Financial Services - June 2008Data and Analysis
Through the first quarter of 2008, tighter lending conditions characterized most Sixth District credit markets. Credit was more expensive, and lending requirements were more stringent. Deposit growth at District banks remained constrained. Increased rates of foreclosure were noted in most parts of the District. The percentage of seriously delinquent subprime loans also increased in the Sixth District.
Data from the Mortgage Bankers Association show that the percentage of seriously delinquent loans in the subprime mortgage segment increased significantly in Florida in the first quarter of 2008 compared to fourth quarter of 2007, while for all other District states the increase was less than 1 percentage point.
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: 12.04 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.