Loan growth remained resilient in the fourth quarter of 2024 both in the Sixth District and nationally at commercial banks with assets less than $10 billion (see the chart).
At 6.1 percent in the fourth quarter of 2024, loan growth in the Sixth District was less than half its recent peak of 13.9 percent, which occurred in the first quarter of 2023. Although loan growth in the District tracks with national trends, it remains consistently above the national growth rate.
However, it is important to note that lending growth varies from bank to bank, depending on specific circumstances. Although overall loan growth was 6.1 percent in the fourth quarter of 2024, one-third of Sixth District commercial banks saw loan growth above 10 percent while 16 percent experienced a contraction in total loans.
By portfolio, first mortgages saw the largest increase in lending in the Sixth District while consumer lending contracted on a year-over-year basis in the fourth quarter of 2024. Commercial banks also saw growth in their commercial real estate (nonfarm nonresidential plus multifamily) portfolios.
What to expect for loan growth in 2025? The latest Senior Loan Officer Opinion Survey on Bank Lending Practices survey from the Board of Governors suggests that banks generally expect that underwriting standards will either remain where they are or ease slightly while demand for loans will strengthen across all loan categories.
By Scott Hughes, a lead quantitative expert in the Federal Reserve Bank of Atlanta's Supervision and Regulation Division