Wisconsin banks post strong Q3 amid gloomy economic outlook

With interest rates rising, Wisconsin bank profitability has increased to a net interest margin of 3.19% in the third quarter of 2022, according to a news release from the Wisconsin Bankers Association. The latest numbers released by the Federal Deposit Insurance Corp. (FDIC) also show that consumers continue to exhibit strong balance sheets as loan defaults remain at historic lows. Among the highlights from the FDIC report:

  • Residential loan demand continued to grow at a steady pace (up 5.25% quarter over quarter and 10.23% year over year) despite rising interest rates, due in part to home prices coming down.
  • Commercial lending saw ongoing strong demand year over year (up 10.04%) although the third quarter, while still positive (up 2.25%), was at a slower pace than the prior quarter as business owners held off on borrowing due to midterm election uncertainty and recession concerns.
  • Credit quality continues to be strong as more borrowers are keeping on top of their payments. Loans and leases 90 or more days past due decreased 19.36% year over year and 2.99% quarter over quarter.
  • The pace of deposit growth has slowed as consumers are tapping into their savings to offset higher prices due to inflation.