With few exceptions, U.S. banks have been reporting lower earnings and in some cases deeper losses for fourth quarter 2008. But they continued to lend during the period, too. JPMorgan Chase chairman and CEO Jamie Dimon reminded analysts during the bank’s quarterly earnings call: “[In] the press release we announced also that in the quarter we extended new credit of over $100 billion because there have been a lot of questions out there about whether banks are making loans. I think we’re speaking for lots of banks here, people are out making loans,” according to a transcript on Seeking.Alpha.com. “This quarter alone I think we did four million new credit cards, so we extended credit card loans, corporate loans, middle market loans, we bought a $1.4 billion bond issue when no one else would bid on it from Illinois.” Dimon noted that “in some businesses the loan demand is actually dropping rather dramatically.”


JPM Chase was also been active “in the interbank market; we have had on average $40 billion or $50 billion out and into the bank market,” Dimon observed. “So people ask are banks lending to each other, well I think some are and trying to help the system that way.” The CEO would not differentiate between extensions of credit agreements and new relationships, insisting that “renewals of credit are credit and I don’t want to get into the game to act like we’re obligated to renew credit all the time…but you will see us give some numbers like that, in middle market, large corporate, even our investment portfolio.” And Chase “probably bought more mortgage securities then the government did this quarter,” Dimon said.

Fifth Third CFO Ross Kari told analysts that his institution’s average loans in the final quarter of 2008 “were up 8% on a year-over-year basis and essentially flat from the third quarter.” The bank expects “lower credit costs going forward given our expectations and positioning today.”

City National Corp. saw its total loans in the fourth quarter rise at “an annualized rate of just over 5%,” according to CFO Christopher Carey, “so they're still growing but at a slower rate, one that reflects the weakening economy.” Mike Descheneaux, CFO at SVB Financial Group, said the bank “finished the year the way we started it, with strong growth in the fourth quarter. Average loans grew 7.5% to 5.2 billion in the fourth quarter, primarily as a result of loans to our hardware and software clients. This growth was partially offset by decreases in loans to venture capital funds for capital calls.”

Economic conditions, combined with stricter lending practices, restrained credit during the quarter, and that trend is expected to continue. In the understated words of Wayne Hall, evp and CFO of First Financial Holdings Corp., “Presently, we anticipate loan growth to moderate during fiscal 2009.” But there’s little evidence of a credit crisis in the U.S., at least not yet.

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