After years of tightening regulations following the financial meltdown, new data released Monday showed large banks have slightly eased credit standards for mortgage loans over the past three months. The Federal Reserve’s survey of senior loan officers showed banks eased standards on both residential mortgage loans as well as on auto loans, while credit card lending remained little changed. The Fed surveyed 96 banks, including 23 U.S. branches of foreign banks.
While that’s great to know from a national perspective, The Federal Reserve, Federal Deposit Insurance Corp., Office of the Comptroller of the Currency, and the Federal Financial Institutions Council all maintain websites brimming with financial data you can use to explore the local economy in your market. After reading that some banks eased lending standards over the past three months, consider digging into whether any banks in your market have boosted mortgage lending.
Not sure which banks exist in your market? A great place to start is the FDIC annual Deposit Market Share Report. The report lists all FDIC-insured institutions by metropolitan statistical area or state, the number of branches for each institution, the amount of deposits and the percentage of the bank’s deposit market share for any geographic area (state, county, city, zip code). You can even customize the geographic area by selecting multiple counties, zip codes and cities by holding down the control key when selecting within the list box. The report provides a great starting point to familiarize yourself with the largest banks in your market by deposit market share and to find community banks.
Once you’ve listed banks in your area to investigate, you can utilize quarterly call data from the Federal Financial Institutions Council to dig into each bank’s performance. From the first drop-down menu, select either call data or uniform bank performance report. Both reports contain the same data, but the uniform bank performance report offers an easier format for looking at the historical performance of a bank. The cover page will show the bank’s address, regulator, when the bank was established and the peer group for the bank. For example, the largest groups of banks have assets greater than $3 billion. (Hint: in banking, loans are assets and deposits are liabilities).
The income statement shows the bank’s performance for the last quarter and prior years. A bank’s main business (lending money) is totaled as total interest income, and its expenses are listed as total interest expenses. Total net income (the quarter’s bottom line) is located near the bottom of the income statement. The balance sheet provides a detailed breakdown of all of the bank’s assets and liabilities. On this page, you can learn whether a bank has increased residential or commercial lending and where the bank makes the bulk of its money.
Up next: digging into insider loans and uncovering risky financial practices