The number of banks that lost money grew 25% in the third quarter from a year earlier, according to the rating service Veribanc Inc.
In its analysis of Federal Reserve Board data, Veribanc of Wakefield, Mass., found that 555 banks had posted losses in the quarter ended Sept. 30, compared with 463 in the second quarter and 444 in the third quarter of 1997. The company also found that 30 banks had serious losses-defined as sufficient to deplete equity within a year-in the quarter, compared with 12 a year earlier.
"Losses are up across the board," said Warren G. Heller, Veribanc's director of research. "It seems it's getting harder and harder to make a buck.
Mr. Heller attributed the losses to three factors-turmoil in Asia, falling commodity prices, and a rise in consumer credit delinquency.
The total of problem overseas loans rose to $2.9 billion during the quarter, from $1.6 billion a year earlier, and the volume of problem agricultural loans increased by 11.2% during the 12 months, to $690 million.
Seven banks that posted losses had assets of more than $5 billion. Among them: Bankers Trust Corp. and BankAmerica Corp. But the overwhelming majority-453-of those that lost money had assets of less than $100 million, or 7.9% of all banks in this asset range.
The state with the most banks, Texas, also had the most money-losing banks. Forty-eight of its 826 banks, or 5.8% of the total, lost money in the third quarter, according to Veribanc's report. States with the highest percentages of money-losing banks included Hawaii, 30.8% of all banks, Arizona, 22.7%, and Idaho, 17.7%. - Alan Kline