Eye on the States: Consumer Loan Delinquency Declining More in New York

Delinquencies in most consumer loan categories were down at New York State's banks in the first three months of the year, besting the nationwide performance.

However, they remained far above levels of a year earlier.

Statewide delinquency in installment loans dropped 37 basis points from Dec. 31 to 2.15% at the end of March, according to a quarterly membership survey by the New York Bankers Association. The decline was centered upstate, home to most of New York's 184 community banks. The New York City area actually saw a slight increase.

Even with the drop, however, the level of past-due installment loans was still significantly higher than the 1.79% reported in March 1995. There are 211 Federal Deposit Insurance Corp.-supervised banks and savings banks in New York, 184 of which have less than $3 billion in assets.

Banks responding to the survey reported declines in past-due personal loans and consumer credits for cars, home improvement, and boats. Delinquencies on home equity and business loans also declined by as much as 21%, though they too remained higher than the levels reported one year earlier, the survey showed.

"That would parallel our experience," said William E. Swan, president and chief executive of Lockport Savings Bank. "Even though we went up slightly in March, we noticed some decline in a few categories."

The survey results paint a different picture than do national delinquency figures. Analysts and regulators have displayed concern in recent months over higher levels of consumer delinquencies nationally, particularly with credit cards.

At 38 New York banks with at least $3 billion in credit card outstandings, however, delinquencies dropped 151 basis points from yearend, to 3.23% - although the rate was still higher than a year earlier.

A similar survey by the American Bankers Association also showed some decline in consumer delinquencies nationally, but not as much as in New York.

"That's consistent with what we're seeing," said John Adam Kanas, president of Mattituck-based North Fork Bancorp. "It does seem to contradict what we're reading about on the national level."

On the other hand, delinquencies on loans for recreational vehicles and mobile homes, as well as on home mortgages, did rise slightly during the quarter. Home mortgage delinquencies were up 30 basis points to 2.45%, the highest statewide level since September 1994, when the association started conducting the survey. And mobile-home loans past due were up 50 basis points since December.

"In the first quarter last year, early warning signs went up and people at banks responded much more quickly and credibly to the potential for a problem," said Thomas M. O'Brien, president and chief executive of North Side Savings Bank, Floral Park. "Institutions in general have learned to manage their risk profiles much more proactively."

Kevin Timmons, bank analyst at First Albany Corp., said the overall decline is "pretty much what I've been hearing from my banks." He said most bankers have been telling him that, in particular, the ratio of loans past due 30 days and 60 days has decreased.

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