The Federal Deposit Insurance Corporation’s (FDIC) most recent data showed Wisconsin banks remained in good health through the third quarter of this year. Year-over-year lending increased in all categories (commercial, residential, and farm loans), demonstrating the responsiveness of banks to meet customers’ needs. Individuals and businesses continue to trust banks as a safe place to keep their money, as evidenced by a slight increase in deposits, both year over year (0.59%) and quarter over quarter (0.95%). Net interest margin has held steady at 3.19% year over year, and capital levels are healthy.
Notable indicators include:
- Residential loans continued to grow, both year over year (25.19%) and quarter over quarter (15.38%). With low inventory, homes continue to sell quickly. Despite interest rate increases, rates remain relatively low in historical context.
- While commercial lending increased year over year (2.36%), it decreased slightly quarter over quarter (-1.61%), showing waning economic confidence of business owners.
- Farm loans increased both year over year (10.30%) and quarter over quarter (7.54%) as farmers looked to upgrade equipment, make capital improvements, or expand.
- Credit quality weakened as inflation, interest rate hikes, and slowed income growth have made it more difficult for borrowers to pay back their loans.
