Numbers released today by the Federal Deposit Insurance Corporation (FDIC) showed Wisconsin banks remained in a healthy position through the final quarter of 2023. Banks continued to meet the borrowing needs of their customers, as evidenced by year-over-year lending increases in all categories (commercial, residential, and farm loans). Deposits were up both quarter over quarter (1.12%) and year over year (2.00%), demonstrating public trust in Wisconsin banks as safe places to keep money. While net interest margin has decreased slightly from 3.27% to 3.20% year over year, capital levels are healthy. 

Notable indicators include: 

  • Residential loans grew quarter over quarter (7.64%) and year over year (5.62%). With low inventory, homes continue to sell quickly. The Fed did not raise interest rates in the last quarter of 2023, and rates remain good in historical context. 
  • Commercial lending increased only slightly year over year (0.20%) and decreased slightly quarter over quarter (-0.60%) as business owners continue to monitor economic trends and interest rates. 
  • Farm loans increased year over year (10.30%) as farmers looked to upgrade equipment, make capital improvements, or expand. The decrease in farm loans quarter over quarter (-22.31%) reflects seasonal demand fluctuation. 
  • Past-due loans increased as inflation, the lag effect of interest rate hikes earlier in 2023, and slowed income growth presented challenges to borrowers in paying back their loans. Banks anticipated and were prepared for an increase in net charge-offs (loans that are unlikely to be repaid). 

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