BELOIT — As COVID-19 conditions continue to improve in the Stateline Area, one Beloit area banking executive says the financial sector is just now showing signs of returning to normal after a turbulent 2020 as banks assisted businesses and residents alike in weathering the pandemic.
Blackhawk Bank CEO Todd James said the bank had seen a major influx of savings due to the injections of stimulus dollars, unemployment assistance or payroll assistance.
“What we’ve seen has been a glut of deposits,” James said. “People weren’t traveling or spending money. On the flip side, businesses weren’t investing or expanding and some assistance was used to pay off other debts.”
James said loan demand of all types dropped drastically in 2020, and that shift has caused banks to refocus and find new ways of reaching customers in light of the margin squeeze, highlighting a shift towards revenue generation from mortgage transactions.
“That’s a really big thing facing our industry right now,” James said.
In 2020, James said Blackhawk Bank helped customers refinance loans and generated approximately $290 million that helped over 2,000 customers lock in low interest rates.
Coming off of the pandemic as conditions have improved, James said 2021 has been a “extremely strong year” for banks of all sizes.
“There are opportunities across the board and we’re starting to do things again that we couldn’t last year,” James said.
But the strong turnaround for banking doesn’t stop in Beloit. The Wisconsin Department of Financial Institutions (DFI) reports that state-chartered banks in Wisconsin increased total assets by over $1.8 billion in 2021 compared to 2020 and are up $65.5 billion through the end of March, the time which most recent data was available.
“Wisconsin’s state-chartered banks have helped their customers, small businesses, and communities in need throughout the COVID-19 pandemic while continuing to demonstrate sound financial practices through the first quarter of 2021,” said DFI Secretary Kathy Blumenfeld. “Overall, Wisconsin’s state-chartered banks are financially stable with a positive outlook and a source of strength for the economy. While the financial indicators are positive, banks must remain diligent and continue to work with their customers to meet their financial needs.”
The extension of the COVID-19 pandemic’s Paycheck Protection Program (PPP) loans combined with the low interest rate environment continued to put pressure on the net interest margin, which declined to 3.37% as of March 31. Loan growth since year-end 2020 was 1.44% with net loans growing over $627 million, DFI data shows.
James said he was confident in the future vitality of the Beloit area, referencing the increased demand for construction and strong growth indicators like new housing development, business growth and the expansion of the interstate highway in the area.
“We are optimistic about where things are going as the supply chain issues smooth out as we go along into the latter half of the year,” James said. “I think there’s so much pent up demand there’s going to be really strong economic activity end of this year into next year.”