FDIC: N.C. banks among most prepared for bad loans
The Business Journal of the Greater Triad Area - by Chris Coletta
North Carolina’s state-chartered banks are more equipped than their national peers to handle future loan losses, new federal data show.
The Federal Deposit Insurance Corp. says there are 93 FDIC-insured, state-chartered banks in North Carolina. Collectively, those banks’ reserves for loan losses equal 87.6 percent of noncurrent loans and leases – those that are at least 90 days past due.
Across the country, that figure, commonly known as the “coverage ratio,” is 69.5 percent for state-chartered institutions. The total national figure, which includes nationally chartered banks, is 85 percent.
Not all noncurrent loans go bad. But regulators like to see banks set aside money to deal with them, particularly in a worsening economic situation such as this one.
In North Carolina, regulators have historically pushed banks to be conservative with their lending and copious with their reserves. The FDIC also has warned of falling coverage ratios across the U.S.
The conservative actions by North Carolina banks do have a downside, though: When banks set aside reserves, the money is subtracted from their bottom lines. More than a third of state-chartered banks were unprofitable through the first nine months of the year, compared to 21 percent across the country.
By contrast, 21 state-chartered North Carolina banks – or 22.6 percent – saw their earnings rise through Sept. 30. Nationwide, that was 40 percent of banks.
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