Smaller banks outperform, the Fed talks to 1,322 consumers and puts their answers on the web
David beats Goliath in Q1 banking
When FDIC Chairman Martin Gruenberg walked through the first quarter’s financial results for banks and thrifts on Wednesday, most of the better news was about smaller players. Community banks’ net income was up 7.4% year-over-year while everyone else’s was down 2.7%. Community bank net interest margin came in at 3.56%, everyone else posted 3.03%. But Gruenberg also hinted that community banks have delivered the better results partly by taking more interest rate risk. Assets longer than three years have drifted from 33% of total assets to 35% across all insured institutions, but the share at community banks has jumped to 50%. More risk, more reward. “This is a matter of continuing supervisory attention,” Gruenberg said.
Consumers tell all about housing
Home prices will rise in the next year, but not as fast as the year before. Housing still looks like a good investment, but opinions are more divided than before. These are two of the main results from the Fed’s annual survey of consumer expectations on housing released today. The NY Fed put 1,322 consumers on the couch about trends in home prices and rents, their probability of moving or buying, their views of mortgage rates and the availability of mortgage credit. The answers differed significantly across age, education, income, region of the country and whether the person answering owned or rented a home. Luckily the NY Fed has put summary answers on the web in a new interactive site. See the Liberty Street Economics blog.