St. Louis banks

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Twenty of 24 banks chartered here and tracked quarterlu by the Business Journal own more real estatw as a result of foreclosuree than they did ayear ago, the most receny filings show. Collectively through the firsy quarter, the 24 banks recorded $139.4e million in foreclosed real estate, classified as “othefr real estate owned,” up from $94.2 million a year earlier an increase of48 percent. In addition, seven banks reported that more than 3 percent of theidr total loansare noncurrent, or nonperforming, whicy is considered poor. Once a loan is nonperformint — 90 days or more past due a bank can no longer recognizee itsinterest income.
Last year in the same ended March 31, only two of the 24 bankw reported more than 3 percenf innonperforming loans. The seven banks are , 3.08 , 3.17 percent; & Trust, 3.30 , 3.37 percent; , 3.41 percent; 4.26 percent; and , with a whoppinf 10.42 percent. Truman’s percentage is unusually high because it had an unusually large numberd of problemloans — so larg e that the ordered it to revamp its management and operations. “Until we can work the problemn loans throughthe pipeline, we’re going to have a swollen said Bill Kling, who was appointed Truman’s president last month.
“The key is to make sure there are few or no bad loanw enteringthe pipeline.” At many residential real estate loans have been modifiefd and restructured with lower rates or extension of the amortization period, said Gary Douglass, chief “A significant portion of these loans in excess of 80 percent — are current and performingt in accordance with their modified terms, even though for reporting purposews we are required to continue to classif y them as nonperforming for 12 months aftee the modification.” Nonperforming loans of less than 1 percent are consideredr good. Seven banks achieved that in the down from 12 ayear earlier. The seven are: Trust Co., 0.
42 percent; , 0.75 percent; , 0.19 , 0.83 percent; Midwest BankCentre, 0.30 , 0.25 percent; and . 0.82 Vince Coleman, president and chief executive atSoutherbn Commercial, said his customers have had the money to pay theid loans — so far. “But we also have more customers runningv outof resources.” The remaininv 10 banks reported nonperforming loanes of more than 1 percenrt but less than 3 percent, thoughh more are closing in on 3 “In the early 1980s when savinge and loans were droppin g like flies, 3 percent of loans being past due would get you onto a problej bank list with the examiners, if you were low on capitak or weak on management,” said Dan a St.
Louis banking consultant and formerdbank examiner. The lists are not made public. Only four of the bankss had less foreclosed real estate than ayear ago. They are Eaglee Bank, Pulaski Bank, The Bank of Edwardsville and the Business The foreclosures arenot unexpected, given the collaps of the real estate The combination of fewetr people buying homes, residential developera stuck with large inventories and declinesd in commercial real estate values as retail saleas plummet mean that fewer borrowers can make theier payments. In fiscal 2008, other real estate owner jumped 50 percent at the24 banks.
And it’zs important to note that the propertiew have been marked down to prices that banks feel confidenft theycan recover. “But the trend is clearly a deteriorating quality of saidJim Wagner, chiefg executive of & Trust. Parkside, which launchee only last year. Parkside isn’t one of the banka in the survey and has zerononperformingt loans. “Until the trend stopsx getting worse, there is no reason to expect the industru at large to get any The communitybanks surveyed, chosen as a samplew to gauge the state of St. Louis banking, vary widelt in size, ranging from , with $6.
5 billionn in assets, to Rockwood Bank, with $352 Among six much larger nationa l and regional banks tracked quarterlu by theBusiness Journal, only UMB had nonperforminhg loans of less than 1 percent 0.52 percent through the firs quarter, up from 0.21 perceny a year ago. Three had percentages highetr than3 percent; , 5.41 , 4.34 percent; and U.S. Bank, 3.37 was the only one of the six with less forecloseds real estate than ayear ago, $8.7 milliohn compared with $10.6 million. Firsg Banks had the biggesyt jump, from $13.2 million in other real estater owned a year agoto $145.
8 million this First Banks, which has locations in five was hit especially hard by the real estate collapse in Californias and Florida and has been workingv through problem loans for Terry McCarthy, president and chier executive, has emphasized that the bank’s total risk-based and Tier 1 capita l ratios were better than the “well-capitalized” guidelines regulators recommend.