Financial Services - July 2008Data and Analysis
Financial market conditions changed little in July. Tighter lending conditions and higher foreclosure rates continued to exert pressure on consumers in the District. Credit card lending was also higher. Bank earnings were under pressure in the second quarter.
The percentage of seriously delinquent loans in the subprime mortgage segment remained high in the first quarter of 2008 but appeared to be leveling off in all states in the region other than Florida: 12.0 percent (up from 11.9 percent in the fourth quarter of 2007) in Alabama; 22.2 percent (up from 17.5 percent) in Florida; 14.6 percent (up from 13.6 percent) in Georgia; 13.6 percent (up from 13.2 percent) in Louisiana; 16.2 percent (down from 16.4 percent) in Mississippi; and 12.4 percent (up from 12.2 percent) in Tennessee. The increase in Florida was, again, the largest among District states—a nearly 5 percentage point increase from the fourth quarter.
Data for banks headquartered in the Sixth District indicate that loans secured by real estate increased in the first quarter of 2008 compared to the first quarter of 2007. Credit card debt extended by District banks increased in the first quarter of 2008 compared to a year earlier and has been growing since the first quarter of 2007.
Commercial and Industrial Lending
Data for banks headquartered in the Sixth District indicate that commercial and industrial lending increased by 8.7 percent in the first quarter of 2008 compared to a year earlier.