FDIC assets increased 1.1 percent this quarter

Total assets under peak from first quarter in 2013

(July 10, 2014) — A severe winter certainly stymied activity to some degree early this year, when FDIC indicators reflect the Kentucky economy holding steady at best and perhaps taking a slight dip. The FDIC quarterly state profile for Kentucky issued recently has interesting statistics that depict the lingering economic doldrums still holding sway even more than four years after the official end of the Great Recession.

Total assets at Kentucky’s 184 FDIC-insured entities increased 1.1 percent to $55.4 billion in the first quarter of 2014, growing almost $600 million from the fourth quarter of 2013. However, total banking assets are under their recent peak of $55.45 billion in 1Q13 and are less also than the $55.43 billion level of two years ago in 1Q12.

The number of financial institutions is down – a nationwide trend – from 192 in the first quarter of 2012; several mergers and acquisitions and one outright closure trimmed the commonwealth’s number of banks to 184.

Kentucky’s unemployment rate was 7.8 percent for the first quarter of the year, an improvement from the 8.3 percent rate for all of both 2013 and 2012. Two-thirds of the state’s workers are in the Private Service-Producing sector, which grew 0.3 percent over 12 months; 18 percent work for Government, also up 0.3 percent; 12 percent are in Manufacturing, which decreased 0.8 percent; and 5 percent work in the Other (non-manufacturing) Goods Producing segment, down 0.1 percent.

Kentucky’s home price index decreased 0.3 percent in Q1, giving back some of its 1.1 percent increase in 2013 and 0.7 percent in 2012. The FDIC shows the number of commonwealth single-family home permits declining 7.5 percent for Q1 2014 from a year earlier, a slowdown in the home construction recovery that has been occurring the past few years: Permits were up 29.5 percent in 2013 after having increased 11.7 percent in 2012.

Multifamily housing starts are up sharply again, however, increasing 123.1 percent in the first quarter after having grown only 1.8 percent in 2013 on the heels of a 38.2 percent increase in multifamily housing permits in 2012.

Kentucky’s five main banking deposit markets, with the exception of Lexington, are on its borders and part of multistate metro areas. Northern Kentucky is within the tri-state Cincinnati market where as 2013 ended, 74 institutions reported $74.5 billion in deposits. That’s more than three times the $22.6 billion in deposits that the Louisville (Kentuckiana) market’s 42 institutions reported.

Lexington’s 34 institutions reported $8.6 billion in deposits. The Kentucky-Ohio-West Virginia market that includes Ashland reported $5.5 billion at 30 institutions. The Evansville, Ind., market that takes in Henderson and Owensboro institutions among its 22 reporting financial entities had $4.6 billion in deposits.