The Federal Deposit Insurance Corp. (FDIC) released quarterly data showing Wisconsin banks started 2024 on solid footing, according to the Wisconsin Bankers Association.
In Q1 2024, lending increased over the prior year in all categories (commercial, residential, and farm loans), demonstrating banks’ responsiveness to their customers’ borrowing needs. High interest rates on certificates of deposit and money market accounts contributed to an increase in deposits both quarter over quarter (0.34%) and year over year (3.97%). While net interest margin has decreased slightly from 3.30% to 3.10% year over year, capital levels are healthy.
While residential real estate loans dropped quarter over quarter (-10.81%), they increased year over year (13.62%). Inventory remains low, particularly as many homeowners refinanced into low-interest rate mortgages in prior years and have little appetite to sell. Homes continue to sell quickly as borrowers have become accustomed to the current home prices and interest rates.
Commercial lending increased slightly quarter over quarter (1.15%) and year over year (1.94%) as business owners cautiously strive for growth, avoiding significant operational changes.
Farm loans increased year over year (7.17%) as farmers looked to upgrade equipment, make capital improvements, or expand.
Past-due loans increased as persistent inflation and high everyday costs stress borrowers; however, the current level of past-due loans remains above recessionary levels.
