Ga. banks post gain in profits for 2016

Higher interest rates, growing loan portfolios fuel 4.8 percent increase.

Georgia’s 183 banks reported $3 billion in collective profits last year — a 4.8 percent increase over the previous year — from growing loan portfolios and higher interest rates.

The full-year results were a slowdown from three months earlier, when the state’s banks were reporting profit growth of 6 percent for the first nine months of the year.

One reason for the late-year dip: lower profits at Atlanta-based SunTrust Banks. Net income at the largest Georgia-based bank fell 3 percent in 2016, to $1.9 billion, depressed by higher expenses and set-asides for loan losses in the fourth quarter.

Still, the industry results reflect an improving economy and slowly rising interest rates, which helped the financial institutions earn more on their growing lending businesses.

“Georgia’s banking industry had a solid year in 2016 that tracked closely with the growing Georgia economy,” said Joe Brannen, president of the Georgia Bankers Association. “Loans are growing, which means people and businesses in our communities are getting funding that goes back into the economy to support more growth.”

The trade association noted that total deposits in the state’s financial institutions increased by more than 5 percent to a record $252 billion, while loans increased 6 percent to $221 billion, the highest level since 2008.

The percentage of profitable banks in the state was 93 percent, up from about 90 percent a year earlier.

But the industry continued to shrink last year as bigger banks gobbled up smaller ones, and one bank failed. The number of banks fell by 11 from 2015, while employment also declined slightly in 2016, from 42,833 to 42,732, according to the Federal Deposit Insurance Corp.