New Jersey was hit especially hard. The state's banks lost a collective $750 million last year, compared with a profit of $864 million in 1989.
Only 62 percent of New Jersey's banks were profitable last year, the consulting firm said. That put the Garden State 45th among the 50 states.
The percentage of profitable New Jersey banks also represented a steep decline from 1989, when 85 percent of the state's banks showed an annual profit.
Write-offs for the New Jersey banks surged to $1.1 billion, up from $331 million in 1989. Write-offs are taken from reserves for loan losses, which are replenished with money subtracted from banks' profits.
In part, New Jersey banks suffered more because the state was hit harder in the current real estate slump, according to one banker.
Pennsylvania fared better. The Keystone State placed 23d in profitability among the 50 states in 1990, with almost 90 percent of its banks displaying black ink. Overall bank profitability was $690 million, down 45 percent from 1989.
Bad-loan write-offs in Pennsylvania rose to $1.6 billion in 1990 from $1.1 billion the previous year.
Bankers said both states still were mired in the real estate slump along the Eastern seaboard. Primarily because of soured real estate transactions, problem loans at New Jersey banks doubled, to $3.8 billion. In Pennsylvania, the increase was 50 percent, to $3.1 billion.
Robert L. Stevens, president of Bryn Mawr Trust Co. on the Main Line, said construction loans on real estate were the major culprit in problems at his bank.
"We had $18.3 million in nonperforming assets at the end of last year," Stevens said, referring to the bank's problem loans. "Of that, $13.7 million was residential-construction loans."
Some bankers are cautiously optimistic that the worst is over. They note that the area real estate market has shown signs of revival recently.
