Data released by state and federal agencies indicate Wisconsin banks and credit unions are in good financial condition.
Wisconsin’s 107 state-chartered credit unions continue to exhibit sound financial performance as of June 30, 2024, according to the Wisconsin Department of Financial Institutions.
At the end of the second quarter, total assets for Wisconsin’s state-chartered credit unions rose to $65.7 billion. This is an increase of $1.6 billion since year-end 2023. Over the same time period, loans outstanding grew by $570 million, and shares and deposits rose $1.04 billion. This resulted in a decrease to the loan-to-share ratio from 92.40% at year-end 2023 to 91.69%.
In the six months ending on June 30, 2024:
- Net worth to assets increased to 10.55%;
- Delinquent loan to total loan ratio was 0.80%, an increase from the year-end ratio of 0.79%;
- Net income was strong at over $210.5 million, 0.65% return on average assets; and
- Growth ratios were all positive.
Data released Sept. 5 by the Federal Deposit Insurance Corp. shows Wisconsin banks remained in a healthy position through the second quarter of 2024, according to the Wisconsin Bankers Association. Lending held steady or increased in Q2 2024 over the prior year in all categories (commercial, residential, and farm loans) as banks responded to the borrowing needs of their customers. Deposits increased year over year by 2%, due in part to the high interest rates offered on certificates of deposit and money market accounts. The Q2 2024 net interest margin of 3.15% is a slight decrease over the prior year (3.24%) but an increase over the prior quarter (3.10%). Wisconsin banks remain well capitalized.
Notable indicators include:
- Residential real estate loans were up quarter over quarter (15.21%) and year over year (11.55%). With spring being a popular time to move, homes continue to sell quickly. Borrowers have become accustomed to the current home prices and interest rates. Wisconsin’s housing shortage persists, particularly as many homeowners refinanced into low-interest rate mortgages in prior years and have little appetite to sell.
- Commercial lending held steady quarter over quarter (0.75%) and year over year (-0.33%) as business owners await potential interest rate cuts by the Fed and potential economic changes following the November election before making significant operational changes.
- Farm loans increased quarter over quarter (20.59%) and year over year (2.44%) as farmers entered planting season and sought to upgrade equipment, make capital improvements, or manage operational costs affected by tighter margins.
- Past-due loans were elevated year over year (33.76%) as inflation and the high cost of living impacts borrowers. Past due loans eased, however, quarter over quarter (-5.92%), and the current level of past-due loans remains above recessionary levels.
