Consumer Debt

Community Banks Tops for Consumer Loans

According to the FDIC’s Quarterly Banking Profile (QBP) for June 30, 2018, bank industry loans to consumers increased nearly five and half percent from June 30, 2017 to June 30, 2018. Credit card loans, a subset of those consumer loans, increased 7.4% during the same time frame. For the most part, consumers are managing credit card debt well.
Acquiring Credit Unions Wants Banks

Acquiring Credit Unions Want Banks

Last week we reported that the percent of recommended credit unions (i.e. rated 5-Stars or 4-Stars) now exceeds 81% of the total. Of those, 111 that were 4-Star rated last quarter have now earned Bauer’s highest, 5-Star rating. They  can be found on page 7 and on the supplement to this week’s issue.

What we also want to discuss is the growing number of strong  credit unions looking to buy community banks.


UnFare Life for Taxi Cab Lenders

Un-“Fare” Life for Taxi Cab Lenders

On Friday, August 31, 2018, the NCUA liquidated Zero-Star Melrose Credit Union, Briarwood, NY. We have reported several times in the past on Melrose CU, which was the largest taxi medallion lender in New York, and hence in the country.

The origin of taxi medallions dates back to the 1930s as a means to limit the number of cabs on the streets and allow cab drivers to earn a decent living. These medallions…


Risks of Banks Repossessing Property

Risks of Banks Repossessing Property

The OCC closed out the month of August with an updated “Other Real Estate Owned” (OREO, primarily real estate acquired via foreclosure) portion of the Comptroller’s Hand-book. The handbook is intended to provide guidance to examiners but serves as a tool for bankers and real estate investors as well.

The part we honed in on was…


Mostly good news in second quarter 2018 bank results

Mostly Good News in Q2 Bank Data

The FDIC released a mostly positive Second Quarter 2018 Quarterly Banking Profile last Thursday. Net income got a healthy boost from lower tax rates as banks reported net income of $60.2 billion for the second quarter 2018, $12.1 billion or 25.1% higher than second quarter 2017. Had it not been for the new tax rate, net income would have gained $5.6 billion or 11.7%…

The FDIC currently has 82 banks on its Problem Bank List, down from 92 last quarter. Bauer currently has 91 banks on its Troubled and Problematic Report, down from 101 last quarter.


Because Money Doesn’t Grow on Fees

Wish we’d thought of that. But alas, the credit for that slogan goes to JRN listee 5-Star BMO Harris Bank, Chicago, IL. We have reported several times on the excessive fees charged by some banks (JRN 33:08), especially those that cater to our military and their families (a la 5-Star FSNB (formerly Fort Sill National Bank, Lawton, OK, which has a service fee to transaction deposit ratio of nearly 22%, one of the highest of any bank in the nation).

This week, however, we would like to laud community banks that have low service fee charges when compared to transaction deposit dollars.


Fed to Raise Interest Rates Next Month

Fed to Raise Interest Rates Next Month


Last week we reported that, depending on asset size distribution, net interest margins (NIMs) were making gradual headway with help from the Fed’s rate hikes over the past two years. As we look forward to a quarter point increase next month (Sept. 26th) let’s delve into that a little deeper.

Last week we intentionally left Big Banks out of the discussion. The business model for these behemoths is very different from that of community banks, which is our primary focus. But …

No Rate Increase and That is Okay

No Rate Increase, and That’s Okay

The Federal Reserve held interest rates steady at the FOMC’s  two day meeting last week (between 1.75% & 2%) but the six quarter-point increases since December 2016 have slowly and steadily been making their presence known. Net interest margins (NIM) at FDIC-insured banks increased 30 basis points between the first quarter 2015 and first quarter 2018.

While smaller banks are overshadowed by the largest banks, it’s interesting to see that even the smallest community banks have seen improvements in NIM, which for banks with assets less than $100 million went from 3.58% to 3.75% in the past three years.