U.S. Large-Cap Banks: 1Q26 Reserve Analysis: Reserve/loan ratio declines for 4th straight quarter

Research evidence excerpt

U.S. Large-Cap Banks: 1Q26 Reserve Analysis: Reserve/loan ratio declines for 4th straight quarter

Equity Research

13 May 2026

U.S. Large-Cap Banks

1Q26 Reserve Analysis: Reserve/

loan ratio declines for 4th straight

U.S. Large-Cap Banksquarter

POSITIVE

In 1Q26, our composite loan loss reserve grew 2%, rising for U.S. Large-Cap Banks

Jason M. Goldberg, CFAthe 14th quarter in 16. Still, two-thirds of this build was driven

by bank acquisitions. Loans grew 3.6% (+2.2% ex. 1Q deals) to +1jason.goldberg@barclays.com212 526 8580

an all-time high. Our composite reserve/loan ratio declined BCI, US

2bps to 1.47%, matching its post CECL low. Inna Blyakher

+1 212 526 3904

inna.blyakher@barclays.com

BCI, US

John Hotchkiss IIIAsset Quality Overview

+1 212 526 2687

Asset quality metrics have been stable to improving of late. For the median Large-Cap Bank, john.hotchkissiii@barclays.com

in 1Q26 the NPA ratio was stable to lower for the seventh consecutive quarter, improving 2bps. BCI, US

The NCO ratio was stable to lower for the fifth straight quarter, declining 2bps. And adjusted for Matthew Kesselhaut

acquisitions, classified loans decreased for the fourth consecutive quarter. Looking at credit +1 212 526 0181

cards, the largest source of loan losses, NCOs improved 55bps y-o-y (-43bps in 4Q25, -32bps in matthew.kesselhaut@barclays.com

3Q25, -21bps in 2Q25), though increased 24bps sequentially. Early (-5bps), mid (-5bps) and late BCI, US

(-4bps) stage delinquencies (DQs) all improved y-o-y. In the quarter, results benefited from Brian Morton, CFA

increased tax refunds. Looking out, businesses and consumers continue to navigate an +1 212 526 2163

above-average interest rate/inflation backdrop, geopolitical tensions, ongoing uncertainty brian.morton@barclays.com