On the front page, above the fold in the April 4th edition of American Banker, a graph is prominantly displayed that shows compelling growth in C&I lending from September 2010 through the first quarter of this year. The accompanying story on page 10 includes related graphic details, but you'll need your AB credentials to read the full article.
While the trend looks comforting, it probably left most bankers wrinkling their brows, wondering why they haven't seen anything like that in their own board reports. Here's why:
Loan growth in 2011---especially C&I---occurred almost exclusively at banks with greater than $10B in assets...which accounts for about 140 institutions. Banks with asset levels between $100MM and $1B saw overall growth only in ag lending, while banks with assets between $1B and $10B experienced some moderate growth in C&I. Those $100MM to $1B institutions fortunate enough to be located in the farming belt saw minor growth in ag...but nowhere else.
A tip of the hat to Rick Boals, senior strategist at Bank Intelligence for this illuminating research, gleaned from the Fed's Beige Book.
2011 ended with roughly 7,200 chartered financial institutions insured by the FDIC. The majority of those institutions saw their loan portfolios decline throughout the year--either intentionally through deleveraging, or unintentionally through pay-offs and amortization. Loan growth remains a challenge for community banks, despite what 'overall' trends may present.