The failure of California bank IndyMac a week ago left many Americans worried about the health of their own financial institutions. But local bank executives, backed by mostly positive second-quarter reports, have a simple message: Don?t worry.
“[IndyMac?s collapse] has become a nationwide story because it?s become pretty unusual for the banking industry nowadays,” said Gary Geisel, chairman and chief executive officer of Provident Bank. “Frankly, it?s a pretty isolated story.”
Provident on Thursday reported a net income of $15.1 million in the second quarter, down slightly from $15.5 million during the same quarter last year. The bank reported a first-quarter loss of $17.6 million, including a $42.7 million write-down of its real estate investments.
But Provident made no additional write-downs of those investments in the second quarter, and nonperforming loans decreased to 0.59 percent of all loans from 0.73 percent in the first quarter. Total loans were up 8 percent in the second quarter from a year before.
“Our original underwriting is coming through, we tend to be pretty conservative, and I think we did pretty well,” Geisel said. “The regional economy is holding up well.”
Pittsburgh?s PNC Bank reported second-quarter income of $505 million, up from $423 million a year earlier and $377 million in the first quarter. PNC bought out Baltimore-based Mercantile last year.
“Although the [nonperforming loan] numbers are creeping up, our reserves are increasing more rapidly and we feel very good about our balance sheet,” said Louis Cestello, head of PNC?s Greater Maryland division.
BB&T, with 128 branches in Maryland, reported a second-quarter net income Thursday of $428 million, down from $458 million a year before. Its percentage of nonperforming assets increased to 0.95 percent from 0.73 at the end of the first quarter and 0.33 percent in the second quarter of 2007.
1st Mariner Bank on Wednesday said it slashed its losses to just $469,000 in the second quarter from $3.27 million in the first quarter and $3.86 million a year before.
Bank Chairman and CEO Ed Hale said in a statement that outstanding loans increased 12 percent and its mortgage division increased originations.
“While the challenges our industry faces are considerable, we see them as cyclical,” Hale said.
“We will continue to take the actions necessary to improve our operating performance and maintain our well-capitalized status during these uncertain times.”
