Key Industry Trends: Are We in the Eye of the Storm?

Banks are lending less, as is evident in the most recent FDIC earnings report and this is the 5th consecutive quarterly decline in lending.  Businesses and individuals cannot meet the more rigid credit criteria and financials remain in capital preservation mode for a number of reasons .  The pipeline for potential losses remains strong as delinquent loans continued to rise and is at the highest level in more than a quarter of a century. I am concerned about the slowing pace of the reserve coverage build. So, how is it that this economy is recovering?  But, against this persistent challenging backdrop there are enormous opportunities. 

Offsetting the negative credit factors were higher revenues and lower expenses in the third quarter of 2009.  Behind the fee income expansion were gains on asset sales as well as higher servicing fees which were driven by an increase in deposits.  Top line, net interest income rose due to …