Arizona banks seeing a profit

After considerable pain, downsizing and nearly $1 billion in cumulative losses, Arizona's native banks finally might be turning the corner. The 37 banks still based in the state just wrapped up their best quarter since the financial crisis and recession began, breaking a string of 12 straight quarters during which the majority of institutions here lost money. On balance, the local industry is profitable again, albeit by a razor-thin margin that partly reflects the demise of some of the weakest players. Still, bankers are sensing a silver lining in the latest numbers, and they're not complaining. "It's a good story, a change in the weather," said Stephen Haggard, president and chief executive officer of Metro Phoenix Bank. "The local economy is doing better, with definite improvement from six months or a year ago." As local banks recover, that could make more lending dollars available to customers here, especially small businesses, while improving overall banking services and perhaps even reversing the three-year decline in employment at these firms. Healthy local banks also are in a better position to donate to non-profits and support the community in other ways. Metro Phoenix Bank posted a $624,000 first-quarter profit after basically breaking even one year earlier. The big news is that bad-loan difficulties are easing, at long last. "Problem assets have been dramatically reduced," said Scott Schaefer, president of Meridian Bank, which improved to a $2.9 million first-quarter profit from a loss of $11.1 million a year earlier.

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