First-quarter 2023 data from the Federal Deposit Insurance Corporation (FDIC) show that Wisconsin banks remained on solid footing even as two out-of-state institutions failed during the period. While deposits decreased slightly at Wisconsin banks, borrowers overall continued to keep up to date on their loan payments. Residential, commercial, and farm loans all increased year over year. Importantly, net interest margin remains strong at 3.30% and capital levels are healthy.
Notable indicators include:
- Residential loans continued to grow, both year over year (16.47%) and quarter over quarter (1.92%). With low inventory, homes continue to sell quickly. Despite recent interest rate increases, rates remain relatively low in historical context.
- Commercial lending increased year over year (11.27%) but slowed in the last couple of quarters as business owners held off on borrowing due to concerns of recession in 2023.
- Farm loans increased both year over year (2.58%) and quarter over quarter (2.06%).
- Borrowers continue to pay down their debt, and noncurrent loans decreased year over year (-15.98%) and quarter over quarter (-1.26%).
- Deposits decreased slightly year over year (-0.70%) and quarter over quarter (-1.56%) as consumers and businesses felt the pressure of inflation on their savings or left traditional banks in search of higher yields elsewhere.
Statement on the release of first-quarter 2023 Federal Deposit Insurance Corporation (FDIC) numbers from Rose Oswald Poels, president and CEO of the Wisconsin Bankers Association:
“Wisconsin banks overall fared very well during the first quarter of 2023 despite the strain on the banking system caused by inflation and rising market interest rates. Banks in our state — and the U.S. banking system overall — have the capital and liquidity to continue to meet the needs of consumers and businesses. This goes to show that Wisconsinites can continue to have confidence that their money is safe in a Wisconsin bank. With respect to the ongoing economic challenges and geopolitical concerns, Wisconsin banks are well-positioned to weather the mild economic downturn that is expected in the remainder of 2023.”
FDIC-Reported Wisconsin Numbers (Dollar Figures in Thousands)
|03/31/2023||12/31/2022||QoQ Change||03/31/2022||YoY Change|
|Net loans and leases||$106,540,141||$105,370,783||1.11%||$94,488,857||12.75%|
|Commercial and industrial loans||$17,700,465||$17,804,684||-0.59%||$15,907,329||11.27%|
|Assets 90+ Days Past Due or in Nonaccrual Status||$406,287||$411,481||-1.26%||$483,579||-15.98%|