Commercial loans show rapid growth
Regions Financial’s (RF) total loan growth in 1Q15 was 3.4% YoY (year-over-year), while commercial and industrial loans grew 10.6%. Recently, commercial loans across banks showed rapid growth. According to the bank, small corporate and middle market clients drove maximum growth in the commercial loan segment.
The bank’s asset-based lending and corporate real estate pipeline are strong, according to the bank. The above graph shows the growth in the bank’s loan balances over the last five quarters. Regions Financial accounts for ~1.5% of the SPDR S&P Bank ETF (KBE).
Consumer loans grew in the quarter
In the quarter, consumer loans grew 2% YoY, while indirect auto loans increased 14%. Other consumer loans grew 8% YoY as the bank continued to offer new and enhanced consumer lending products. In the quarter, credit card balances increased 5.3% YoY. The card loan balances declined seasonally—compared to the previous quarter.
Total home equity balances declined 2.6% YoY.
The YoY total loan growth for the quarter was 2% for SunTrust Bank (STI), 5% for JPMorgan Chase (JPM), and 4% for Wells Fargo (WFC). For the quarter, the YoY core loan growth was 2% for Citigroup (C) and 3.2% for Bank of America (BAC).
Growth in deposits
In the quarter, Region Financial’s deposit balances increased 4.4% from the same quarter last year, while checking accounts grew 5.7%. The growth reflects the bank’s efforts to deepen its customer relationships, increase the number of households, and offer services through multiple channels. The above graphs show the deposit growth, costs, and funding costs over the last five quarters.
Deposit costs remained low at 12 basis points. Total funding costs declined to 29 basis points in the quarter—compared to 33 basis points in the same quarter last year.