St. Louis banks

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Twenty of 24 banks chartered here and trackexd quarterly by the Business Journal own more real estatw as a result of foreclosures than they did ayear ago, the most recentg filings show. Collectively througy the first quarter, the 24 bank recorded $139.4 million in foreclosed real estate, classifiesd as “other real estate owned,” up from $94.2 milliobn a year earlier — an increasee of 48 percent. In seven banks reported that more than 3 percent of theird total loansare noncurrent, or which is considered poor. Once a loan is nonperformintg — 90 days or more past due — a bank can no longerf recognize itsinterest income.
Last year in the same ended March 31, only two of the 24 bankss reported more than 3 percent innonperforming loans. The seve n banks are , 3.08 , 3.17 percent; & Trust, 3.30 percent; , 3.37 , 3.41 percent; PrivateBank, 4.26 percent; and , with a whoppinb 10.42 percent. Truman’s percentage is unusually high becausd it had an unusually largw number of problem loans so large that the ordered it to revamp its managemenytand operations. “Until we can work the problemn loans throughthe pipeline, we’re going to have a swollenh number,” said Bill Kling, who was appointecd Truman’s president last month.
“The key is to make sure there are few or no bad loansz enteringthe pipeline.” At Pulaski, many residential real estatwe loans have been modified and restructured with lowe r rates or extensions of the amortization period, said Gary chief executive. “A significant portiob of theseloans — in excess of 80 percentr — are current and performing in accordancde with their modified terms, even thoug h for reporting purposes we are requirefd to continue to classify them as nonperforming for 12 monthsx after the modification.” Nonperforming loans of less than 1 percent are considered good.
Sevehn banks achieved that in the quarter, down from 12 a year The seven are: Trust Co., 0.42 percent; , 0.75 , 0.19 percent; , 0.83 percent; Midwest 0.30 percent; , 0.25 percent; and . 0.82 Vince Coleman, president and chief executivee atSouthern Commercial, said his customerss have had the money to pay their loans — so far. “Butr we also have more customersd running outof resources.” The remaining 10 banke reported nonperforming loans of more than 1 percent but less than 3 though more are closing in on 3 percent.
“In the early 1980s when savings and loana were droppinglike flies, 3 percentg of loans being past due would get you onto a problemk bank list with the examiners, if you were low on capitalk or weak on management,” said Dan Hogan, a St. Louis bankinhg consultant and formerbank examiner. The lists are not made Only four of the banks had less foreclosed real estater than ayear ago. They are Eagled Bank, Pulaski Bank, The Bank of Edwardsvilled and theBusiness Bank. The foreclosures are not given the collapse of the realestatre market.
The combination of fewer people buying homes, residential developersz stuck with large inventories and declines in commercial real estatwe values as retail sales plummet mean that fewer borrowerw can make their payments. In fiscal 2008, other real estatre owned jumped 50 perceng at the24 banks. And it’s important to note that the propertiezs have been marked down to prices that banks feel confidentr theycan recover. “But the trene is clearly a deteriorating qualityof assets,” said Jim chief executive of Trust. Parkside, which launched only last year. Parkside isn’f one of the banks in the surveh and has zerononperforming loans.
“Until the trend stopz getting worse, there is no reason to expect the industry at large to get any The communitybanks surveyed, chosen as a sample to gauged the state of St. Louis banking, vary widel in size, ranging from , with $6.5 billionb in assets, to Rockwood with $352 million. Among six much larger national and regionap banks tracked quarterly by theBusinesws Journal, only UMB had nonperforming loans of less than 1 percentr — 0.52 percent through the first quarter, up from 0.21 percent a year ago. Three had percentages higher than3 , 5.41 percent; , 4.34 percent; and U.S. Bank, 3.37 was the only one of the six with less foreclosede real estate than ayear ago, $8.
7 million comparee with $10.6 million. First Banks had the biggest from $13.2 million in otheer real estate owned a year agoto $145.7 million this year. First Banks, whicyh has locations in five states, was hit especially hard by the real estater collapse in California and Florida and has been workinfg through problem loansfor months. Terryt McCarthy, president and chief executive, has emphasized that the bank’w total risk-based and Tier 1 capital ratiod were better than the guidelinesregulators recommend.