Credit quality has been superb, assets have grown and capital levels have been high. But last year, problem loans began eating away at the bottom line, and profit weakened. Banks are definitely tightening their credit standards. I think the bankers are cognizant that they don't want to make it into a credit crunch. Experts believe bad loans will continue to rise this year.
Asset quality is the constant concern.
He expects the year to turn out OK for the industry. Even though the industry faces problems, the mood is still relatively upbeat about prospects this year, especially among smaller banks, which have avoided many of the loan problems that have hurt larger institutions. We are not seeing it. Our loan growth is good, demand still seems to be there, and there are good credits. Provident's goal is continued growth in 2001, which might include expanding through acquisition in Northern Virginia where the company already has branches, Martin said.