Delinquencies on credit card and auto loans in the first quarter continued to inch closer to levels seen during the early stages of the COVID-19 pandemic.

The credit card loan delinquency ratio jumped more than 80 basis points year over year and 18 basis points sequentially to 2.63% at March 31, the highest level since the first quarter of 2020, according to S&P Global Market Intelligence. The auto loans delinquency ratio of 2.52% in the first quarter was an increase of 60 basis points year over year, but a decrease of 36 basis points sequentially.

The average annualized net charge-off rate for the six major US card issuers increased 17 basis points sequentially to 1.58% in March. JPMorgan Chase & Co. logged the second-highest increase at 29 basis points, bringing its annualized net charge-off rate to 1.62%. At its May 22 investor call, JPMorgan Chase kept its guidance for credit card net charge-offs at 2.6% in 2023, while predicting it to stay lower than 3.5% in 2024 but go above 3.5% in 2025.

YOY early-stage delinquencies climb

Early-stage delinquencies in total loans and leases, or loans and leases past due between 30 days and 89 days, increased 18.2% year over year to $55.23 billion in the first quarter. Sequentially, early-stage delinquencies were down 6.9%. As a proportion of total loans and leases, early-stage delinquencies increased 4 basis points year over year to 0.45%.

– Download a tear sheet to run a stress test on banks and thrifts. – Download a template to calculate deposit and loan beta and growth rates. – Read some of the day's top news and insights from S&P Global Market Intelligence.

Loans and leases past due 90 days or more totaled $17.49 billion, an increase of 43.8% on a yearly basis and 4.2% sequentially.

The ratio of nonperforming assets to total assets improved 12 basis points to 0.29% on a year-over-year basis, while nonaccrual loans, as a proportion of total loans and leases, improved 6 basis points to 0.45%.

C&I loans continue trending downward

Almost all categories of commercial loans registered an increase in delinquency trends sequentially but showed a decline compared to the year-ago period.

Commercial and industrial (C&I) loans logged yearly and sequential declines in delinquency ratios in the first quarter. The C&I loan delinquency ratio ticked down 6 basis points on a quarterly basis and 9 basis points on a yearly basis to 0.98%.

At 1.01%, the farm loan delinquency ratio in the first quarter declined 41 basis points year over year, but increased around 7 basis points from the previous quarter. Meanwhile, the commercial real estate (CRE) loan delinquency ratio jumped 4 basis points year over year and 16 basis points from the previous quarter to 0.95% at March-end.

Home mortgage delinquency ratio lowest in two years

The delinquent one- to four-family loan balance stood at $53.50 billion in the first quarter, down from $60.87 billion in the first quarter of 2022 and $78.32 billion in 2021. The ratio of delinquent one- to four-family loans to total one- to four-family loans also declined 47 basis points year over year, to 1.93% during the quarter.

Among the top 10 banks with the highest total delinquent one- to four-family mortgage loan balances in the first quarter, U.S. Bancorp was the only one to register an increase from the year-ago quarter. Oklahoma City-based Midland Financial Co. had the highest delinquency ratio at 29.44%. However, 99.1% of Midland's total delinquent loans were government guaranteed.

With a total delinquent loan balance of $8.85 billion, Wells Fargo & Co. remained the top US bank in this category. However, the bank registered the biggest yearly decline in the delinquent loan balance among the top 10, at $2.27 billion.