Economically Speaking: Missouri banks thriving, driving state's economy

Kelvin Simmons is director of the Missouri Department of Economic Development.

The banking industry is an integral part of Missouri's economy. Banks are often the backbone of business, serving as the economic engine, particularly in small towns. Though some areas of our economy have seen declines during the national recession, recent reports and statistics indicate that the banking industry in Missouri has remained healthy and is thriving.

The Division of Finance, part of the Department of Economic Development, regulates all state-chartered banks and trust companies, savings banks, savings and loan companies and various providers of consumer credit. The division is dedicated to ensuring the safety and soundness of Missouri's state-chartered financial institutions through examinations, monitoring and administrative assistance.

The Division of Finance regulates 298 state-chartered banks across the state. Missouri actually boasts the sixth largest number of banks of all states in the country. Only Illinois, Iowa, Kansas, Minnesota and Texas rank higher. And Missouri's banks are strong. As of Sept. 30 (the most recent numbers we have available), Missouri's state-chartered banks held $51.7 billion in assets and $41.6 billion in deposits.

These numbers represent a 14.9 percent increase in assets and a 13 percent increase in deposits since Sept. 30, 2002. At that time, 303 state-chartered banks held assets of $45 billion and deposits of $36.8 billion. According to Division of Finance staff, a large merger of an out-of-state bank into a Missouri state-chartered bank was a significant reason for this growth. This merger alone accounted for $3 billion of the asset growth between September 2002 and September 2003.

Growth in assets and deposits was not the only good news to come from the banking industry in 2003. The net income of Missouri's state-chartered banks increased by $59 million for the first nine months of 2003, as compared to the same period in 2002. The return on assets among state-chartered banks was 1.18 percent, the same in 2002. As of Sept. 30, 2003, only four banks, including one that was newly chartered, were unprofitable.

These numbers show a promising trend in Missouri's banking industry and demonstrate the strength of our banks, which helps provide security for depositors and ensures consumer confidence in our banks. It also is interesting and promising to note that there have been more than 30 new state banks chartered in Missouri over the last 10 years. The Division of Finance reports that there have not been any state bank failures in Missouri since 1992. By comparison, 36 Missouri banks closed during the 1980s through 1992; nine closed in 1986 alone.

One factor in the banking industry that directly impacts our economy is the amount of money that Missouri banks loan out to consumers, who in turn invest in our economy through major purchases and investments. On average, the amount that Missouri banks loan out per dollar deposited is higher than the national average, which is a solid boost for Missouri's economy.

We are pleased with the latest statistics from the Division of Finance. These numbers are another piece of good news and another positive indicator as our economy continues its recovery from the national recession.

For more information about the Division of Finance and the banking industry in Missouri, please visit www.missouri- finance.org.