For more information, contact Jason Busch
608-441-1237 or jbusch@wisbank.com
Bank lending again outpaces national average; Deposits increase
(MADISON) High unemployment and poor economic conditions continued to contribute to a decline in bank earnings, according to consolidated 4th quarter performance numbers released today by the Federal Deposit Insurance Corporation (FDIC). But despite the strong economic headwinds, three out of every four Wisconsin banks made a profit last year, total deposits grew and lending again outpaced the national average.
“Bank customers throughout the state continue to feel the sting of this moribund economy, and the latest quarterly numbers are a clear reflection of that,” commented Kurt R. Bauer, president/CEO of the Wisconsin Bankers Association (WBA). However, he said Wisconsin banks aren’t backing down from these challenging economic times and they continue to work with distressed consumer and business customers, and add to their loan-loss reserves.
“Consolidated bank performance numbers are just a snapshot of bank activity between October and December 2009. You can’t necessarily use them to predict the future. Nevertheless, bank performance numbers typically lag other economic trends, so as the economy struggles to rebound banks could continue to see challenging earnings throughout 2010.”
At 96 percent, the Wisconsin banking industry’s consolidated loan-to-deposit ratio proves that banks continue to make good loans to qualified borrowers, according to Bauer. “For every dollar deposited in a Wisconsin bank, 96 cents is being lent back into the community,” he explained. Nationally, that same ratio dropped to 79 percent.
Bauer cautioned state and federal policymakers to refrain from making a bad situation worse by enacting laws that hurt banks’ ability to meet loan demand to job creating businesses.
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The Wisconsin Bankers Association is the state’s largest financial industry trade association, representing nearly 300 commercial banks and savings institutions, their nearly 2,300 branch offices and 30,000 employees.
