Delinquency Rates at Commercial Banks

The recession that began in March 2001increased delinquencies on residential mortgages only slightly at the 100 largest commercial banks. As shown in the table below, delinquencies as a percentage of outstandings peaked at 2.55 percent in the second quarter of 2001 and have drifted slightly downward to 2.34 percent according to the most recent data from the Federal Reserve Board. As might be expected, credit card outstandings were more vulnerable to the economic downturn. From the first quarter of 2001 to the first quarter of this year, delinquencies on credit cards rose from 4.64 percent to 4.73 percent. However, it should be noted that credit card delinquencies appear to be a leading indicator of a recession in our economy. From the fourth quarter of 1999 to the first quarter of 2001, delinquencies increased from 4.49 percent to 4.73 percent. Delinquencies on other consumer credit declined slightly over the period.

Source: Federal Reserve Board

Data are seasonally adjusted. Delinquent loans are that past due 30 days or more accruing interest as well as those in a non-accrual status measured as a percentage of end-of-period loans.

Data from the Federal Deposit Insurance Corporation show that delinquency rates on loans to individuals declined from the end of the first quarter of 2001 to the end of the first quarter of 2002, except for banks with assets ranging from $100 million to $1 billion. Recall that this was the period of economic recession. To some degree these data are consistent with the results on mortgage loans shown earlier. It is easier to control the quality of mortgage loans and personal loans than on credit cards. Thus, delinquencies on credit cards rose among banks of all sizes except those with assets ranging from $100 million to just under $1 billion. Delinquency rates on credit card loans more than doubled among banks with assets ranging from $1 billion to $10 billion.

Source: Federal Deposit Insurance Corporation