Moody's Investors Service

last week rated


's latest state bond borrowings Aa2 - better than New Jersey's but below Delaware's and other "highest-quality" states' - and cited the commonwealth's slower-than-average economic growth, along with its politicians' chronic record of voting public workers generous retirement pensions but failing to pay for them, as reasons not to rank it higher.

How slow is it out there? Wall Street bank-watchers say lending has been limp for Philadelphia-area banks lately, not the best sign for future hiring and growth.

At Beneficial Bank, the largest lender based in Philadelphia, lending actually declined slightly in the first few months of 2014 compared with a year ago, Frank Schiraldi, a managing director at Sandler O'Neill + Partners in New York, wrote in a report to clients.

Loans rose slightly, Schiraldi noted, at another Center City-based lender, Republic Bank - thanks to new investment in bank branches, a seeming anachronism at a time when larger banks are shutting offices as customers go online.

At First Niagara, successor to the former Harleysville National Bank, "loan growth slowed a bit" compared with last year, analyst Anthony Polini told clients at Raymond James Equity Research.

Of the central Pennsylvania banks with suburban Philadelphia branches, Susquehanna Bank showed "no loan growth," Sterne Agee analyst Matthew Kelley told clients in a report, while loans declined at Fulton Bank.

Customers Bank, the Phoenixville-based lender headed by former Sovereign Bank CEO Jay S. Sidhu, reported "massive loan growth," up more than $1 billion over the last year, to $4 billion at March 31 - due not to Pennsylvania borrowers but to "aggressive expansion into the metro New York City" apartment finance market, Kelley noted in a separate report.

But Customers' new loans "are being booked at substantially lower rates than maturing loans, while the company is paying above-market rates for deposits as a hedge of sorts against rising rates," warned Matthew Schultheis, bank analyst at Boenning & Scattergood, West Conshohocken.

At PNC, the largest bank based in Pennsylvania, business loans rose 3 percent nationwide over the last year, Raymond James' Polini wrote. At Buffalo-based M&T, which owns the former Wilmington Trust Co. and is a major lender in central Pennsylvania and upstate New York, "commercial loan growth was again a bright spot," analyst Todd L. Hagerman of Sterne Agee told clients.

But at San Francisco- based Wells Fargo & Co., the nation's leading mortgage leader and the dominant bank in the Philadelphia area, property lending hit a "low-water mark," noted analyst R. Scott Siefers of Sandler O'Neill. Even if business quickens later this year, as he expects, "it will not be easy" for the company to meet its profit targets.