The Federal Deposit Insurance Corp. has released its latest bank earnings report, and the news continues to be mixed in Nevada with net income declining, while assets rose for the third consecutive year.
The 17 Nevada-based financial institutions insured by the FDIC posted $1.59 billion in net income last year, a number that was down significantly from the $2.12 billion reported in 2014 and 2013. The decline in net income was directly related to the number of banks chartered in Nevada, which shrank by one in 2015. Bank of Nevada, which is owned by Phoenix-based Western Alliance Bancorp., surrendered its state charter, and is now operated as an Arizona state chartered bank.
Phyllis Gurgevich, president and CEO of the Nevada Bankers Association, said the number of Nevada chartered banks will drop to 16 next year when Nevada State Bank surrenders its state charter. Zions Bancorp, based in Salt Lake City, is consolidating its seven bank charters, including the state charter of Nevada State Bank, into one charter.
Banks statewide reported assets increased in 2015 to $157.5 billion, up from $132.7 billion in 2014 and $122.6 billion in 2013. Nevada banks also continued to show year-over-year deposit growth, as financial institutions statewide posted $142.6 billion in deposits last year, up from $112.7 billion in 2015 and $104 billion in 2013.
Of the 17 FDIC-insured banks in Nevada, four reported assets of less than $100 million, while 13 had assets greater than $100 million.
Employment in the banking industry, however, declined last year to 2,569 people. That’s compared with 3,160 in 2014 and 3,128 employees in 2013.
Nationally, the FDIC said commercial banks and savings institutions aggregated net income of $40.8 billion for the fourth quarter, up 11.9 percent, from the $36.5 billion reported for the fourth quarter of 2014. The increase in earnings was mainly attributable to a $6.8 billion increase in net operating revenue, according to the FDIC. Net income for 2015 totaled $163.7 billion, an increase of $11.4 billion over 2014. According to the FDIC, almost two out of every three banks, or 63.6 percent, reported higher net income last year.
“The banking industry continued to improve in the fourth quarter,” said FDIC Chairman Martin J. Gruenberg. “However, banks must remain vigilant as they manage interest rate risk, credit risk and evolving market conditions.”
The number of banks on the FDIC’s Problem List also fell from 203 to 183 during the fourth quarter. This is the smallest number of problem banks in more than seven years and is down dramatically from the peak of 888 in the first quarter of 2011.
An FDIC spokeswoman, citing privacy laws, said the federal agency doesn’t list problem banks by name or region. But, a list of failures and assisted bank failures on the FDIC’s website shows a total of 13 banks in Nevada failed or were assisted by the agency between 2007 and 2015.
Plaza Bank posts Q4, 2015 profits
Plaza Bancorp Inc., parent of Plaza Bank in Las Vegas, recently reported unaudited net income for the fourth quarter and 2015 using the pooling of interest method, due to its merger last year with Manhattan Bancorp.
Plaza Bancorp completed the $70.4 million acquisition on June 30. For 2015, the bank posted unaudited net income of $4.67 million, or 16 cents per share, up from $1.8 million, or 6 cents per share, for 2014.
“Results for the year … were affected by $4.9 million of expenses associated with the aforementioned merger and the sale of Manhattan Bancorp’s mortgage division,” the bank said in its earnings report. Without the one-time expenses, unaudited net income would have been $7.6 million, or, 25 cents per share for 2015. Net income for the fourth quarter was $3.4 million, or 11 cents per share, compared with $1.2 million, or four cents a share, for the same period in 2014.
“The progress we have made in merging the two banks together is beginning to show results as we continue to revitalize and energize the branches we acquired,” said Gene Galloway, president and CEO of Plaza Bancorp.
Galloway noted that loan volume in the fourth quarter reached a record $124 million, an increase of $53 million more than the bank did in the quarter following the merger.
Plaza Bank operates eight branches in Southern Nevada and California. As of Dec. 31, the bank had total assets of $1.04 billion, and total deposits of $888.6 million.
SSSCU posts healthy Q4, 2015 earnings
Silver State Schools Credit Union recently posted its third consecutive year of profits as the Las Vegas-based financial institution has recovered from the depths of the recession.
Andrew Hunter, president and CEO, said the credit union reported net income of $14.69 million in 2015, up 11 percent from $13.27 million in 2014. For the fourth quarter net income reached $4.19 million, up from $2.76 million for the same period last year. Hunter attributed SSSCU’s results to improving credit quality in Southern Nevada.
“Our financial performance … has been very strong,” Hunter said, “We are certainly proud of our results, and that the credit union has been able to take advantage of a steadily improving local economy.”
Silver State Schools recorded a loan loss provision of $3.7 million in 2015, following a credit of $2.4 million in 2014. Over the last two years, delinquent loans have declined from $13 million in 2013 to $4.7 million in 2014 and to $3.5 million last year.
Liquidity remains strong, and regulatory net worth stands at $45.3 million, equal to 6.79 percent of total assets, the credit union said in an earnings report.
“In 2015, we achieved strong financial results for the third consecutive year, reporting 15 consecutive quarters of net income,” Hunter said. “We are encouraged by these results, and look forward to continuing our progress.”