RMA/AFS RAS Credit Risk Benchmarks 1Q2020

The first quarter of 2020 was unlike anything we’ve ever seen for the banking industry. Banks were challenged on numerous fronts – a global pandemic, a faltering economy, rising unemployment, turmoil in energy markets, and the implementation of the new CECL accounting standard. In a quarter that began much differently than it ended, commercial loan balances surged in March as corporate borrowers drew down on lines of credit in order to stockpile cash and brace for disruptions in cash flow.  By quarter-end, short-term C&I delinquencies had risen to the highest level seen since the end of the last recession. Energy nonaccruals ticked up in the first quarter, although many commercial banks have limited their exposure to the riskiest borrowers within this industry.