Journal Article

Performance of eleventh district banks in 1989: progress but not profits

Abstract: Commercial banks in the Eleventh Federal Reserve District reduced their losses substantially in 1989 but still collectively reported a loss for the year. The improvement primarily resulted from increases in fee income. In addition, Eleventh District banks reduced their nonperforming loans and the costs associated with these loans. Despite the improvement, District banks still have relatively large holdings of nonperforming loans and repossessed real estate. ; Balance sheets of Eleventh District banks show the effects of correcting the problems of low-quality assets. Charging off nonperforming loans reduced capital at District banks. In response to reduced capital, banks contracted their lending activity and invested in liquid assets. Asset growth has been very weak, and this growth resulted primarily from banks acquiring failed savings and loan associations.

Keywords: Federal Reserve District, 11th; Bank profits;

Bibliographic Information

Provider: Federal Reserve Bank of Dallas

Part of Series: Economic and Financial Policy Review

Publication Date: 1990

Issue: Sep

Pages: 15-24