CD rate rises at slower pace for Illinois community banks vs. national peers

The average rate that community banks in Illinois pay on one-year certificates of deposit continues to increase but remains below the national community bank average.

As of Dec. 5, the state's community banks saw the rate on one-year certificates of deposit (CDs) rise 9 basis points from July 26 to Dec. 1 to 1.67%, while the national community bank average increased 20 basis points to 2.23%, according to an S&P Global Market Intelligence analysis.

The Illinois community bank average rate on one-year CDs is higher than the overall state average rate of 1.22% but lower than the overall national average rate of 1.83%.

Significant tightening of monetary policy by the Federal Reserve and liquidity pressure across the banking industry pushed depositories throughout the US to raise deposit rates in 2023. CDs, which banks use to hold on to the most rate-sensitive balances and insulate savings and transaction portfolios from pricing pressure, continued to grow rapidly in the third quarter, increasing 10.1% sequentially. Analysts at Jefferies wrote in a Nov. 13 report that banking heavyweights JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc. and Wells Fargo & Co. all have CD or special offer rates of 5% or more.

Among the 15 largest community banks in Illinois, Banterra Bank offered the highest CD rate at 4.43% while Old Second National Bank, Heartland Bank and Trust Co. and Lakeside Bank were paying the lowest at 0.10% each as of Dec. 1.

Used car loans at Illinois community banks

The average rate that Illinois community banks offer on 36-month used car loans stood at 6.71% as of Dec. 1, below the national community bank average of 7.13%.

Carrollton Bank offered the highest 36-month used car rate among the 15 largest community banks in Illinois at 8.00% while Heartland Bank and Trust Co. offered the lowest rate at 5.49%.

US banks' collective auto loans decreased to $541.47 billion in the second quarter from $546.66 billion in the linked quarter. The auto loan delinquency ratio at US banks rose 22 basis points sequentially in the second quarter to 2.74%.

Mortgage rates surpass national average

The 30-year fixed mortgage rate average at Illinois community banks was 7.39%, higher than the national average rate of 7.37%, the state average of 7.33% and the national community bank average of 7.35% but lower than the state credit union average of 7.44%. The national credit union average rate was 7.36%.

The state community bank average rate rose 52 basis points from July 26 to Dec. 1, while the state average rate was up 44 basis points and the national average rate was up 56 basis points.

In Illinois, First American Bank is the community bank offering the highest rate on a 30-year fixed-rate mortgage of 7.99%, while Old Second National Bank is offering the lowest rate of 7.00%.