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FDIC report: Nevada banks still struggling

Banks with Nevada charters continued to bleed red ink in the third quarter as the economy limped along, according to data released by the Federal Deposit Insurance Corp. on Tuesday.

“Overall, it shows that banks in Nevada continue to be distressed,” said Bill Uffelman, chief executive officer of the Nevada Bankers Association. “It’s not a pretty picture.”

The 27 state-chartered institutions lost $177 million in the first three quarters, compared to profit of $19 million at the same time last year. The banks recorded $370 million in profit in the same period two years ago.

The percentage of banks that are unprofitable jumped to 85 percent from 61 percent a year ago and 29 percent two years ago.

Loan portfolios continued to deteriorate for Nevada banks, said Dale Gibbons, chief financial officer of Western Alliance Bancorporation, the holding company for Bank of Nevada.

Nonperforming assets almost doubled as a percentage of assets, to 6.4 percent from 3.23 percent a year ago.

Yet Gibbons said banks are operating more efficiently and have increased the assets and lowered expenses.

The banks employed 2,315 workers, down 12 percent from 2,638 a year ago. Employment has dropped 23 percent from 2,989 two years ago.

Deposits increased 25 percent over a year ago to $13.6 billion.

Assets that include loans also increased 23 percent over the year.

Nationally, banks are doing better than in Nevada.

The FDIC reported $2.8 billion in third-quarter net income nationally, more than three times the $879 million a year earlier. Banks recorded a $4.3 billion net loss in the second quarter of 2009.

FDIC Chairwoman Sheila Barr in a statement said earnings have improved at banks and thrifts although “the effects of the recession continue to be reflected in their financial performance.”

“Today’s report makes clear that in spite of the difficulties, signs of improvements are appearing, with net profits of $2.8 billion, capital ratios at their highest levels in 19 years, problem loans growing more slowly, and noninterest income rising,” James Chessen, chief economist for the American Bankers Association ,said in a statement. “Significant challenges still remain, of course, as banks continue to work through these difficult economic times.”

The economist said no customer has ever lost insured deposits backed by the FDIC fund. Each depositor is fully insured up to $250,000.

Contact reporter John G. Edwards at jedwards@reviewjournal.com or 702-383-0420.

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