Credit quality

A paper released by the agency’s Center for Financial Research says aspects of someone’s digital footprint — including whether they use Apple or Android — help predict likelihood of default.

“Who’s to know when the economy may turn?” the head of the Alabama bank said in describing its weak business-loan growth as the byproduct of cautious pricing and underwriting.

Delinquencies have held steady for a year, and observers are optimistic about upcoming third-quarter data. But the long-term question is whether solid underwriting can overcome higher vehicle prices and consumer debt burdens.

The number of consumers being pursued by debt-collection agencies fell dramatically in the past year, but it's as much technicality as achievement, and bankers need to keep that in mind when reviewing the credit scores of millions of Americans.

Good credit analysts are in short supply, says David Nicholson, a senior VP of commercial lending at a community bank. But fair warning for job seekers: Only dogged questioners who can think critically need apply, because vetting business borrowers is as much art as science.

The onset of artificial intelligence and machine learning could serve as the safety net some companies need, providing a different and more thorough twist on traditional underwriting and credit checks.

The Stamford, Conn., issuer of store credit cards has two potential options after the retail giant chose to partner with Capital One. But the decision over which path to take is out of its hands.

The Oklahoma bank’s net charge-offs were its second-highest in the last five quarters, but the company said it was confident in its credit quality outlook and growth prospects from a pending acquisition.

As the company boosts originations to subprime and other borrowers, it remains to be seen if the improvements in asset quality will continue. A similar question mark is hanging over many consumer lenders these days.

Credit card and auto loans grew again in the second quarter at the McLean, Va., company, and the net charge-off rates of both business lines fell, too.

Repayments on acquired residential mortgage loans were the main reason, but other bottom-line boosters more than made up for that, the Buffalo, N.Y., bank said in reporting second-quarter results.

The Mississippi company said it has recorded most of the expected charge-offs tied to the last severe decline in oil prices.

Declines in corporate banking and energy loans were part of the reason loan growth was light, but the Dallas bank reported strong earnings thanks heavily to fatter margins.

Good times end eventually. And it is inevitable that some new approach to banking will cause financial institutions to fall flat in a downturn.

Provident Financial said it increased its allowance against a commercial loan after discovering that the borrower overstated the value of its collateral.

Virginia National will set aside up to $950,000 to cover losses after ReliaMax, a firm that issues surety bonds for student loans, was placed into liquidation.

The advisory vote came two weeks after Preferred Bank in Los Angeles disclosed a major loan default.

There are so many reasons — the credit cycle, the plight of small banks or competition from Amazon and foreign banks — that the head of JPMorgan could live to regret that statement.

Dark clouds may not yet be on the horizon, but industry executives are sending the message to investors that they know a turn in the credit cycle is coming, and they are planning accordingly.