Important Notices
December 15, 2008
DFI - Quarterly Report - THIRD Quarter 2008
Quarterly Report (Excel) Third Quarter 2008Introduction
Each quarter, the Quarterly Report presents summary statistics for banks, industrial banks, offices of foreign banks, trust companies and credit unions with a one-year comparison. The intention of the Quarterly Report is to show at-a-glance significant changes on the balance sheets and reports of income of DFI licensees. We invite readers to review the Financial Statistics page on our website, and the financial data published by the Federal Reserve Bank, Federal Deposit Insurance Corporation and the National Credit Union Administration.
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Commercial Banks
For the one-year period ending September 30, 2008, the number of state-chartered banks increased by 4.8% to 217 at the quarter end, compared to 207 one year previous. Assets were up from $217.3 billion to $233.6 billion, an increase of $16.3 billion, or 7.5% over the same period, while loans were up 10.7%, from $154.3 billion to $170.8 billion. Total equity capital decreased 3.2%, from $27.7 billion to $26.8 billion at the end of the quarter, causing the equity capital to total asset ratio to decline from 12.75% to 11.47%. Deposit growth did not keep pace with loans, increasing 6.3% to $162.7 billion, which caused the loan to deposit ratio to increase to 104.96% from 100.78% at the close of the third quarter 2007.
For year-to-date 2008, state-chartered banks reported $477.7 million in losses, off $2.5 billion or from the $2.0 billion in net income reported at the close of the third quarter 2007. This was due in part to the increase in loan loss provisions, from $285.0 million to $1.9 billion, an increase of 582.1%.
The net interest margin was down from 3.60% to 3.37%, constricted by the increased cost of funds. Loan loss reserves were up 50.0% from $1.8 billion at the close of the third quarter to $2.7 million at the close of the current quarter; however, noncurrent loans went from $1.0 billion to $3.9 billion, which caused reserve coverage of noncurrent loans to decrease from 170.5% to 67.93%. Other real estate owned increased 609.5%, going from $60.2 million to $427.1 million./p>
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Industrial Banks
Total assets and total deposits experienced double-digit declines from September 30 one year ago. Assets were down 18.9% from $13.2 billion to $10.7 billion, while deposits declined 25.4%, going from $11.4 billion to $8.5 billion. Total equity capital was up by 36.4%, going from $1.1 billion to $1.5 billion, causing the capital to asset ratio to increase from 8.06% to 13.95%. During the period, the number of industrial banks decreased by one, from 14 to thirteen.
Loans were off just slightly, going from $8.1 billion to $8.0 billion which caused the loan-to-deposit ratio to increase from 71.22% to 93.59%. Industrial banks showed a net profit of 9.6 million for the year to date September 30, up from a net loss of $744.3 million for the third quarter of 2007, while noncurrent loans decreased from $250.4 million to $194.9 million, a reduction of $55.5 million or 22.2%. The net interest margin declined from 4.37% to 3.34%. Other real estate owned decreased by 78.6%, going from $28.1 million at quarter end in 2007 to $6.0 million in the third quarter 2008.
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Credit Unions
Credit unions continue to experience very slight growth in total assets, total loans and total shares in the twelve-month period ending September 30. Assets, at $72.7 billion were up 2.7% from the $70.8 billion reported as of September 30, 2007. Loans increased 1.8% over the period; up $850 million from $51.4 billion to $52.3 billion, while shares went from $59.6 billion to $60.5 billion, a gain of 1.5%. Members' equity stayed essentially the same at $7.6 billion. This caused the capital to asset ratio to decrease from 10.76% at the close of third quarter 2007 to 10.45% in the same period in 2008. The allowance for loan losses was up 66.7% from $361.5 million to $602.8 million. The number of credit unions went from 199 to 189; a decrease of ten, or 5.0 percent.
Net margin to average assets increased from 4.03% at the end of third quarter 2007 to 4.20% for the same period in 2008, while the provision for loan losses more than doubled, going from $282.8 million at quarter end 2007 to $627.4 million as of September 30, 2008. For the first nine months of the year, net income dropped from $268.0 million in 2007 to $32.7 million, a decrease of $235.3 million or 87.8%. Delinquent loans were up 86.9%, going from $360.0 million to $672.7 million, an increase of $312.7 million.
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Foreign Banks
State-chartered offices of foreign banking organizations continued to experience double-digit growth in total assets, total loans and total deposits during the twelve-month period ended September 30, 2008. Total assets were up 38.7% from $18.0 billion to $25.0 billion, while loans at $18.1 billion were up 19.6% from $15.1 billion at the close of the third quarter 2007. Deposits were $11.8 billion as of September 30, 2008, an increase of 32.6% from the $8.9 billion reported as of September 30, 2007. The number of foreign banking organizations with state-chartered offices in California decreased by one, going from 36 to 35 during the period.
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Trust Companies and Departments
Total corporate assets of trust companies at the end of the third quarter 2008 were $586.6 million, down $159 million or 21.3% from the $745.6 million a year previous. Income from fiduciary activities was down 30.2% from third quarter 2007 while net income was down $82.7 million from $79.4 million at the end of the third quarter 2007 to a net loss of $3.2 million in the same period in 2008. The declines were caused in large part by the reduction in the number of trust companies from ten to seven. Total fiduciary assets at state-chartered banks and trust companies decreased 65.8% from $ 389.3 billion to $133.3 billion. The number of state-chartered banks with trust powers remained at 19 during the period.
