Among big bank real estate lending, single-family continues to be the brightest area so far in the second quarter, according to findings by analysts at Keefe, Bruyette & Woods.
KBW reports real estate lending turned positive for the quarter, now up $3.7 billion over first-quarter levels (+1% annualized), helped by the continued strength in single-family mortgages for the week ended June 6. In the quarter, single-family loans are relatively hot at large banks, with a 9% annualized rise, while home equity lines of credit and commercial real estate continue to drag on growth, down 9% and 6% annualized, respectively.
Commercial and industrial loans account for the majority of the $51.8 billion increase in total loans so far in the second quarter versus the first. Core C&I balances are $23.4 billion higher from first-quarter levels (+17% annualized) while wholesale loans are stronger following a recent surge in growth, up $20 billion or 22% annualized QTD.
With less than one month remaining in the second quarter, loans at small banks grew $38 billion — a 9% annualized pace of growth over first-quarter levels. Small bank real estate lending continues to lag and has increased only 2% annualized from the first quarter.
So far this quarter, total loans increased 8% annualized. Large banks account for a majority of this growth at 48% and smaller banks contributed roughly 35%, according to KBW.
— Justin T. Hilley