Wisconsin banks post strong first quarter
First-quarter profits rose 22 percent for Wisconsin-based banks as lending increased and corporations benefited from a lower federal income tax.
The 210 banks headquartered in the state together generated net income of $342 million in the first three months of 2018, compared with $280 million in the first quarter last year, a report Tuesday from the Federal Deposit Insurance Corp. shows.
Total loans and leases grew by almost 5 percent from the same period in 2017, to about $81.8 billion, according to the FDIC’s summary report on Wisconsin banks.
At the same time, the percentage of noncurrent loans and leases on the books of Wisconsin banks dropped to 0.83 percent from 1.04 percent.
“Wisconsin bank performance continues to be strong across the board according to the latest FDIC quarterly numbers,” Rose Oswald Poels, president and chief executive officer of the Wisconsin Bankers Association, said in a statement Tuesday. “Lending increased in almost every single category in a year-to-year analysis, with commercial lending showing the biggest growth, 7.8 percent.”
Oswald Poels noted that noncurrent loans dropped to $680 million, down 16 percent. Total deposits grew 1.5 percent to more than $87 million.
In general, banks nationwide had a good quarter. At banks across the U.S., net income totaled $56 billion, up about 27.5 percent from the first period of 2017.
“The banking industry reported another positive quarter. Net income increased on higher net operating revenue and a lower effective tax rate,” said Martin J. Gruenberg, chairman of the FDIC. “Loan balances continued to rise, net interest margins improved, and the number of ‘problem banks’ continued to fall.”
The federal corporate income tax was lowered to 21 percent from 35 percent at the end of 2017, letting banks and other businesses keep more of the money they earn. FDIC data shows the largest bank based in the state, Green Bay’s Associated Bank, paid less in taxes in this year’s first quarter than in 2017’s first quarter even though it made more money in the latest quarter.
Associated posted the highest net income, at $80.1 million.
“Wisconsin’s banking industry reflects Wisconsin’s current healthy economy as well as the overall national trends,” Oswald Poels said. “The current economic expansion is now the second-longest on record. Bankers in the state continue to monitor the economic cycle for any indications of changes in this expansion and are ready to act accordingly.”
Joining Associated Bank in the top five highest net income banks for the quarter were: Racine’s Johnson Bank, $14.7 million; Green Bay’s Nicolet National Bank, $9.7 million; Fond du Lac’s National Exchange Bank and Trust, $7.9 million; and Manitowoc’s Bank First National, $7.3 million.
According to the FDIC, Wisconsinbased banks posting the biggest losses for the first quarter were: The Equitable Bank, of Wauwatosa, $661,000; Markesan State Bank, $262,000; Jackson County Bank, $162,000; State Bank, of Gresham, $132,000; and The Benton State Bank, $124,000.