The banking sector remains strong despite in dip in mortgage activity and a wave of consolidations, a Northwest Indiana banker said.
Horizon Bank executive David Rose said mortgage activity had consisted of about 20 percent home loans and 80 percent refinancings, but the number has flipped since interest rates have risen.
Interest rates remain low, and businesses can expect to pay about 4 to 6 percent when taking out out loans for capital projects. The low rates have been punishing to net depositors who rely on interest income and in some cases have been forced to dip into capital to cover living expenses.
Banks will likely look at imposing more fees to make up for lost lending income, Rose said. They also have been merging to achieve greater efficiency, particularly when it comes to complying with mounting federal regulations.