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In 2000, Arrow Financial Corp.'s asset quality was the best it has been in CEO Thomas Hoy's memory.
But at KeyCorp, the story was different. in the fourth quarter alone, KeyCorp's non-performing loans increased by $58 million, reflecting "the impact of a weaker economy," according to a statement from the Clevelandbased company.
The situation at KeyCorp (NYSE: KEY), parent of KeyBank N.A., appears to correspond with what has been reported nationally. In a January survey of senior loan officers, the Federal Reserve found in creasing numbers of banks tightening their standards for both business and consumer loans. According to a Fed release, the banks cited the worsening economic outlook and a reduced tolerance for risk as the primary reasons for the tougher underwriting criteria.
A few weeks earlier, Weiss Ratings Inc. of Palm Beach Gardens, Fla., had reported that non-performing loans at the nation's banks increased 15 percent in the first nine months of 2000, which compares to 2.9 percent growth in A of 1999. Non-performers, defined as credits at least 90 days past due or in nonaccrual status, were at their highest level in three years.
Locally, the story is much different. Executives at Capital Region banking companies say that while they are monitoring the situation closely, they have seen no deterioration of asset quality and have no plans to tighten their purses.
"Our asset quality in 2000 was as good as I've ever seen it," said Hoy, of Glens Falls-based Arrow (Nasdaq:...