Minnesota banks muddle along

The financial health of Minnesota banks continued to improve in the three months ending in September, but profit growth is weak, and loan volume continues to decline compared to last year. The Federal Reserve Bank of Minneapolis reports 327 Minnesota banks saw a median 4 percent decline in lending over the past year. That's more than twice the rate of decline of banks nationally.

On the plus side, profitability and loan volume were better in the third quarter compared to the April-June quarter--but not by much.

"Improvements in profits and loan growth ... were small this quarter," said Ron Feldman, senior vice president for Supervision, Regulation and Credit at the Federal Reserve Bank of Minneapolis, in a statement. At the same time, measures of asset quality were generally on a positive trend," Feldman said.

The regional Fed says Minnesota banks are still seeing high rates of loan delinquencies but those rates have been coming down.

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