According to the FDIC banks are adding more loans to their portfolios this year through the 2nd quarter. The 2.3% jump is the largest since the Great Recession started back in 2007.
The reason for the uptick is not just the obvious higher loan demand, lower loan loss reserves and a loosening of lending terms amidst historically low interest rates. More lending makes sense. It follows a long and growing list of US economic indicators in the last 6 months with telling signs of a better future including higher GDP forecasts, tighter employment rates, low inflation, and the increasing confidence displayed by CEOs and consumers to spend in the first half of 2014.
The biggest benefactor of more lending is likely to be small business owners whose time has finally come. So dust off your banker’s business card and give them a call. You may like what you hear.
Rick Andrade – Investment Banking
Read the article in the Wall Street Journal: