Minnesota banks pull in over $900 million in 2018

Banks in the North Star state earned $926 million in income in 2018, up from $842 million in 2017, according to the FDIC. They made $195 million in the fourth quarter, down from $251 in the third quarter. Banks under $100 million in assets had $72 million in income for the year, down from $78 million in 2017. They made $13 million in the fourth quarter, down from $20 million in the third quarter.

Minnesota lost four banks in the fourth quarter, and is down 13 banks from 2017, ending the year at 293 charters. Of those, 206 were classified as Sub S.

Results largely improved from 2017’s year-end numbers, although they are down slightly from the first three quarters of the year. Return on assets was 1.30 percent for the year, up from 1.18 percent in 2017, but down slightly from 1.34 percent a quarter prior. Banks under $100 million in assets had ROA of 1.06 percent for the year, up from 0.97 percent a year ago. Over $100 million banks had ROA of 1.33 percent, up from 1.20 percent in 2017.

Net interest margins at the state’s banks continued their rise, with 3.91 percent for the year, up from 3.84 percent a year ago. Banks under $100 million had NIM of 3.84 percent, up from 3.74 percent in 2017, while those over that threshold saw a NIM increase to 3.91 percent from 3.86 percent.

Return on equity was up a percentage point, to 11.88 percent for 2018 from 10.86 in 2017, although it did see a slight drop from the third quarter’s 12.27 percent.

Unprofitable banks in Minnesota dropped to just over 2 percent, down from 3.27 percent in 2017. Noncurrent loans & leases to total loans & leases were flat at 0.87 percent during that time.

Nationally, net income at what the FDIC defines as community banks increased $2.7 billion from a year ago to $6.8 billion in the fourth quarter. The increase represents an improvement of 65.1 percent. Excluding the benefits of a lower effective tax rate, estimated fourth-quarter net income would have increased by 11.2 percent from a year ago.

Full-year net income rose to $26.1 billion during 2018, up $5.9 billion (29.4 percent) compared with 2017. Only 3.41 percent of community banks were unprofitable in 2018, the lowest percentage of unprofitable community banks on record.



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