Financial Services - March 2009Data and Analysis
District lending conditions remained tight for both consumers and small businesses during the first quarter of 2009. Banking contacts cite a lack of loan demand, uncertainty of real estate values, and continued heightened credit analysis as factors restraining the current lending market. Both businesses and consumers are reluctant to take on additional debt as they try to accumulate cash.
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 15.8 percent in the fourth 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 2008, resulting in the consolidation of loans to head office locations in the Sixth District.