Introduction
In a dynamic lending environment, it’s more important than ever to stay on top of market and lending trends. In our report, we found that while commercial lending remains strong overall, there are factors that could create challenges moving forward.
“This report provides valuable benchmarking data for banks to consider as they navigate credit risk identification, regulatory scrutiny, downward trends in CRE sectors, increased delinquency and problem loans, loan concentrations, and loan pricing scenarios.”
Ryan Swope, National Practice Leader
Our Commercial Lending Trends & Risks Report is an essential resource for banks navigating the complexities of the commercial lending landscape. In our first edition, we delve into quarterly and yearly trend information based on FDIC call report data to provide insights, highlight industry trends, and deliver actionable recommendations. Lastly, we provide you with an appendix of asset size-specific benchmarking data to help see how your institution stands against peers.
Key Findings
Based on FDIC call report data, our report found that:
- Since the Federal Reserve began raising rates in early 2022, community banks have experienced significant increases in loan yields and funding costs. Specifically, loan portfolio yields have increased 159 basis points from 4.77% in 2021 to 6.36% in 2024.
- Although delinquency metrics remain moderate, an increase in net charge offs on average loans indicates underlying weaknesses in portfolios.
+11 basis point increase in net charge offs to average loans since year-end 2021
- The number of institutions reporting construction and land development (C&D) loans as a percent of their tier 1 capital plus the allowance greater than the regulatory guidance of 100% has reduced to levels near year-end 2021 levels.
Learn More in Our Full Report
Forvis Mazars understands that banking professionals need access to relevant peer data to help assess institutional performance. Download your complimentary copy of the full report today to better understand recent lending trends and the potential effects they may have on your institution. Plus, receive valuable asset size-specific benchmarking data.