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District lending conditions remained tight for both consumers and small businesses during the first two months of 2009. Banking contacts reported, however, that money is available to lend to customers who meet stricter credit standards. Deteriorating economic conditions continue to have a negative effect on consumer loan demand because job insecurity has potential borrowers feeling uneasy about taking on additional debt.
Consumer Lending
Commercial and Industrial Lending
Consumer Lending
In all Sixth District states, the percentage of seriously delinquent subprime mortgage loans (those 90 days past due or in foreclosure) increased from the second quarter to the third quarter of 2008: from 12.4 percent to 14.0 percent in Alabama; from 26.3 percent to 30.3 percent in Florida; from 15.0 percent to 16.2 percent in Georgia; from 13.8 percent to 15.2 percent in Louisiana; from 16.1 percent to 17.7 percent in Mississippi; and from 12.6 percent to 14.1 percent in Tennessee. (Subprime mortgage loans account for 10 percent of all residential mortgages outstanding nationally.)
Commercial and Industrial Lending
Commercial and industrial lending to customers with U.S. addresses for banks headquartered in the Sixth District increased by 20.0 percent in the third quarter of 2008 compared to a year earlier. This increase is due in part to mergers between District banks and out-of-District banks in early 2008, resulting in the consolidation of loans to head office locations in the Sixth District.
