More banks lost money in the first three months of this year than in any first quarter since 1992, according to a report.
Veribanc Inc., a Wakefield, Mass.-based research firm, reported last week that 536 banks-or 5.79% of all institutions-posted net losses during the first quarter. That is the highest first-quarter percentage figure since 1992, when 6.57% lost money.
Most of the money-losers were small banks, with assets of less than $100 million, said Warren G. Heller, research director at Veribanc. More than half of those were banks that had been in business for two years or less.
With the farm economy still reeling from low crop prices, agricultural banks also took their lumps in the first quarter.
Seventeen percent of the banks that lost money lend mostly to farmers, ranchers, and other agriculture-related businesses. Nebraska, for example, had 12 farm banks report net losses in the first quarter, compared with four during the same period in 1998.
Overall, U.S. banks charged off $21.7 million of farm loans during the first quarter, up a whopping 648% over the first three months of 1998.