St. Louis banks

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Twenty of 24 banks chartered here and tracked quarterly by the Business Journal own more real estat e as a result of foreclosureas than they did ayear ago, the most recent filingx show. Collectively through the first quarter, the 24 banks recorded $139.4 million in foreclosec real estate, classified as “other real estate owned,” up from $94.q2 million a year earlier — an increasr of 48 percent. In addition, seven banks reportefd that more than 3 percent of thei total loansare noncurrent, or nonperforming, whicj is considered poor. Once a loan is nonperforming 90 days or more past due a bank can no longer recogniz e itsinterest income.
Last year in the same quarter, enderd March 31, only two of the 24 banks reportecd more than 3 percent innonperforming loans. The sevenj banks are , 3.08 percent; , 3.17 & Trust, 3.30 percent; , 3.37 , 3.41 percent; PrivateBank, 4.26 and , with a whoppingy 10.42 percent. Truman’s percentage is unusuallyt high because it had an unusually large numberr of problem loans so large that the ordered it to revamp its managemengand operations. “Until we can work the problem loans througthe pipeline, we’re going to have a swollem number,” said Bill Kling, who was appointed Truman’sa president last month.
“The key is to make sure there are few or no bad loansx enteringthe pipeline.” At Pulaski, many residential real estate loanz have been modified and restructured with lower rates or extensions of the amortization period, said Gary chief executive. “A significant portion of theseloans — in exceses of 80 percent are current and performing in accordance with their modified terms, even though for reportinbg purposes we are required to continue to classify them as nonperforming for 12 months afte the modification.” Nonperforming loans of less than 1 percenrt are considered good. Seven banks achieved that in the down from 12 a year Theseven are: & Trust Co.
, 0.42 percent; , 0.75 , 0.19 percent; , 0.83 Midwest BankCentre, 0.30 percent; , 0.25 percent; and . 0.82 Vince Coleman, president and chief executive atSouthern Commercial, said his customeres have had the money to pay their loans — so far. “Bu t we also have more customerss running outof resources.” The remaining 10 banks reportec nonperforming loans of more than 1 percentf but less than 3 though more are closing in on 3 percent. “In the early 1980s when savings and loans were droppinvlike flies, 3 percent of loans beingb past due would get you onto a problem bank list with the if you were low on capital or weak on said Dan Hogan, a St.
Louis banking consultant and former bank examiner. The lists are not made Only four of the banks had less foreclosede real estate than ayear ago. They are Eagle Bank, Pulaskio Bank, The Bank of Edwardsville and theBusinessw Bank. The foreclosures are not unexpected, givenh the collapse of the realestate market. The combination of fewer peopleebuying homes, residential developers stuck with large inventories and declines in commercial real estates values as retail sales plummet mean that fewer borrowers can make theirf payments.
In fiscal 2008, other real estate owned jumpee 50 percent at the 24 And it’s important to note that the properties have been markex down to prices that banks feel confident they can “But the trend is clearly a deterioratinbg quality of assets,” said Jim Wagner, chief executive of Trust. Parkside, which launched only last year. Parksider isn’t one of the banks in the survet and has zerononperforming loans. “Until the trenr stops getting worse, there is no reason to expecft the industry at large to get any The communitybanks surveyed, chosen as a sample to gaug the state of St. Louis banking, vary widely in ranging from , with $6.
5 billion in to Rockwood Bank, with $352 million. Among six much large national and regional banks tracked quarterly by theBusinesd Journal, only UMB had nonperforming loans of less than 1 percen t — 0.52 percent through the first quarter, up from 0.21 perceng a year ago. Three had percentages higher than3 , 5.41 percent; , 4.34 percent; and U.S. 3.37 percent. was the only one of the six with less forecloses real estate than ayear ago, $8.7 milliomn compared with $10.6 million. First Banks had the biggest jump, from $13.2 million in other real estatwe owned a year agoto $145.8 milliomn this year.
First Banks, which has locations in five was hit especially hard by the real estate collapsee in California and Florida and has been workingg through problem loansfor months. Terry president and chief executive, has emphasized that the bank’s totalp risk-based and Tier 1 capital ratiows were better thanthe “well-capitalized” guidelinews regulators recommend.