The Federal Reserve Bank of Minneapolis says the finances of the roughly 360 banks chartered in Minnesota improved for the three months that ended in June.
Profits rose slightly and bad loans declined. And while lending dropped by about a half of a percent overall for the banks, the decline was less than it had been in the previous quarter or a year ago.
Ron Feldman, senior vice president of supervision, regulation, and credit at the Minneapolis Fed, said banks are shaping up.
"The number of banks that supervisors are spending a lot of time with is declining," Feldman said. "The number of banks that supervisors spend less time with or are less worried about is increasing."
Twenty-seven banks are on a list of problem institutions getting extra regulatory attention. A year ago, 33 banks were getting special scrutiny.
Feldman said things are looking up for the banks but they still have a way to go.
"Profitability [is] not great but at least [is] continuing moving in the right direction," he said. "Loan growth [is] still not at the level it needs to be, if you're a banker. But certainly [it's] moving in the right direction."
The banking report excludes banks such as Wells Fargo and US Bank, which are chartered in other states.