• Home
  • Education
  • News and Resources
  • Advocacy
  • Associate Members
  • Contact
  • Search
  • Menu Menu
News
News

Wisconsin Banks Strong Heading into 2022

Rose Oswald Poels

Banks well-positioned to help customers navigate any economic headwinds

By Rose Oswald Poels, WBA President and CEO

As we continue to navigate the evolving health pandemic heading into 2022, Wisconsin banks are well-positioned to serve the varying needs of their customers and communities. Through the third quarter of 2021, Wisconsin’s 176 headquartered banks are financially strong with continued high levels of liquidity that will allow them to meet their customers’ various borrowing needs.

The continued resiliency of the industry was evident in the Federal Deposit Insurance Corporation’s (FDIC) third quarter numbers. Nearly all of the industry is profitable and more than 72% of Wisconsin banks saw earnings gains and good credit quality through the third quarter of 2021. Wisconsin banks also saw a slight increase in net loans in the third quarter compared to the prior quarter, led largely by residential real estate lending; however, on a year-over-year (YoY) basis, lending was down 2.44%.

Overall, loan demand throughout last year was weak, and I expect that to continue for at least the first six months of 2022 and perhaps longer. Commercial loan demand was particularly low as Wisconsin banks saw a more than 23% decline in commercial and industrial loan portfolios in the third quarter of 2021 compared to the same quarter the prior year. This is largely attributed to factors, such as workforce shortages and supply chain issues, that will persist into 2022. These two factors alone have stunted growth in the business sector as many retail businesses are forced to alter their hours of operation and manufacturers to cut back production, all of which results in lower loan demand. In addition, many of these businesses received one or more forms of government stimulus or low-cost emergency loans, resulting in lower demand for traditional loans from banks as their balance sheets remained financially healthy.

The agricultural sector is expected to have a growth in profitability in the coming year in part to having received government stimulus or low-cost emergency loans over the last few years as well as having experienced a strong year last year. Farmland loans remained at nearly the same levels in the third quarter of 2021 compared to both the prior quarter and the same period in the previous year. Farm loans rose by 3.26% compared to the prior quarter but were down 7.83% compared to the third quarter in 2020. According to the national Fall 2021 Agricultural Lender Survey produced jointly by the American Bankers Association and Farmer Mac, agricultural lenders expect 70% of their borrowers to be profitable through 2022.

Wisconsin banks continue to be a safe place for consumers to keep their money, as evidenced by a 10.42% YoY climb in deposits from the third quarter of 2020 compared to the third quarter of 2021. I expect these deposit balances to remain high as economic headwinds in 2022, notably inflation and the Omicron variant of COVID-19, will likely cause stock market fluctuations that often make investors nervous.

Despite these economic challenges, I expect the Federal Reserve to raise interest rates only once during 2022, which will impact the banking industry’s profitability. With continued weak overall loan demand and the prolonged low interest rate environment putting pressure on the net interest margin of Wisconsin banks, 2022 could be a more difficult year for the banking industry. Nonetheless, with the industry’s strong financial condition, banks are positioned well to weather the upcoming year.

—

Founded in 1892, the Wisconsin Bankers Association (WBA) is the state’s largest financial industry trade association, representing more than 200 commercial banks and savings institutions and over 21,000 employees.

The Association represents banks of all sizes from banks in rural Wisconsin to the state’s largest financial institution in Green Bay, and nearly 98 percent of banks in the state are WBA members.

