The senior vice president of the Federal Reserve Bank of St. Louis said year-end results from 85 local banks mirror improvements in banks nationally, calling it “a watershed year.”
Julie Stackhouse noted that seven of the 85 banks took negative provisions, meaning they dropped money to the bottom line that they had been holding for possible bad loans in the future. Shedding provisions is an indication of improving capital strength and credit conditions.
Stackhouse said a decision to take a negative provision is not the bank’s alone — it is made in consultation with its government regulator. “That’s a significant event,” she said. No banks have failed in St. Louis since Truman Bank in September 2012.