitable in the region. The state’s 48 banks with less than $100 million in assets reported return on equity of 7.78 percent for the third quarter. That same category of small banks in Iowa reported ROE of 7.14 percent. In most states, however, smaller banks had a tougher time. In Michigan and Colorado, the collective ROE for bankers with less than $100 million in assets was negative; in Indiana it was 0.28 percent, in Minnesota it was 1.16 percent, and in Illinois it was 3.62 percent.