Print 🖨
January 3, 2022/by Hannah Flanders
Tags: COVID-19, Economic Forecast, Economy, FDIC, Midwest Economic Forecast Forum
Share this entry
  • Share on Facebook
  • Share on Twitter
  • Share on WhatsApp
  • Share on Pinterest
  • Share on LinkedIn
  • Share on Tumblr
  • Share on Vk
  • Share on Reddit
  • Share by Mail
https://www.wisbank.com/wp-content/uploads/2021/12/wi-economic-report-banner.png 453 1484 Hannah Flanders https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Hannah Flanders2022-01-03 03:34:132022-01-03 21:42:51Wisconsin Banks Strong Heading into 2022
You might also like
WBA Wisconsin Economic ReportLeading with Optimism Through Challenge
Impact of CARES Act on Retirement Accounts
Triangle BackgroundFDIC Numbers Show Positive 2022 Year-End Position of Wisconsin Banks
WBA Wisconsin Economic ReportWBA Releases Wisconsin Economic Report
Triangle BackgroundWisconsin Banks Remained Strong in Q3 2022 Despite Uncertain Economic Outlook
Triangle BackgroundSpecial Edition Executive Letter: WBA’s Response to SVB Failure
FHLBank Chicago Announces 2022 Community First® Award Program and Affordable Housing Program
FDIC Quarterly Numbers Show a Strong Finish in 2021

Categories

  • Advocacy
  • Community
  • Compliance
  • Credit Unions
  • Education
  • Member News
  • News
  • Products
  • Resources
  • Uncategorized

Recent Posts

  • Nelson Celebrates 30 Years at National Exchange Bank & Trust
  • Bakalars to Retire
  • PWSB Mortgage Lenders Receive the Five Star Mortgage Professional Award
  • Executive Letter: Wisconsin Supreme Court Upholds Priority of Secured Creditor Under Receivership Rules
  • Peshtigo National Bank Announces Promotions

Archives

  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • December 2020
  • November 2020
  • October 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • May 2019
  • April 2019
  • March 2019
  • November 2018
  • September 2018
  • August 2018
  • June 2018
  • April 2018
  • March 2018
  • January 2018
  • November 2017
  • October 2017
  • September 2017
  • May 2017
  • April 2017
  • December 2016
  • November 2016
  • August 2016
WBA logo
  • About
  • Community
  • Subsidiaries
  • Staff

questions@wisbank.com

608-441-1200

4721 S Biltmore Ln.
Madison, WI 53718

Get our Newsletter!
Subscribe

© 2023 Wisconsin Bankers Association. All rights reserved. | Website Design by Bizzy Bizzy
Tech Will Help Drive Economy in Unpredictable YearWBA Wisconsin Economic ReportIt’s Time to Take Action in 2022
Scroll to top

This site uses cookies. By continuing to browse the site, you are agreeing to our use of cookies.

OKLearn more×

Cookie and Privacy Settings



How we use cookies

We may request cookies to be set on your device. We use cookies to let us know when you visit our websites, how you interact with us, to enrich your user experience, and to customize your relationship with our website.

Click on the different category headings to find out more. You can also change some of your preferences. Note that blocking some types of cookies may impact your experience on our websites and the services we are able to offer.

Essential Website Cookies

These cookies are strictly necessary to provide you with services available through our website and to use some of its features.

Because these cookies are strictly necessary to deliver the website, refusing them will have impact how our site functions. You always can block or delete cookies by changing your browser settings and force blocking all cookies on this website. But this will always prompt you to accept/refuse cookies when revisiting our site.

We fully respect if you want to refuse cookies but to avoid asking you again and again kindly allow us to store a cookie for that. You are free to opt out any time or opt in for other cookies to get a better experience. If you refuse cookies we will remove all set cookies in our domain.

We provide you with a list of stored cookies on your computer in our domain so you can check what we stored. Due to security reasons we are not able to show or modify cookies from other domains. You can check these in your browser security settings.

Other external services

We also use different external services like Google Webfonts, Google Maps, and external Video providers. Since these providers may collect personal data like your IP address we allow you to block them here. Please be aware that this might heavily reduce the functionality and appearance of our site. Changes will take effect once you reload the page.

Google Webfont Settings:

Google Map Settings:

Google reCaptcha Settings:

Vimeo and Youtube video embeds:

Privacy Policy

You can read about our cookies and privacy settings in detail on our Privacy Policy Page.

Terms of Use
Accept settingsHide notification only

Subscribe

* indicates required








Membership