U.S. Large-Cap Banks: 1Q26 FFIEC Data: Loan losses at 2.5-year low while loan growth accelerates

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U.S. Large-Cap Banks: 1Q26 FFIEC Data: Loan losses at 2.5-year low while loan growth accelerates

Equity Research

19 May 2026

U.S. Large-Cap Banks

1Q26 FFIEC Data: Loan losses at

2.5-year low while loan growth

U.S. Large-Cap Banksaccelerates

POSITIVE

NCOs in 1Q26 improved 7bps y-o-y and declined 2bps U.S. Large-Cap Banks

Jason M. Goldberg, CFAsequentially to 0.57%, its lowest level since 3Q23, amid

broad-based improvement. DQs declined 7bps y-o-y and fell +1jason.goldberg@barclays.com212 526 8580

4bps sequentially to 1.49%, less than half its L/T average. BCI, US

Consumer led the progress while C&I and R/E were little Inna Blyakher

+1 212 526 3904

changed to worse. inna.blyakher@barclays.com

BCI, US

Earlier today, the Federal Reserve posted its quarterly "Charge-Off and Delinquency Rates on John Hotchkiss III

Loans and Leases at Commercial Banks" report. This data is compiled from the quarterly +1 212 526 2687

FFIEC (Federal Financial Institutions Examination Council) Consolidated Reports of Condition john.hotchkissiii@barclays.com

BCI, USand Income. Using non-seasonally adjusted data, we note:

Matthew Kesselhaut

Loan losses in 1Q26 stood at a 2.5-year low. The industry-wide net charge-off (NCO) ratio +1 212 526 0181

declined 4bps linked quarter in 1Q26 to 0.57%, its lowest level since 3Q24. NCOs have declined matthew.kesselhaut@barclays.com

in four of the past five quarters. Note, over the past 25 years NCOs have averaged an 11bp BCI, US

improvement from 4Q to 1Q. Over the past 10 quarters, NCOs have been in a narrow range of Brian Morton, CFA

0.57%-0.68%. While 0.57% is above its pre-pandemic (1Q15-4Q19) average of 0.46%, it is still +1 212 526 2163

below its long-term average of 0.86% (since 1Q85). Looking forward, NCOs have historically brian.morton@barclays.com