Reflecting trend, region’s banks earnings improve

Mirroring the performance of banks across the country, most banks in the Upper Midwest reported earnings improvement in 2010 compared to 2009. Aggregate earnings for 2010 beat 2009 earnings in Colorado, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, South Dakota, and Wisconsin, although earnings were lower in Wyoming and Montana..In Colorado and Wisconsin, however, aggregate earnings for 2010 remained negative, and in South Dakota, earnings among banks with fewer than $100 million in assets remained the same as 2009..The FDIC reported on Feb. 23 that insured institutions earned $87.5 billion in 2010, compared to a loss of $10.6 billion in 2009. The FDIC noted the earnings are more in line with industry performance from 2007, when it earned $99.9 billion. "Overall, 2010 was a turnaround year with four straight quarters of positive earnings," said FDIC Chairman Sheila Bair. "We are encouraged not only by the rising trend in total industry net income, but also by the fact that a substantial majority of insured institutions are participating in this trend.".Throughout the Upper Midwest, earnings by state came in as follows: Colorado negative $52 million; Illinois $797 million; Indiana $274 million; Iowa $515 million; Kansas $251 million; Michigan negative $315 million; Minnesota $230 million; Missouri $566 million; Montana $162 million; Nebraska $550 million; North Dakota $244 million; South Dakota $11.648 billion; Wisconsin negative $339 million, and Wyoming $40 million..Across the nation, 20.01 percent of banks were unprofitable in 2010. In the Upper Midwest, 21.9 percent of the 3,206 banks in the 14-state region reported losses for the year, compared to 29.3 percent that reported losses in 2009. Michigan continues to have the most unprofitable banks in the region, with 32.5 percent reporting losses for 2010. However, that is an improvement from 2009, when 40.4 percent of the banks reported losses..Some of the most dramatic improvements took place among banks with assets of $100 million or fewer. In Minnesota, for example, the 222 banks with less than $100 million in assets collectively earned $45 million in 2010, compared to collectively losing $2 million in 2009. Earnings for smaller banks improved to $56 million from $36 million in Illinois; to $96 million from $69 million in Iowa; to $13 million from negative $7 million in Michigan; to $35 million from $5 million in Missouri, and to $27 million from $17 million in Wisconsin. In Colorado, small bank earnings improved to negative $7 million from negative $24 million, stayed at $18 million in South Dakota, and deteriorated to $1 million from $3 million in Wyoming. In Montana, small bank earnings fell to negative $8 million from positive $9 million..Illinois, Indiana and Missouri experienced dramatic turn-arounds in aggregate earnings for the industry in 2010..In Illinois, total industry earnings for the state's 527 banks went from negative $504 million in 2009 to positive $797 million in 2010. Several banks account for the change. Busey Bank of Champaign, the state's eighth-largest bank, reported 2010 earnings of $23 million compared to a loss of $317 million in 2009. First Midwest Bank of Chicago, the state's sixth-largest bank, reported $31 million in earnings for 2010 compared to a loss of $21 million in 2009. Harris N.A., of Chicago, the state's second-largest bank, reported $110,000 in income for 2010 compared to a $112 million loss in 2009. State Farm Bank, Illinois' third-largest bank, reported a loss of $38 million for 2010, but that is an improvement over 2009 when it lost $159 million..Indiana's 102 banks reported total industry earnings of $274 million compared to a loss of $102 million in 2009. Contributing to that improvement were First Merchants Bank of Muncie, the state's third-largest bank, which earned $18 million in 2010 compared to losing $28 million in 2009; MainSource Bank of Greensburg, the state's fourth-largest bank, which earned $19 million compared to losing $60 million in 2009, and Centier Bank in Whiting, the state's eighth-largest bank, which earned $10 million compared to losing $26 million in 2009..In Missouri, the state's 308 banks reported collective earnings of $566 million compared to a loss of $324 million in 2009. Among the banks impacting that change was Enterprise Bank & Trust, Clayton, the state's seventh-largest bank, which reported earnings of $13 million in 2010 after reporting a $43 million loss in 2009. The state's sixth-largest bank, Bank Midwest, N.A., of Kansas City, and the state's fourth-largest bank, First Bank of Creve Coeur, reported losses in 2010, but they were much smaller than losses they reported in 2009..The FDIC reports that average return on assets across the country for 2010 was 0.65 percent, and only 0.36 percent for banks with fewer than $100 million in assets. On a statewide aggregate basis, banks in Colorado, Illinois, Indiana, Kansas, Wisconsin, Wyoming, Montana, Michigan and Minnesota reported ROA under the national average. However, Illinois had two banks with ROA's in the threes, and 11 banks in the twos; Kansas had five banks with ROAs exceeding 3.0 and seven in the twos; Indiana had two banks with ROAs in the twos; Wisconsin had three banks with ROAs exceeding 3.0 and 17 banks with ROAs in the twos; Montana had three banks with ROAs exceeding 3.0 and four banks with ROAs in the twos; Michigan had four banks with ROAs exceeding 3.0 and two banks with ROAs in the twos; and Minnesota had two banks with ROAs exceeding 3.0 and 10 banks with ROAs in the twos.