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  • normlasky normlasky May 21, 2011 8:24 AM Flag

    Assets and Liabilities of Commercial Banks

    Data released by Federal Reserve on 5/20/11. Shows assets and liabilities of commercial banks in United States through the week ending May 11 2011. Data contained below is seasonally adjusted.

    We're about 1/2 way the second qtr. of 2011. The Federal Reserve data for the week ending May 11 2011 provides helpful insights into the strength of the recovery and the banking sector. Here's what I got out of it:

    1. Deposits - Up $452 billion or 5.9% vs. last year and up $174 billion from 3/31/11 (annualized pace of increase plus 24%). In last year bank borrowings have dropped $401 billion or 19%, investment securities have increased by $122 billion or 5% and loans have dropped $192 million or 3%.

    2. Loans - For the first time since the great recession, bank loans showed an increase for the week ending May 11, 2011 - up 3.6% annualized from 3/31/11. Real estate loans (home equity, residential mtg and cre) continued to decrease in the 2nd quarter 2011.

    However, this was more than offset by c&i loans and other loans which comprise about 1/3 of total loans. These two categories showed loan growth of $60 billion or 32% annualized for the first half of the second quarter 2011.

    Also, it is notable that consumer loans (credit cards and auto loans) in total were flat at 5/11/11 vs 3/31/11 after declining 16% in the last year.

    3. Allowance for Loan Loss Reserve - Data shows commercial banks continue to reduce loan loss reserve. At 5/11/11, reserve as % of loans dropped to 2.8% vs. 3.1% at 3/31/11, 3.2% at 12/31/10 and 3.4% at 4/30/10.
    In absolute dollars ALL dropped by $16 billion for the first half of the 2nd qtr. 2011 vs. a reduction of $11 billion in the 1st. qtr of 2011.

    4. Securitized Real Estate Loans - Up $10 billion or 1% from last year.

    If this trend continues for the balance of the 2nd qtr. 2011, bank earnings will improve substantially and imo, much better than analysts expectation.

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