From the Record:
Toxic loans held by New Jersey-based banks continued to climb in the second quarter even as bad loans at U.S. banks declined, according to new government data.
The Federal Deposit Insurance Corp. said Tuesday in its quarterly industry profile that loans more than 90 days past due or no longer accruing interest at New Jersey’s 117 banks and thrifts rose to 3.61 percent of total loans as of June 30, up from 2.91 percent a year earlier. Those banks’ combined seriously delinquent debt climbed in each of the past four quarters.
Meanwhile, the combined bad loans at the nation’s 7,513 banks fell to about 4.4 percent of the total, down from 5.2 percent a year earlier, the fifth straight quarter of declines.
Paramus-based Hudson City Savings Bank, the largest thrift based in New Jersey and a high-end residential mortgage lender, had 123 foreclosed properties on its books at the end of June, up from 52 a year earlier.
A weak economy, persistent high unemployment and a slow foreclosure process have all contributed to the recent rise in bad loans throughout the state, said Bill Brewer, partner at the Livingston office of Crowe Horwath LLP, a community bank auditor. “Banks have had a hard time moving this stuff off the books,” he said. “The banks have the capital to withstand this, but it is a continuing problem.”
Increased delinquencies have been across the board with weakness in residential mortgages, commercial real estate loans and other types of business and consumer loans, Brewer said.
Kevin Cummings, chief executive officer of Short Hills-based Investors Savings Bank, said New Jersey is “feeling the pains of an old-fashioned recession.”