Loan growth in the U.S. banking sector picked up substantially in the fourth quarter of 2021.
Total loans and leases at U.S. banks and thrifts were $11.244 trillion at Dec. 31, 2021, representing a 3.0% quarter-over-quarter increase according to S&P Global Market Intelligence data. In the six previous quarters, the change had ranged from negative 0.7% to 0.6%. Also in the fourth quarter of 2021, loan growth exceeded deposit growth for the first time since the second quarter of 2019.
The recent loan growth was distributed across several categories. Commercial and industrial loans, still well off their peak from mid-2020, increased $70.53 billion, or 3.1%. Loans from U.S. offices provided to nondepository financial institutions have more than doubled in the last four years and jumped $58.98 billion, or 9.1%, in the last quarter of 2021.
Bank of America Corp. unit Bank of America NA added $55.33 billion in loans during the fourth quarter, topping all companies in the industry. The bank grew commercial and industrial loans by $20.93 billion and loans to nondepository financial institutions from U.S. offices by $12.96 billion.
Pre-provision net revenue, which equals net interest income plus noninterest income minus noninterest expense, totaled $76.84 billion across the industry, down 6.7% from the third quarter of 2021. Loan growth boosted net interest income, but noninterest income declined and expenses went up.
After three quarters of negative provisioning, the provision for credit losses moved into positive territory at $302.2 million. Each of the four largest U.S. banking institutions, which are units of JPMorgan Chase & Co., Bank of America, Wells Fargo & Co. and Citigroup Inc., reported a negative provision.
The industry's net interest margin stabilized in 2021, finishing at 2.53% in the first, third and fourth quarters and 2.47% in the second quarter. The average yield on loans and leases was 4.34% in the fourth quarter, unchanged from the previous quarter. The cost of deposits fell for the ninth consecutive quarter to 0.11%.
Credit quality concerns were muted in the fourth quarter. The net charge-off ratio ticked up to 0.22% from 0.19% quarter over quarter, while the nonperforming asset ratio decreased 4 basis points to 0.62%.