Bank earnings up in South Dakota, Montana; flat in North Dakota

Northwestern Financial Review, May 23, 1998

Earnings for North Dakota banks in 1997 remained at about 1996 levels, while they increased slightly for banks in South Dakota and Montana, the Federal Reserve Bank of Minneapolis reported.

Return on average assets for North Dakota's 117 commercial banks remained 1.11 percent. Slight improvements in overhead expenses helped North Dakota banks boost profitability somewhat.

Return on average assets for South Dakota's 96 banks was 1.25 percent, up from 1.22 percent in 1996. Return on average assets for Montana's 96 banks was 1.28 percent, up from 1.19 percent in 1996. Income generated from nonlending activities such as fees and service charges increased in 1997, which helped boost profits at the banks in Montana and South Dakota.

The return on average assets for all the banks in the Minneapolis Federal Reserve district is 1.20 percent.

"District bank performance in 1997 was excellent," said Karen Grandstrand, banking supervision vice president for the Minneapolis Federal Reserve Bank. "Banks reported record profitability equal to 1996, maintaining the highest levels of profits in more than 16 years. In addition, capital ratios district-wide remained at very strong levels. We will continue to monitor trends evident in 1997, such as the slight increase in loan losses."

The Fed reported that in North Dakota:

Non-current loans as a percentage of total loans was 1.44 percent, up from 1.39 percent in 1996; and Capital as a percentage of total assets increased to 10.85 percent, from 10.58 percent in 1996.

For South Dakota, the Fed reported:

* Non-current loans as a percentage of total loans was 1.55 percent, down from 1.56 percent in 1996; and

Capital as a percentage of total assets increased to 11.75 percent, from 11.36 percent in 1996.

For Montana, the Fed observed: Non-current loans as a percentage of total loans was 1.47 percent, up from 1.38 percent in 1996; and

Capital as a percentage of total assets decreased to 10.37 percent from 10.46 percent.

More information is available at the Minneapolis Fed's web site: http: // woodrow.mpls.frb.fed.us.