Ariz. banks see slower rebound

Wiles

Banking is back. But many Arizona-based financial institutions are no longer around to enjoy the show.

The Federal Deposit Insurance Corp. last week reported that the nation’s banks earned a record quarterly profit of $40.3 billion from January through March as bad-loan charges continued to recede like an unpleasant, distant nightmare. The 15th straight quarter of netincome improvement for the industry also was marked by a decline in problem banks, now less than 9 percent of the total and dropping. The number of failures has trickled to 13 so far in 2013 from a recent full-year peak of 157 in 2010, and the FDIC’s insurance fund is healthier. Arizona banks also are rebounding, though more slowly. Perhaps the most telling statistic is that only 29 percent of local banks were unprofitable in the latest quarter, down from 32 percent one year earlier. A whopping 84 percent were losing money at one point in 2009.

But while local banks are gradually bouncing back, the state’s industry is just a shell of its former self. Arizona counts a mere 28 local banks today, down from 58 five years ago. Those institutions employed 3,157 people at the end of the first quarter, down from 5,125 back then. Many of the displaced employees have found jobs at the larger national and regional banks that operate in Arizona and increasingly dominate the landscape here.

The banking crisis, recession and real-estate slump took a toll, with 17 Arizona banks failing over the past five years. Most of the rest were acquired by out-of-state institutions. Two Arizona institutions went under this year — just when it looked like all the worst news was behind us following a failurefree year in 2012.

The FDIC’s tally for Arizona includes only those banks that are headquartered here. It doesn’t count statistics for national banks like Chase, Wells Fargo and Bank of America or larger regional players.

The big institutions are the ones that really have driven the industry’s profit surge nationally, highlighting a major divide between large and small banks.

Employees