Idaho banks — actually, all of them — had a good quarter

Sharon Fisher//June 8, 2018

Idaho banks — actually, all of them — had a good quarter

Sharon Fisher//June 8, 2018

photo of first interstate
First Interstate Bank entered the Idaho market in 2016 with the purchase of Bank of the Cascades, and expanded it in April with the acquisition of Inland Northwest Bank. Photo by Sharon Fisher.

It was a really good earnings quarter for banks nationwide, and Idaho’s publicly owned banks were no exception.

It was, in fact, the highest quarter for quarterly net income ever, according to a representative who asked not to be named from the Federal Deposit Insurance Corp., which issued its report for Q1 2018 on May 22.

chart of fdic income
Banks saw a big increase in quarterly net income. Chart courtesy of FDIC.

“Aggregate net income for the 5,606 FDIC-insured commercial banks and savings institutions reporting first quarter performance totaled $56 billion in first quarter 2018, an increase of $12.1 billion (27.5 percent) from a year earlier,” the organization noted. It attributed the improvement to higher net operating income and a lower effective tax rate. Before the Tax Cuts and Jobs Act, implemented in December, estimated net income would have been $49.4 billion, an increase of $5.5 billion, or 12.6 percent, year over year.

Total assets in Idaho banks amounted to $6.17 billion, compared with $5.76 billion a year ago, the FDIC reported. Total deposits amounted to $5.28 billion, compared with $4.90 billion the year before, the FDIC noted.

photo of paul silva
Paul Silva

“Things are going really well,” said Paul Silva, Chase market director of banking, who is responsible for 18 of Chase’s 20 branches in Idaho. (The other two, near Coeur d’Alene, are covered by the Spokane market director.). Nationwide, the bank reported net income of $8.7 billion, an increase of 35 percent over the previous year. “We continue to have double-digit growth year over year,” he said. Specifically in Idaho, Chase has seen a 10 percent growth year-over-year with deposits, with an average deposit growth of 6 percent, he said. Moreover, Chase is seeing increased activity in all of its lines of business, from consumers to business, he said, with no one particular factor amounting for the increase.

Banner Corp., the parent company of Banner Bank and Islanders Bank, reported that net income in the first quarter of 2018 increased 21 percent to $28.8 million, or $0.89 per diluted share, compared to $23.8 million, or $0.72 per diluted share, in the first quarter a year ago. Revenues were $120.7 million during the quarter ended March 31, 2018, $125.9 million during the preceding quarter and $113.9 million during the first quarter a year ago.

Columbia Bank, which operates 14 locations in North Idaho, the Treasure Valley, and Twin Falls, had assets of $12.53 billion and $10.40 billion, with earnings per share increasing from $.50 a year ago to $.55 now.

First Interstate BancSystem, Inc., which gained an Idaho presence in 2016 by acquiring Bank of the Cascades, reported net income of $36.7 million, or $ .65 per share, compared with net income of $34.2 million, or $ .61 per share, for the fourth quarter of 2017, and $23.2 million, or $ .51 per share, for the first quarter of 2017. The company further expanded its Idaho presence in April by acquiring Inland Northwest Bank.

Washington Federal, Inc. announced quarterly earnings of $49,271,000 or $ .57 per diluted share for the quarter, compared with $42,070,000 or $ .47 per diluted share for the quarter ended March 31, 2017, a $ .10 or 21 percent increase in fully diluted earnings per share. Its total assets were $15.6 billion as of March 31, 2018 compared to $15.3 billion as of September 30. Asset growth since September 30 resulted primarily from a $341 million increase in net loans receivable and a $70 million increase in held-to-maturity securities, the organization said.

The sunny earnings reports came under some criticism by those who were opposed to the loosening of Dodd-Frank regulations.

The FDIC noted that revenue was offset by non-interest expenses, which rose 5.8 percent, and that salary and benefits grew by 4.3 percent. In addition, banks’ loan-loss provisions increased by 3 percent, with almost 37 percent of banks reporting higher loan-loss provisions. The FDIC attributed this to higher net charge-offs and a growing loan portfolio.