The recent call report data issued by the Federal Deposit Insurance Corp. indicated that the fourth quarter of 2010 was yet another quarter in which Massachusetts banks outperformed other banks nationwide, as local banks did throughout the entire calendar year.
While there were 30 bank failures nationwide in the fourth quarter and 157 for the year, there were none in the fourth quarter in Massachusetts and only one here earlier in the year – the only one during the entire economic crisis.
Despite a challenging economy and weak loan demand, total loans in Massachusetts state-chartered institutions improved from one year ago, with an increase of $500 million, or 0.9 percent, from Dec. 30, 2009 to Dec. 30, 2010. From the third quarter to the fourth quarter of 2010, lending fell slightly (.3 percent). Total Massachusetts loans equaled $58.3 million.
“Banks have sufficient funds to make loans, but loan growth won’t occur until the economy is viewed as strengthening by businesses and loan demand improves,” said Daniel J. Forte, president of the Massachusetts Bankers Association.
Total deposits in Massachusetts state-chartered institutions were up 5.4 percent, or $3.6 billion, from one year ago, and constant at $70.7 billion from the third to fourth quarter last year.
Nationally, 68.1 percent of state-chartered financial institutions reported earnings gains at the end of the fourth quarter, while in Massachusetts that number was much healthier at 77.5 percent. Conversely, nationwide 21.1 percent of state-banking institutions (25 percent for all banks nationally) were unprofitable, while in Massachusetts only 9.4 percent were unprofitable.
In yet another telling category, net charge-offs nationwide compared with Massachusetts were dramatic, with 1.8 percent of loans across the country written off (2.2 percent for all banks nationally), and only 0.2 percent for state-chartered banks in Massachusetts.
Nationwide, delinquent/non-current loans equaled 3.8 percent of total loans (4.8 percent for all banks nationally); in Massachusetts, the figure was significantly better – 1.6 percent for state-chartered banks.
“What these number say,” said Forte, “is that Massachusetts and our New England region as a whole are in much better shape than the rest of the nation as we recover from the recent recession.”
Bruce Spitzer is director of communications at the Massachusetts Bankers Association. Email: bspitzer@massbankers.org
