dyakonostrlin.blogspot.com
M&I Bank, which is headquartere in Milwaukee but isthe fifth-largesr bank in the Twin Cities, lost $388 millionj in the second quarter, comparerd to income of $112 million in the first quarter of the It ranked 8,440th out of the nation’s 8,451 banks reporting net incomd to the that quarter. In the first quarter, M&Ij reported a profit and was ranker 31st in the countr outof 8,498 banks reporting net income. headquartered in Minneapolis and part of theholding company, reportex a loss of $50 million for the second quarter, addint to its losses of $13.9 million in the firstr quarter.
Ameriprise Bank in Minneapolissaw $10 milliohn in losses; since it’s only 2 years old, it’xs not expected to be profitable yet. “Banks are managing theirf business in achallenging cycle,” said Joe Witt, CEO of the in Edina. “Some banks took a but the vast majority arestilpl profitable.” According to the FDIC data, 80 out of 124 Twin Citiess banks were profitable in the second quarter, compare to 94 out of 123 in the first One reason for the losses were loan-loss provisions, moneyg that is set aside to make up for loanw that have been or will be charged off.
Many of thoser troubled loans are in the real estate Inits second-quarter earnings M&I reported a loan- and lease-loss provisionm of $886 million because of the deteriorating housing The bank took the provision to strengthen its balance sheet in an uncertaib environment, said Greg Smith, the bank’s chiedf financial officer, adding that M&I’s strong capital position allows it to take such an aggressivse step. “We’ve seen how the residentialo construction markets have deteriorated and as a part of our effort to have a fortreszbalance sheet, we’ve built that allowance for futur losses,” he said.
BankFirst also cited the real estatew market in takinga $50 million loan-loszs provision in the second quarter, bringing its total reserves to $77 million. “Conditions in the creditt markets are creating unique stresseas and challenges to lenders ofeverty size,” said Dennis Mathisen, chairmahn of Marshall BankFirst, in a lette r to employees in August. “BankFirst, like most other financial institutions, is being affected by the credit downturn.” Charge-offs on bad loans, whers a bank writes off the also were factors in some of thebiggest losses.
“We had a largwe loss in the second quarter and we expected some questioneabout that,” said Lane Peterson, presidenty of North Star Bank, which reported a $1.5 millionn loss. North Star decided in June to charge off a larg commercial and residentialreal estate-developmentg loan that had gone bad as well as to shor up its loan-loss provisions. The idea is to take the hit and have one bad thenbounce back. Peterson said North Star, which was profitable in the first quartere ofthe year, should be profitable again by the end of the year.
This strateguy is one that many banks are taking in the face of impendinbad loans, said Brad Bakken, chairmaj of the MBA and president and CEO of Citizends Independent Bank in St. Louiss Park. “Some are takinh the opportunity to take care of that in the second quarte andmove on,” he said. The news wasn’ft all bad for banks. Four of the sevehn most unprofitable Twin Cities banks of the first quartert swung back into the black for thesecond quarter. They included in Dinkytown, which reported a $1.1 million loss for the firsr quarter. In the secons quarter, it reported net income of $1.7 million, putting it among the most profitabled TwinCities banks. of St.
Paul took a $7 millionb loss in the first quarterd because of a bad loan to amortgage company, which was late r shut down by state regulators. which was $360,000 in the black for the secondd quarter, is suing the company, called , and six of its
No comments:
Post a Comment