Important Notices
March 23, 2009
DFI - Quarterly Report - FOURTH Quarter 2008
Quarterly Report (Excel) Fourth Quarter 2008
Introduction
The Quarterly Report presents summary statistics for banks, industrial banks, credit unions, offices of foreign banks and trust companies with a one-year comparison each quarter. 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 the DFI 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
In 2008, the number of state-chartered banks increased by 1.9% to 218, compared to 214 one year ago. Assets were up from $224.1 billion to $242.5 billion, an increase of $18.4 billion, or 8.2% over the same period, while loans were up 7.3%, from $160.1 billion to $171.7 billion. Total equity capital increased a fraction of a percent, from $28.0 billion to $28.1 billion at the end of the year, causing the equity capital to total asset ratio to decline from 12.51% to 11.58%. Deposit growth outstripped loans growth, increasing 7.9% from $154.9 to $167.1 billion, which caused the loan to deposit ratio to decrease to 102.75% from 103.32% at yearend 2007.
For 2008, state-chartered banks reported $906.7 million in losses, off $3.1 billion or 140.7% from the $2.2 billion in net income reported at yearend 2007. This was due in part to the increase in loan loss provisions, from $566.4 million to $3.29 billion, an increase of 458.2%.
The net interest margin was down from 3.50% to 3.23%, constricted by the increased cost of funds. Loan loss reserves were up 60.2% from $1.9 billion at yearend 2007 to $3.1 billion at yearend 2008; however, noncurrent loans went from $1.5 billion to $4.6 billion, which caused reserve coverage of noncurrent loans to decrease from 130.02% to 66.61%. Other real estate owned increased 452.0%, going from $113.2 million to $625.0 million.
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Industrial Banks
Industrial bank assets were down 9.7% from $12.2 billion to $11.0 billion, while deposits declined 17.0%, going from $10.4 billion to $8.7 billion. Total equity capital was up by 53.1%, going from $973.8 million to $1.5 billion, causing the capital to asset ratio to increase from 8.01% to 13.59%. During the period, the number of industrial banks decreased by one, from 13 to twelve.
Loans were up 9.5%, going from $7.3 billion to $8.0 billion which caused the loan-to-deposit ratio to increase from 70.19% to 92.59%. Industrial banks showed a net profit of $2.9 million for the year, up from a net loss of $879.3 million in 2007, while noncurrent loans increased from $46.1 million to $104.6 million, an increase of $58.5 million or 127.1%. The net interest margin declined from 4.36% to 3.50%. Other real estate owned decreased by 84.5%, going from $36.5 million at yearend 2007 to $5.7 million at yearend 2008.
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Credit Unions
Credit unions continued to experience very slight growth in total assets, total loans and total shares during 2008. Assets, at $72.6 billion were up 1.7% from the $71.4 billion reported as of December 31, 2007. Loans increased a fraction of a percent over the year to $52.0 billion, while shares went from $59.7 billion to $60.5 billion, a gain of 1.4%. Members' equity decreased 2.4% during the year from $7.6 billion to $7.4 billion. This caused the capital to asset ratio to decrease from 10.66% at yearend 2007 to 10.23% at yearend 2008. The allowance for loan losses was up 82.2% from $450.7 million to $821.3 million. The number of credit unions went from 196 to 187; a decrease of nine, or 4.6 percent.
Net margin to average assets increased from 4.02% at yearend 2007 to 4.22% at yearend 2008, while the provision for loan losses more than doubled, going from $483.0 million at year end 2007 to $1.1 billion as of December 31, 2008. Net income dropped from $218.1 million in 2007 to a net loss of $197.0 million, a decrease of $415.0 million or 190.3%. Delinquent loans were up 86.6%, going from $475.5 million to $887.2 million, an increase of $411.7 million.
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Foreign Banks
State-chartered offices of foreign banking organizations experienced double-digit growth in total assets and total loans during 2008. Total assets were up $3.2 billion or 15.2% from $22.1 billion to $25.5 billion, while loans at $19.3 billion were up 22.7% from $15.8 billion at yearend 2007. Deposits were down 12.6% from 12.1 billion at yearend 2007 to $10.6 billion as of December 31, 2008. The number of foreign banking organizations with state-chartered offices in California decreased by one, going from 36 to 35 during the year.
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Trust Companies and Departments
Total corporate assets of trust companies at the end of the year were $587.9 million, down $173.4 million or 22.8% from the $761.3 million a year previous. Income from fiduciary activities was down 36.0% over the year while net income was down $118.9 million from $97.2 million in 2007 to a net loss of $21.6 million 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 69.7% from $ 356.5 billion to $108.1 billion. The number of state-chartered banks with trust powers remained at 19 during the period.
