Illinois saw a 20 percent drop in the number of problem banks and thrifts in 2013, compared with a year earlier, a report from the Office of the Comptroller of the Currency revealed Tuesday.
The pace of decline in Chicago was among the most noteworthy, the agency said.
The agency supervises 148 banks and thrifts in the state with assets of $39.7 billion. It has five offices in Illinois, including three in Chicago, one in Champaign and one in Peoria.
More than 80 percent of the financial institutions in the state had a top composite rating of 1 or 2 last year on a five-point scale.
“Community banks and thrifts supervised by our Chicago team had been in survival mode for several years,” Nathan Perry, assistant deputy comptroller, said in a statement. “The level of problem banks has declined as risk management practices improved. Additionally, improvements in the real estate market and overall economic conditions have helped banks to work out of problem assets.”
Asset quality ratings are satisfactory or better at three of four Illinois banks and thrifts. Still, earnings are a concern at one-third of them, but the earnings rating at 15 have been upgraded in the past year, and more upgrades than downgrades are occurring.
Commercial real estate loan exposures are moderating, but they remain problematic for about 25 percent of the state’s financial institutions that have a 5 percent delinquency rate or greater for their commercial real estate or commercial construction portfolios.