Most credit quality metrics at U.S. banks improved year over year in the first quarter, but early-stage delinquencies did jump.
Early-stage delinquencies, or loans between 30 days and 89 days past due, increased 12.55% year over year to $47.43 billion from $42.14 billion.
On a year-over-year basis, the ratio of nonperforming assets to total assets improved by 16 basis points to 0.41%, while nonaccrual loans, as a proportion of total loans and leases, improved by 22 basis points to 0.51%.
The ratio of restructured loans and leases to total loans and leases also decreased by 14.70% during the quarter to $37.62 billion, compared with the year-ago period's $44.11 billion.
Commercial loans remain steady
Sequentially, commercial real estate loans was the only category under commercial loans to log a slight uptick in its delinquency ratio trend for the first quarter, rising by 3 basis points. U.S. banks pursued diverging strategies for their exposure to the sector amid uncertainties in return-to-office plans in the country.
All other categories' delinquency ratios improved on a quarter-over-quarter basis, with farm loans decreasing by 1 basis point, multifamily and commercial and industrial loans improving by 3 basis points each, and construction loans improving by 4 basis points.
On a year-over-year basis, the ratio for all commercial loan categories improved.
Credit card loans bucking the trend
For consumer loans, only credit card loans' delinquency ratio increased quarter over quarter, rising 11 basis points. The auto loan delinquency ratio, which recorded its first improvement since the end of the first quarter of 2021, declined by 16 basis points during the first quarter of 2022 from the previous quarter. Other consumer loans also improved by 7 basis points from fourth-quarter 2021.
Record Q1 home mortgage loan quality
As of March 31, first-quarter delinquency trends for one- to four-family mortgage loans at U.S. banks were at 2.41%, the lowest level since 2014 for the same period, compared with 3.18% as of March 31, 2021, and 2.64% as of March 31, 2020.
Overall improvement in delinquent mortgage loan balance
Among the top 10 banks with the largest total delinquent one- to four-family mortgage loan balance for the first quarter, PNC Financial Services Group Inc. had the biggest year-over-year increase at $220.6 million, while Midland Financial Co. had the biggest delinquency ratio at 34.61%. Wells Fargo & Co. retained its top spot with the largest delinquent balance for the category, at $11.21 billion.
The sector's total delinquent balance for the loan type improved overall to $60.78 billion from the previous quarter's $68.06 billion.
