A return to profitability: the performance of eleventh district commercial banks

Kevin J. Yeats

Economic and Financial Policy Review, 1991, issue Jul, 15-29

Abstract: In 1990, the commercial banking industry in the Eleventh Federal Reserve District posted profits for the first time in five years. Kevin Yeats examines this turnaround and concludes that banks returned to profitability for three reasons: the Federal Deposit Insurance Corporation (FDIC) took over many bad loans as it resolved failed banks, banks lowered their burden from nonperforming loans by realizing losses and removing bad loans from the books, and improvement in the regional economy enabled some borrowers to catch up on delinquent payments. Yeats predicts that if delinquencies continue to decline and net income remains positive at Eleventh District banks, the region's banking industry can proceed to full financial recovery. ; Yeats notes that from late 1987 through 1990 the general improvement in the Southwest economy was not reflected in the performance of this region's banks. To reach that conclusion, Yeats examines the performance of banks that received no FDIC assistance during this time and finds that their improved capital ratios followed the region's economic upswing with a lag of at least three years.

Keywords: Federal Reserve District, 11th; Bank profits (search for similar items in EconPapers)
Date: 1991
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedder:y:1991:i:jul:p:15-29

Ordering information: This journal article can be ordered from

Access Statistics for this article

More articles in Economic and Financial Policy Review from Federal Reserve Bank of Dallas Contact information at EDIRC.
Bibliographic data for series maintained by Amy Chapman ().