Wisconsin bank profits down $100 million from last year

But lending has increased year-to-date

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Wisconsin banks reported $811 million in net income in the first nine months of 2016, down from $911 million in net income at this point in 2015, according to the latest Quarterly Banking Profile from the Federal Deposit Insurance Corp.

The Milwaukee Associated Banc-Corp offices.
The Milwaukee Associated Banc-Corp offices.

Persistent low interest rates have plagued the banking industry’s profits, and many institutions have been adding or focusing on new revenue sources.

As of the third quarter, there were 227 banks reporting to the FDIC in Wisconsin, down from 246 in the third quarter of 2015. That’s partly because the number of Wisconsin banks continues to fall, with several high-profile mergers taking place among the state’s community banks as they seek economies of scale and carry out succession plans.

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Wisconsin’s banks employ 21,795 people, down from 22,166 employees in the same period last year.

Total assets were $108.6 billion in the third quarter, up from $105.2 billion in the third quarter of 2015. Aggregate deposits totaled $85.8 billion, up from $83.7 billion in the year-ago quarter.

Total loans and leases were $77.6 billion in the third quarter, up from $74.3 billion in the third quarter of 2015. The state’s banks reported a net loans and leases to assets condition ratio of 70.5 percent, up from 69.6 percent in the same period a year ago.

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Rose Oswald Poels, president and chief executive officer of the Wisconsin Bankers Association, said Wisconsin banks are facing a number of obstacles, including the prolonged low interest rate environment, escalating compliance and technology costs, competitive pressures and the massive increase in bank mergers across the state. Twenty bank mergers were announced in 2016, according to the WBA, up from 12 last year.

“Wisconsin banks continue to show confidence in the economy through stable, steady growth according to the latest FDIC quarterly numbers,” Oswald Poels said. “The latest FDIC numbers continue to highlight the fact that the diversity of Wisconsin’s strong banking industry directly benefits Wisconsin consumers. For over 150 years, Wisconsin banks have been safely helping businesses grow and families prosper, creating thriving communities. Our institutions are healthy, well-capitalized and ready to help keep our economy growing.”

Green Bay-based Associated Bank NA again brought in the highest quarterly net income, with $59.7 million in profits in the third quarter. Associated Bank had $29.1 billion in assets in the most recent quarter.

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Madison-based John Deere Financial f.s.b. had the second-highest net income in the third quarter, at $26.3 million. The institution has $3 billion in assets.

Racine-based Johnson Bank ranked third, with net income of $9 million in the third quarter. Its assets total $4.5 billion.

Wauwatosa-based WaterStone Bank SSB reported $8.1 million in third-quarter net income, and has $1.8 billion in assets. And Milwaukee-based Northwestern Mutual Wealth Management rounded out the top five with $7.2 million in third-quarter profits and $207.1 million in total assets.

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