U.S. commercial banks reported significant balance sheet growth in the first quarter of 2025, with total assets reaching $24.54 trillion, a $436.88 billion increase from year-end 2024, the highest level in a decade. However, this expansion did not translate into strong loan growth. Only 14.2% of the asset increase went into lending, with total loans rising just 0.5% on aggregate. Citibank and Bank of America were the only major banks with loan growth exceeding 1.0%, primarily through commercial and NDFI lending. Meanwhile, aggregate credit card and auto loan balances declined. Analysts have revised loan growth estimates downward for most large banks, with limited improvements expected in the near term.
Amid caution and macroeconomic uncertainty, banks increased holdings in cash and equivalents, with a median rise of 11.0% and an aggregate increase of 2.7%. JPMorgan and Citibank drove much of this growth. Deposit growth outpaced lending, rising 1.3% on aggregate and 1.6% by median. Some institutions reported notable deposit increases, particularly from international sources. Meanwhile, securities holdings remained relatively stable, though banks continued shifting from held-to-maturity to available-for-sale investments. Credit quality remained broadly steady, while pressure persisted in commercial real estate office lending. Noninterest income showed mixed trends, supported by gains from loan sales and investment banking revenue.
