The banking sector has improved earnings, while residential delinquency was down from a year ago. But compared to the prior quarter, delinquency has deteriorated. Although the total number of banks has declined, the number of institutions with a concentration in home loans grew.
Residential loans owned by federally insured banks climbed to $1.8780 trillion in the fourth quarter from $1.8520 trillion in the previous period. Home-loan holdings also grew from the fourth-quarter 2010, when banks owned $1.8997 trillion in residential mortgages.
The data was included in the Quarterly Banking Profile from the Federal Deposit Insurance Corp.
Delinquency of at least 30 days on “other 1-4 family residential” loans was 11.77 percent in the fourth quarter. The rate increased from 11.62 percent as of Sept. 30 but fell from the prior year’s 12.28 percent.
The sector additionally held $0.6034 trillion in home-equity lines of credit, cutting their holdings from $0.6083 trillion three months earlier and $0.6369 trillion a year earlier.
HELOC delinquency was 2.98 percent, worse than 2.92 percent in the third quarter but declining from 2010, when the rate was 3.05 percent.
Another $0.2400 trillion in construction-and-development loans were owned by banks as of Dec. 31, 2011.
Nonfarm, nonresidential mortgage assets finished last year at $1.0592 trillion. Commercial mortgages were $1.0555 trillion in the prior period and $1.0712 trillion in the same period during 2010. Delinquency for the asset class was 4.63 percent as of the end of last year.
Multifamily loans outstanding finished 2011 at $218.5 billion, while apartment loan delinquency fell to 3.25 percent, an improvement from 4.84 percent a year earlier.
Bank investments in mortgage-backed securities grew to $1.6460 trillion from $1.6010 trillion in September. A year prior, MBS holdings were $1.4847 trillion.
Net operating income at banks was $24.9 billion in the fourth quarter, better than $19.8 billion earned during the prior quarter and the $19.6 billion earned in the same quarter during 2010.
On an annual basis earnings improved to $119.5 billion in 2011 from the previous year’s $85.5 billion.
As of the fourth-quarter, 7,357 FDIC-insured financial institutions reported statistics, down from 7,437 in the third quarter and 7,658 in final three months of 2010.
The most-recent bank count included 6,290 commercial banks and 1,067 savings institutions. Banks with a concentration in mortgage lending numbered 732, more than a revised 718 in 2010.
Problem banks declined to 813 institutions with $319 billion in assets last year from 884 entities with assets of $390 billion in the final quarter of 2010.
Last year saw just 92 bank failures, tumbling from 157 in 2010 and the fewest since 2008’s 25 bank failures.
Just three new institutions started reporting last year.
“2011 represented the second full year of improving performance by the banking system,” Acting FDIC Chairman Martin J. Gruenberg said in the report, adding, “insured institutions of all sizes continued to make substantial progress in improving their profitability.”
