"There was a time we could have had our own parade of homes," said Shad Williams, president and CEO of Cheaha Bank.
After the Great Recession hit in 2008 and mass layoffs occurred, banks like Cheaha ended up owning many foreclosed homes from residents who could no longer pay their mortgages. The drop in home payments meant cuts to banks' bottom lines. The weak economy also stunted consumers' interest in loans, hurting banks further.
But in the past couple of years, Alabama banks have seen profits grow as foreclosures have dropped and loans increased, a federal report shows. Some local banks and financial experts say the improvements are indications of economic recovery and expect the trend to continue this year.
According to the Federal Deposit Insurance Corporation's quarterly banking profile, published last week, Alabama banks generated $555 million in net income in the first three months of the year. In contrast, Alabama banks generated $449 million in net income during the same period last year and $180 million in the first three months of 2011.
Also, the FDIC report shows Alabama banks own considerably less foreclosed real estate — $605 million worth so far in 2013 compared to $932 million for the same period in 2012 and $1.42 billion for the same period in 2011.
Williams said his bank has seen considerable improvement in the past year.
"At our bank, profits are up mainly because we've quit bleeding foreclosures," Williams said. "The best way to make money is to quit losing it."
Larry Deason, president of Farmers and Merchants Bank in Anniston, said his bank has also seen improvements, including increases in loan requests.
"And we're seeing a lot less foreclosed homes," Deason said.
Deason said increased regulation has burdened his bank in recent years, not just foreclosures.
"The FDIC is putting tough regulations on banks now so it's making it hard to make loans right now," he said.
Still, Deason said, he expects improvements in the banking industry to continue this year as foreclosures disappear.
"And that should be real good for real estate," Deason said.
Benton Gup, chair of banking at the University of Alabama, said what local and state banks are experiencing is in line with improvements among financial institutions across the country.
"Foreclosures are slowing down as the economy is slowly picking up," Gup said. "The general trend is things are picking up."
Jamie Dexter, spokeswoman for Wells Fargo, which has locations in Calhoun County, said foreclosures are down year over year for the institution in central Alabama.
"More than 94 percent of our customers in Alabama are current on their mortgage payments," Dexter said. "This is higher than Wells Fargo's national average, which is 93 percent."
Not all signs in the report were positive, however. The report showed Alabama banks had fewer employees with 42,219 total workers in the first quarter of the year compared to 43,268 workers during the same period last year.
Williams said his bank has not had any layoffs in recent years.
"In fact, our headcount has been level at 42 employees for the last four years," Williams said.
Deason also said his bank has not had any layoffs.
"Our bank has never cut employees even when the economy went down," Deason said. "But on occasion, we have not filled a position when someone left."
Williams said many of the larger banks might be cutting back employees to trim expenses.
"The two largest expenses a bank has is interest expense on deposits and the second is employment," Williams said.
Gup said newer technologies might also account for some of the employment cuts among certain banks.
"A lot of people are using cell phones now ... to make a deposit for example ... people are finding new ways to do things and that will have a negative impact on employment," Gup said.
Drew Holderbein, district manager for Wells Fargo, whose district includes Anniston, said the bank has seen considerable improvement in the area the past couple of years.
"We've seen over the last few years, business is rebounding and things are going really well," Holderbein said. "From a credit perspective and a lending perspective ... we are seeing an increase of approvals for personal loans, lines of credit, things like that."
Holderbein added that Wells Fargo is hiring in the area, not reducing its work staff.
"A couple of years ago we had to let a few people go ... now we are adding three to five positions by the end of this year," Holderbein said. "It's due to an increase in business and customer demand."
Holderbein said hiring more employees shows Wells Fargo's expectations that business will continue to improve this year.
"We anticipate that trend continuing," he said.
Staff writer Patrick McCreless: 256-235-3561. On Twitter @PMcCreless_Star.