This is the last day of the Beige Book reports. During the past four days, the retail, manufacturing, transportation, energy, and construction sectors have been covered. Today, the banking sector report of the Cleveland Federal Reserve Bank folows.
In general, bankers reported that commercial loan demand was stable or showed modest growth since our last survey. A few bankers commented that although loan originations are up, outstanding balances have declined. We also heard reports from some large banks that lending to small businesses is increasing. On the consumer side, conventional loan demand remains soft, although several of our contacts told us that they are beginning to see early signs of growth. Direct and indirect auto lending continues to show strength, while some weakening was observed in the use of home equity lines of credit. Interest rates for business and consumer credit were stable. Many of our contacts said that demand for residential mortgage refinancing has slowed due to the rise in interest rates. New-purchase mortgage originations remain weak. Core deposits continue to grow, with most of the growth occurring in non-maturing products. Credit quality was characterized as either stable or showing a slight improvement, especially for business applicants. Delinquency rates are stable or trending down. Staffing levels have shown little change during the past few weeks; however, several bankers reported that they are considering hiring during 2011.