Wisconsin bankers have mixed outlook for 2019

WBA survey shows loan demand still good

Jennifer Provancher has been promoted to president of Wauwatosa-based The Equitable Bank
Jennifer Provancher has been promoted to president of Wauwatosa-based The Equitable Bank

Fifty-four percent of Wisconsin bank leaders expect the state’s economy to remain the same over the next six months, while 25 percent say it will weaken and 21 percent expect it to grow, according to a new survey by the Wisconsin Bankers Association.

Oswald Poels

That’s compared to the end of 2017, when 53 percent of Wisconsin bank CEOs and presidents predicted the state’s economy would grow in the next six months, 45 percent said it would stay the same and 2 percent expected it to weaken.

About 27 percent of Wisconsin bank CEOs and presidents view the state’s current economic health as excellent, up from 9 percent at the end of 2017. Another 58 percent of respondents rated the state’s economy as good, down from 80 percent at the end of 2017. And 15 percent describe the Wisconsin economy’s health as fair (up from 11 percent), while 0 percent rated it poor (flat).

The current demand for business loans is good, according to 65 percent of respondents (up from 59 percent in 2017). Another 26 percent said business loan demand is fair (down from 37 percent), while 5 percent said it is excellent (up from 3 percent) and 3 percent said it’s poor (up from 1 percent).

Over the next six months, 63 percent of bankers expect business loan demand to stay the same (up from 43 percent), 22 percent expect demand to grow (down from 53 percent) and 16 percent expect it to weaken (up from 4 percent).

Commercial real estate loan demand is good, according to 54 percent of respondents (up from 48 percent), with 27 percent describing CRE loan demand as fair (down from 34 percent), 17 percent reporting excellent demand (up from 15 percent) and 2 percent rating it poor (down from 3 percent).

Over the next six months, 52 percent of those surveyed said commercial real estate loan demand will stay the same (down from 53 percent), 26 percent expect it to weaken (up from 6 percent) and 22 percent expect it to grow (down from 41 percent).

On the residential real estate side, 48 percent of respondents said loan demand is good (down from 53 percent), 40 percent said demand is fair (up from 31 percent), 6 percent described demand as excellent (down from 15 percent) and 5 percent said it’s poor (up from 1 percent).

Over the next six months, 62 percent of respondents said residential real estate loan demand will stay the same (up from 56 percent), 28 percent expect it to weaken (up from 6 percent) and 10 percent expect it to grow (down from 38 percent).

Forty-eight percent of respondents said agricultural loan demand is fair (down from 61 percent), 36 percent said demand is poor (up from 14 percent), 15 percent said it’s good (down from 25 percent) and 0 percent said it’s excellent (flat).

Over the next six months, 50 percent of bank leaders said agricultural loan demand will stay the same (down from 64 percent), 42 percent expect it to weaken (up from 23 percent) and 8 percent anticipate it will grow (down from 13 percent).

The survey took place in the first two weeks of December and there were 99 respondents. The WBA is a trade association that represents about 235 commercial banks and savings institutions in Wisconsin, which employ about 23,000 people.

“As predicted in our last survey, 2018 was a great year for Wisconsin’s economy, as well as lending activity. It’s very encouraging to see most bankers believe 2019 will continue that strong performance,” said Rose Oswald Poels, president and chief executive officer of WBA. “Bankers are the best barometers of the economy as they see all segments of every marketplace. They work together with their communities and are the first to see and understand Wisconsin’s economic trends due to their customers’ activities. In turn, our members use that information to help their communities prosper.”

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Molly Dill
Molly Dill, former BizTimes Milwaukee managing editor.