Third-quarter earnings were generally strong for western banks, but local economic conditions caused variations.
Vibrant economies in Utah and Oregon, for example, contributed to above- average growth of net income growth - as high as 20%. But the sluggish Hawaiian economy kept earnings there relatively stagnant.
"Banks are only as strong as the economy in which they operate," said Campbell Chaney, an analyst with Sandler O'Neill.
First Security Corp., Salt Lake City, earned $47.4 million in the third quarter, a record - 20.5% more than a year earlier.
The $13.7 billion-asset bank cited strong loan growth and a "robust" local economy. Of the six states where First Security operates, three - Nevada, Idaho, and Utah - lead the country in job growth, the bank reported.
Nonperforming assets did increase, rising 28% over the year-earlier level, but remained below industry norms.
Salt Lake rival Zions Bancorp., with $6.8 billion of assets, also turned in a stellar quarter. It earned $25.8 million, a 15.6% jump from the year- earlier quarter.
"They're enjoying some of the best revenue growth in the industry," said Joseph K. Morford 3d, an analyst with Alex. Brown & Sons.
Portland, Ore.-based U.S. Bancorp, with $33.2 billion of assets, turned in a less impressive performance than the Utah banks; its earnings rose 4%, to $118 million. Despite its acquisition of California Bancshares in the quarter, expenses dipped only three-tenths of a percent on a pro-forma basis.
With Hawaii's economy only inching toward recovery, Bancorp Hawaii's earnings slipped 4.8% in the quarter, to $31.3 million. Nonperforming assets jumped to 1.1% of total loans, from 0.7% last year. The $13.7 billion-asset bank did see some modest loan growth, though, thanks mainly to its acquisitions in the South Pacific.
Earnings were also down at First Hawaiian Inc., by about 3%. to $19 million. Like its rival, $8.2 billion-asset First Hawaiian has been diversifying, but mainly in the Pacific Northwest, which contributed to the growth of its loan portfolio, up 10.8% since Sept. 30 of last year.
