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Banking industry finances improve.

A review of Federal Reserve Board third-quarter 1991 data from the nation's 12,518 banks conducted by Veribanc, the bank-rating company, shows an improvement in the financial position of the banking system. However, the recession continued to aggravate real estate problems in many states.

Problem loans throughout the banking system declined $3.13 billion, while net income rose by $4.3 billion and loan loss reserves decreased 40 million. As a result, effective net income for the system rose to $7.39 billion, the highest quarterly figure in two years.

However, despite the overall improvement in bank finances, problem real estate loans increased in 39 states during the quarter, as the recession aggravated commercial real estate loans and led to new difficulties with residential mortgages. Problem real estate loans have more than doubled in the past year in Virginia (up 209%), Delaware (up 151%), Maryland (up 120%), the District of Columbia (up 120%) and California (up 106%).
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Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Publication:Journal of Accountancy
Article Type:Brief Article
Date:Mar 1, 1992
Words:157
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