Weiss Ratings: Southwestern Banks Show Signs of Turnaround
Southeastern Banks Still Struggle
(firmenpresse) - JUPITER, FL -- (Marketwire) -- 01/24/12 -- Southwestern banks and thrifts(1) led the nation in showing signs of a turnaround based on key ratios related to profitability and asset quality, according to a by Weiss Ratings, a leading independent rating agency of U.S. financial institutions. In contrast, financial institutions in the Southeast(2) saw far less improvement, with banks in the region ranking at or near the bottom on both measures.
Weiss reviewed holdings of nonperforming loans as a percentage of total loans and return on average assets (ROAA) for more than 7,400 financial institutions to identify geographic areas where the health of the banking industry may be improving. While nationwide, nonperforming loans as a percentage of total loans declined slightly year over year from 4.35% in third quarter 2010 to 4.30% in 2011, Southwestern banks saw a much more significant improvement. They reported the lowest nonperforming loan ratio in the nation of 2.65%, compared to 3.37% the year prior. Institutions including Prosperity Bank (PB) and Whitney Bank, a unit of Hancock Holding Company (HBHC), are headquartered in the Southwest and have loan portfolios with very few nonperformers.
Meanwhile, financial institutions in the Southeast, where E*Trade Bank, owned by E*Trade Financial (ETFC), RBC Bank (USA), a unit of Royal Bank of Canada (RY), and Synovus Bank (SNV) are headquartered, continued to be hampered with delinquent loans, posting a region-wide nonperforming loan ratio of 4.54%, the second worst after the Midwest(3) aggregate of 4.86%.
Gene Kirsch, senior financial analyst of Weiss Ratings, commented: "The industry is beginning to see a turnaround, but with nonperforming loans still five times higher than pre-crisis levels, it's hardly out of the woods. A slightly improved economy, new banking regulations and reformed lending practices have contributed to the decrease in nonperforming loans. However, certain institutions in regions most impacted by the recession have been slower to recover and many remain at risk."
The industry's ROAA increased to 1.10% through third quarter 2011 from 0.72% during the same period in 2010. Again, banks in the Southwest, led by GE Capital Financial, a unit of General Electric (GE), and American Express Centurion Bank and American Express Federal Savings Bank, both units of American Express (AXP), enjoyed the highest ROAA, 1.61%, up from 1.21% a year ago. In contrast, Southeastern financial institutions reported the worst performance of the six regions with ROAA of only 0.76%, up from 0.58%.
Results on a state-by-state basis can be found at . Weiss Ratings advises bank customers to carefully monitor the financial health of their financial institutions. For a list of Weiss Ratings' strongest and weakest banks, visit .
Weiss Ratings, the nation's leading independent provider of bank, credit union and insurance company financial strength ratings and sovereign debt ratings, accepts no payments for its ratings from rated institutions. It also distributes independent investment ratings on the shares of thousands of publicly traded companies, mutual funds, closed-end funds and ETFs.
(1) Southwest Region includes Colorado, Louisiana, New Mexico, Oklahoma, Texas and Utah.
(2) Southeast Region includes Alabama, Arkansas, Florida, Georgia, Mississippi, North Carolina, South Carolina, Tennessee, Virginia and West Virginia.
(3) Midwest Region includes Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin.
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Datum: 24.01.2012 - 21:35 Uhr
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