Provisions for credit losses at US banks increased to the highest levels since the second quarter of 2020, rising to $22.32 billion in the most recent quarter.

The total represents a sequential increase of $2.83 billion from $19.49 billion a quarter earlier, according to S&P Global Market Intelligence data. The sequential increase suggests the drop in provisions during the first quarter was an anomaly in a longer trend of increases that started in the second quarter of 2021.

Thirteen of the 20 largest depository institutions reported quarter-over-quarter increases along with the larger bank industry.

JPMorgan Chase Bank NA, the largest US bank based on total assets as of June 30, reported second-quarter provisions of $3.29 billion, up from $1.99 billion in the linked quarter. The company's reserves as a percentage of gross loans decreased quarter over quarter to 1.68%. JPMorgan Chase & Co. also completed its acquisition of First Republic Bank assets on May 1.

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"The net reserve build of $389 million was driven by updates to certain assumptions related to the office real estate market as well as net downgrade activity in middle market banking," CFO Jeremy Barnum said during the company's second-quarter earnings call.

Reserves as percentages of gross loans increased at 17 of the 20 largest banks in the US quarter-over-quarter. Only JPMorgan Chase, TD Bank NA and Ally Financial Inc. reported decreases.

Total reserves continue to climb

Total reserves rose for the fifth consecutive quarter. The total rose to $209.02 billion at the end of the second quarter from $202.22 billion in the linked quarter. Reserves as a percentage of total gross loans increased to 1.70% from 1.66%.