After several years of pain and penitence, South Carolina bankers say it's fun to be working in their business again.
The government has some fresh numbers to back up the upbeat banter.
The Federal Deposit Insurance Corp. last week reported that Palmetto State-based banks collectively earned $50 million in the first quarter of 2013, more than double what they earned in the same period a year ago and up from zilch in 2011.
It reflects an industry that's regaining its strength, though still very much on the mend.
Not long ago bankers were spending much of their time dealing with the excesses of the last real estate bubble. Now they say they're back beating the bushes and courting new business to generate profits. While $50 million looks good on paper, it pales in comparison to years past. But it's nothing to sneeze at, either.
First-quarter earnings for South Carolina banks topped out along with the housing market in 2006, when FDIC-insured lenders statewide cleared about $149 million between January and March.
The wheels began to come off that same year, just as the subprime lending crisis began to heat up and demand for real estate began to soften. Profits quickly evaporated, sending the industry into full retrenchment mode.
That's evident from looking back over the past decade. At this point 10 years ago, South Carolina was flush with slightly more than 100 banks employing slightly more than 10,200 workers, according to the FDIC. Combined, they hauled in $113 million during the opening quarter of that year.
The business began to turn for the worse by mid-2007, and the bleeding quickly accelerated from there. The industry's losses totaled $347 million from 2008-11 in South Carolina.
Banks were sold, some by choice, others out of desperation. Still others failed under the weight of too many soured loans.
As of March 31, just 71 FDIC-insured lenders were still headquartered in the state. And that number will slip by at least one this year after Columbia-based SCBT Corp. and the parent of Charleston's First Federal seal their planned merger.
More consolidation is almost guaranteed.
While lending in the first quarter remained flat and margins were thin, most of the figures in the new FDIC state summary provided more evidence that most banks are on their way to recovering from the lost years.
For example, while the number of independent lenders is falling, the head count is edging higher again. The industry employed about 9,430 full-time workers in South Carolina from January to March, or about 400 more than a year ago, the FDIC said.
Also, the ratio of banks that are in the red is on the decline. Money-losers represented 14 percent of the statewide pool in the first quarter, down from 18 percent in 2012.
Finally, defaulted loans and other profit-draining holdings now represent 3.35 percent of total assets, compared to more than 5 percent a year ago.
Banks have issues to deal with down the road, namely how they will react to the inevitable rise in interest rates and the slowing demand for mortgages. But in the here and now, they can point to a decent first quarter, with plenty of room for improvement.
It certainly was more fun than 2007. And 2008. And ... etc.
Contact John McDermott at 937-5572