MADISON, Wis. (WSAU) -- State financial officials say Wisconsin's banks are doing very well this year.
Financial institutions secretary Peter Bildsten says a key indicator for bank health is how much capital they have on hand compared to how much they're lending. "The average capital ratio for Wisconsin state-chartered banks through the first half this year stands at 11.71 percent. Now that's the highest in a decade or so, certainly since before the Great Recession." That's important when banks were dangerously low on cash on hand after the Recession hit. "By historical standards, any capital levels over 11 percent really reflect the financial health and strength of a bank."
Even as capital is up, so too are total loans, with overall lending up 5.1% over this time last year. Bilsted says he's happy to see more loans and more cash in the community. "As the loan portfolios get better and better, I think it's easier to reach out and take on, I won't say a little more risk, but increase your appetite for making loans." Overall, past due loans are down to 2.19%, down from 2.83%.
Bilsted all of these factors are pointing towards a return to normalcy for community banks in today's economy. "Current lending standards really reflect the typical lending requirements that were basically in place before decades, before the 2006 and 2007 runup where everyone, borrowers and lenders both, got a little crazy."
The numbers released last week come from the annual report from the FDIC.