Saturday, June 25, 2022

Oklahoma banks set record for earnings in 2017

Congratulations Oklahoma bankers – collectively you set yet another industry earnings record in 2017!

“We’ve been pointing out all year that the industry was on track to set another earnings record (in 2017),” OBA President and CEO Roger Beverage said. “Even though total industry earnings for all banks ($25.5 billion) were off by some $17.7 billion (41 percent) over last year’s 4th quarter, that decline was due primarily to the one-time effects of the tax reform package signed into law in December.

“Overall, total industry earnings for 2017 totaled $164.8 billion, for a decline of $6 billion or 3.5 percent compared to 2016. But in Oklahoma, as you can see from the Oklahoma Bank Earnings chart, overall Oklahoma bank earnings were up slightly for the year 2017 (by $39 million or 2.9 percent) at $1.396 billion, compared to $1.357 billion in 2016.”

Beverage noted total loans and leases are ahead of last year by almost $4 billion or 5.5 percent, and deposits increased by more than $4 billion.

“Net interest margins were the same compared to 2016: 3.59 percent, up from 3.51 percent in 2015,” he said. “However, (return on assets) was down (1.23 percent) compared to 1.30 percent in 2016.”
Beverage also pointed out net charge-offs were up slightly (0.22 percent compared to 0.16 percent) from 2016, but non-current loans actually declined (from 2.89 to 2.36 percent). Problem banks increased by two while the total number of bank charters continued to decline.

“I expect to see a continued decline in the number of charters,” he said. “Without some significant changes in Washington, and assuming new rules and regulations continue to come out of Washington, I just don’t see how smaller banks can continue to absorb the costs as easily as some of the larger ones.
“I’m glad that the Federal Reserve is looking to more carefully calibrate the rules depending on risk profile and operating structure, but not all federal banking regulators feel that way.”