Lending Boomed in 4Q, Early Data Says: Interactive Graphic

Preliminary data suggests bank lending surged in the fourth quarter, notwithstanding the perpetual train wreck in Washington.

Commercial and industrial loan growth rebounded from two quarters of fading momentum to an annual rate of 15.5%, according to weekly reports published by the Federal Reserve. Total loans increased at a 5.2% pace, the fastest since the first quarter, and total assets jumped at an 11.1% rate. (The following graphic shows volume data for major balance sheet categories; interactive controls are described in the captions. Text continues below.)

The apparent spike in business lending comes as banks have been reporting slackening demand from borrowers and intense price competition, and as bankers have cited uncertainty over the federal budget as a headwind.

The Fed estimates are based on information provided by a sample of domestically chartered commercial banks, and later calibrated to quarterly regulatory reports. The data has sometimes diverged from actual results, which will become available as banks report financials in the weeks ahead, but generally it has corresponded closely in recent periods.

Since the first quarter of 2011, annual growth rates in business lending derived from the Fed data, both seasonally adjusted and not, have varied from final results published by the Federal Deposit Insurance Corp. by less than 4 percentage points during all but two quarters. In the first quarter of last year, the growth rate suggested by the seasonally adjusted Fed data outran the actual growth rate of 8.6% by 11 percentage points.

Industrywide levels vary greatly from trends at individual institutions. The median annual rate of change at top-tier banks that report consolidated financials has fluctuated between growth of 3% and contraction of 4% over the same time, according to data from SNL Financial.

Aggregate trends can also be whipsawed by inflows and outflows resulting from unique events. In November, bank assets and liabilities increased by about $75 billion because of the consolidation of nonbanks, according to the Fed. After backing out amounts due to the consolidation, loans in the fourth quarter notched middling annual growth of about 3% through Dec. 26.

Business lending appears to have been mostly unaffected by the event, however, and total assets appear to have increased sharply either way — at an annual rate of 8.2% without the consolidation.

All the growth in single-family home loans (an annual rate of 9.1%) can be canceled out if the consolidation is excluded. Deposits grew at an annual rate of 15% after backing it out.

Business borrowing may be showing surprising vitality despite the brinksmanship on Capitol Hill. Banks may be trying to stuff their balance sheets to compensate for narrowing net interest margins. The picture will become clearer as banks begin to post fourth-quarter results at the end of this week.