InfoBytes Blog
FDIC issues QBP for 1Q 2022
On July 21, the FDIC released FDIC Quarterly, 2022, Volume 16, Number 3, which analyzes loan performance at community banks in five manufacturing-concentrated states: Indiana, Kentucky, Louisiana, Michigan and Wisconsin. The featured article, Community Bank Performance in Manufacturing-Concentrated States, noted that community banks in these states support their local economies “through a higher share of commercial loans relative to community banks in other states,” including commercial and industrial loans, commercial real estate loans, and construction and development loans. The FDIC also noted that “the manufacturing industry is sensitive to business cycles and recessions, which has direct implications on community banks and has weighed on their profitability through both direct credit exposure to manufacturing firms and indirectly through the manufacturing industry’s impact on the local economy.” Though the agency acknowledged that the manufacturing sector recovered more quickly than expected from the Covid-19 pandemic, credit risks remain for banks in manufacturing-heavy states. The Quarterly further stated that “[t]he manufacturing industry remains susceptible to the risks of plant closure due to the evolving nature of the pandemic, or relocation of firms due to global market pressures as production and demand normalize.”