U.S. banks reported gains in several commercial loan categories for the third quarter, while credit measures diverged: PNC’s nonperforming loans climbed and Regions’ annualized charge-off rate eased.
U.S. Bancorp had an average commercial loan balance of $150.9 billion in the third quarter, 12.5% above the year-earlier level.
M&T Bank averaged $65.9 billion in commercial and industrial loans, up 7% year over year. Its commercial real estate loans averaged $24.9 billion, up 4%; the bank reports these as separate categories.
PNC reported a 4% increase in average commercial loans from the second quarter, a gain of $10.4 billion. The year-over-year increase was $42.4 billion, with FirstBank loans contributing to it.
PNC closed the quarter with $2.2 billion in nonperforming loans, an increase of $167 million, or 8%, from June. Net loan charge-offs were $257 million, including $35 million associated with moving a student-loan portfolio to held-for-sale.
For Regions, net charge-offs in the quarter came to $72 million, equivalent to 0.29% of average loans when annualized. The rate was 13 basis points lower than in the second quarter. Criticized loans in business services and total nonperforming loans also declined.
The comparisons use different baselines: PNC’s 4% rise is measured against the previous quarter, while U.S. Bancorp’s and M&T’s cited percentage gains are annual. M&T separates commercial and industrial loans from its commercial real estate category.
