DBO – Quarterly Report – Fourth Quarter 2014

The Quarterly Report presents summary statistics for banks, industrial banks, credit unions, offices of foreign banks and trust companies. The data include prior-year and prior-quarter comparative numbers. The Quarterly Report shows at-a-glance significant changes on the balance sheets and income reports of Department of Business Oversight licensees. We invite readers to review the Financial Statistics page on our website, and the financial data published by the Federal Reserve Bank, Federal Deposit Insurance Corporation and National Credit Union Administration.

Commercial Banks

As of December 31, 2014, the number of state-chartered banks decreased by five, or 3.1%, to 155 from 160 the prior year. The 4Q number fell by two from the prior quarter. Aggregate assets as of December 31 totaled $355.2 billion. That was up $52.7 billion, or 17.4%, from $302.4 billion at year-end 2013, and up $12.0 billion, or 3.5%, from the prior quarter. Equity capital at the end of 4Q 2014 totaled $44.6 billion, up 17.1% from $38.1 billion the prior year and up 2.1% from the prior quarter. The equity capital-to-total asset ratio dropped to 12.5% from 12.6% the prior year and 12.7% in the prior quarter.

Quarterly earnings (net income) for state-chartered banks in 4Q 2014 totaled $865.1 million. That was up 8.6%, or $68.3 million, from $796.8 million in the same period of 2013 but down 2.0%, or $17.6 million, from $882.6 million in the third quarter. Net income for the full year in 2014 totaled $3.2 billion, up 0.8% from 2013.

Outstanding loans at the end of 4Q 2014 totaled $240.0 billion. That was up $34.6 billion, or 16.9%, from $205.4 billion the prior year and up $9.0 billion, or 3.9%, from $231.0 billion in the third quarter. Deposits totaled $285.3 billion at the end of the fourth quarter, up $43.7 billion, or 18.1%, from the prior year and 3.4%, or $9.4 billion, from the prior quarter. The loan-to-deposit ratio decreased to 84.1% from 85.0% the prior year, but increased from 83.7% in the previous quarter.

Noncurrent loans at the end of 4Q 2014 totaled $1.7 billion, down 30.8% from $2.5 billion the prior year and down 14.6% from the third quarter. The reserve coverage of noncurrent loans increased to 171.4% from 119.7% at year-end 2013 and 145.1% in the prior quarter.

Loan loss reserves at the end of the fourth quarter totaled $2.9 billion, down $28.0 million, or 0.9%, from the prior year, but up a fraction of a percent from the prior quarter.

Credit Unions

The number of credit unions at the close of 4Q 2014 totaled 145 – no change from the prior year. The number declined by one from the prior quarter.

Aggregate assets at the end of 4Q 2014 totaled $85.7 billion. That was up $6.1 billion, or 7.7%, from $79.6 billion in the prior year, and up $1.6 billion, or 1.9%, from the previous quarter. Shares, at $72.9 billion, were up by 6.6% from $68.4 billion in 4Q 2013 and up 1.6% from the prior quarter.

Loans totaled $49.7 billion at the end of 4Q 2014, up 15.8% year-over-year and 3.1% from the prior quarter.

Delinquent loans, at $314.4 million, were down $91.4 million, or 22.5%, from $405.9 million the prior year and down $22.8 million, or 6.8%, from $337.3 million in the previous quarter. Delinquent loans as a percentage of total loans were 0.63%, compared to 0.95% the prior year and 0.70% in the third quarter.

Net worth at the end of 4Q 2014 totaled $9.6 billion, up 10.1% from $8.7 billion the prior year and up 1.8% from $9.5 billion in the third quarter. The net worth-to-asset ratio increased to 11.24% from 10.99% the prior year but decreased from 11.25% in the previous quarter. The allowance for loan losses, at $512.3 million, fell 21.5% from $652.6 million in the prior year and 9.0% from $562.8 million in the third quarter.

Net income for the year in 2014 totaled $789.0 million, up 1.7% from $775.6 million in 2013. Net income for the fourth quarter totaled $159.4 million, down a fraction of a percent from 4Q 2013 and down 23.1% from $207.2 million in the third quarter.

Foreign Banks

The number of foreign banking organizations with state-chartered offices in California remained steady at 31 in 2014.

Aggregate assets of state-chartered offices of foreign banks at year-end 2014 totaled $30.1 billion, down $274.1 million or 0.9%, from $30.4 billion the prior year , but up $866.9 million, or 3.0%, from $29.3 billion in the previous quarter. Loans, at $26.9 billion were up 7.3% from the prior year and 7.6% from the previous quarter. Deposits totaled $10.5 billion, down $1.5 billion or 12.4%, year-over-year 9.9% from the prior quarter.