The Post and Courier, Charleston, S.C., John McDermott column
|By John McDermott, The Post and Courier, Charleston, S.C.|
|McClatchy-Tribune Information Services|
But one of their most powerful profit engines of the past few years began to sputter as they crossed the finish line.
A new report shows that banks statewide earned
Not too shabby.
"I think the overall fundamental earnings continued to show improvements," said
But it also shows that while most
One of the main culprits is the abrupt but long-anticipated slowdown in the mortgage business. Other factors include tepid loan demand from commercial borrowers and mounting competition.
The pullback is reflected in the latest numbers from
A big contributor was a drop-off in the fees that lenders charge when they refinance or originate real estate loans, said
"In the fourth quarter ... the mortgage origination business collectively started falling off," he said.
The trend isn't isolated to
Industry heavyweights Wells Fargo,
The uptick in interest rates over the past year is partly to blame for the slowdown. Also, the pool of borrowers isn't nearly as big as it was a few years ago.
"What you really saw was the refinancings of the refinancings of the refinancings dried up," Hassell said.
At the same time, local home sales are still on the upswing. But demand for those mortgages are relatively limited in terms of volume, meaning they can't completely offset the diminished profits from refinancings.
Another curious rub for the industry is that demand from business borrowers remains lackluster, even though the local and national economies are improving. "Commercial lending is certainly not robust," Hassell said. "But we're hoping that as our economy continues to improve, we'll be making loans predicated on an improving economy. We're just not seeing that yet."
"The commercial market is slower to come back," he said.
Even so, the region has become a hotbed in recent years for out-of-town banks looking to make inroads in the
"If it's under
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