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How Did Banks Fund C&I Drawdowns at the Onset of the COVID-19 Crisis? Accessible Data

Figure 1. Historical Perspective of Weekly C&I Loan Growth on Banks' Balance Sheets

Percent (left axis). Monthly level change (Billions of dollars) (right axis)

Date C&I loans as share of total assets (left axis) Monthly level change in C&I in billions (right axis)
1/31/2007 12.06 9.61
2/28/2007 12.21 21.85
3/31/2007 12.39 7.19
4/30/2007 12.49 12.76
5/31/2007 12.57 15.70
6/30/2007 12.75 17.36
7/31/2007 12.69 9.94
8/31/2007 12.85 43.09
9/30/2007 13.17 39.15
10/31/2007 13.05 16.12
11/30/2007 13.21 31.78
12/31/2007 13.32 25.80
1/31/2008 13.32 16.53
2/29/2008 13.42 17.05
3/31/2008 13.77 27.65
4/30/2008 13.84 7.45
5/31/2008 13.91 2.20
6/30/2008 14.02 15.40
7/31/2008 14.15 10.98
8/31/2008 14.04 3.46
9/30/2008 13.61 46.73
10/31/2008 13.57 27.34
11/30/2008 13.25 -15.94
12/31/2008 12.83 -39.98
1/31/2009 13.20 6.50
2/28/2009 13.07 -22.20
3/31/2009 12.79 -22.20
4/30/2009 12.65 -18.45
5/31/2009 12.38 -32.03
6/30/2009 12.07 -40.12
7/31/2009 12.01 -37.04
8/31/2009 11.59 -36.30
9/30/2009 11.50 -32.66
10/31/2009 11.00 -23.28
11/30/2009 10.82 -22.39
12/31/2009 10.60 -27.84
1/31/2010 10.44 -23.80
2/28/2010 10.31 -16.58
3/31/2010 10.11 -27.44
4/30/2010 10.00 -9.94
5/31/2010 10.00 -7.33
6/30/2010 9.96 -9.71
7/31/2010 9.82 5.08
8/31/2010 9.81 -2.57
9/30/2010 9.77 -2.19
10/31/2010 9.77 1.65
11/30/2010 9.84 -0.04
12/31/2010 9.90 5.57
1/31/2011 9.97 3.77
2/28/2011 9.96 7.05
3/31/2011 9.86 6.03
4/30/2011 10.02 9.90
5/31/2011 10.00 16.62
6/30/2011 9.93 -0.50
7/31/2011 10.01 17.70
8/31/2011 10.15 17.34
9/30/2011 10.07 1.13
10/31/2011 10.23 18.46
11/30/2011 10.22 5.23
12/31/2011 10.30 16.43
1/31/2012 10.41 14.59
2/29/2012 10.49 8.91
3/31/2012 10.75 9.66
4/30/2012 10.91 13.34
5/31/2012 10.89 15.26
6/30/2012 11.04 17.01
7/31/2012 11.08 18.91
8/31/2012 11.01 6.87
9/30/2012 11.22 15.09
10/31/2012 11.25 13.65
11/30/2012 11.12 -0.61
12/31/2012 11.34 34.09
1/31/2013 11.26 0.28
2/28/2013 11.38 5.59
3/31/2013 11.17 12.45
4/30/2013 11.26 6.47
5/31/2013 11.10 3.15
6/30/2013 11.17 10.95
7/31/2013 11.20 12.88
8/31/2013 11.04 -1.72
9/30/2013 11.13 10.20
10/31/2013 10.99 8.00
11/30/2013 10.98 16.80
12/31/2013 11.33 14.13
1/31/2014 11.14 13.04
2/28/2014 11.38 36.66
3/31/2014 11.35 4.29
4/30/2014 11.56 18.62
5/31/2014 11.36 11.98
6/30/2014 11.48 23.98
7/31/2014 11.36 9.67
8/31/2014 11.32 18.11
9/30/2014 11.49 10.95
10/31/2014 11.43 7.35
11/30/2014 11.47 27.74
12/31/2014 11.91 11.63
1/31/2015 11.68 20.86
2/28/2015 11.92 20.61
3/31/2015 12.04 23.54
4/30/2015 12.14 10.35
5/31/2015 12.24 18.80
6/30/2015 12.49 16.96
7/31/2015 12.27 2.89
8/31/2015 12.25 22.30
9/30/2015 12.64 8.18
10/31/2015 12.36 10.75
11/30/2015 12.61 21.55
12/31/2015 12.68 1.21
1/31/2016 12.82 28.60
2/29/2016 13.01 4.46
3/31/2016 13.11 10.38
4/30/2016 13.26 17.87
5/31/2016 13.19 14.85
6/30/2016 13.11 3.18
7/31/2016 12.92 -2.53
8/31/2016 12.90 -0.67
9/30/2016 13.20 18.36
10/31/2016 13.16 13.22
11/30/2016 13.20 3.44
12/31/2016 13.12 -12.46
1/31/2017 13.09 6.10
2/28/2017 13.06 -1.15
3/31/2017 13.03 -16.52
4/30/2017 13.30 10.93
5/31/2017 13.12 -3.01
6/30/2017 13.11 3.04
7/31/2017 12.89 10.90
8/31/2017 12.76 3.37
9/30/2017 13.03 19.18
10/31/2017 12.89 -4.34
11/30/2017 12.67 -3.24
12/31/2017 12.90 8.20
1/31/2018 12.85 -2.65
2/28/2018 12.97 8.39
3/31/2018 13.44 18.86
4/30/2018 13.57 18.15
5/31/2018 13.45 8.92
6/30/2018 13.52 14.28
7/31/2018 13.49 11.48
8/31/2018 13.44 7.19
9/30/2018 13.54 8.55
10/31/2018 13.60 21.05
11/30/2018 13.67 25.91
12/31/2018 14.02 43.13
1/31/2019 14.04 -2.49
2/28/2019 14.03 10.38
3/31/2019 14.06 18.39
4/30/2019 14.16 -3.78
5/31/2019 13.89 -2.44
6/30/2019 13.97 14.03
7/31/2019 13.84 4.17
8/31/2019 13.68 9.93
9/30/2019 13.63 -11.48
10/31/2019 13.59 1.57
11/30/2019 13.42 -0.80
12/31/2019 13.51 -14.23
1/31/2020 13.39 9.04
2/29/2020 13.16 2.61
3/31/2020 14.76 468.32
4/30/2020 15.27 200.44

Note: Bars show changes in C&I outstanding over the course of each month from 2007 to the present. Month-end levels are linearly imputed from weekly data. C&I loan flows exclude loans to non-depository financial institutions due to a change in reporting in this interval.

Source: H.8.

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Figure 2. Aggregate Changes in Bank Balance Sheet Items by Week

Change normalized by start of period assets

Change from: C&I Loans Securities Core loans besides C&I Cash Other Assets Large Time Deposits Core Deposits Other Liabilities Non-Deposit Borrowings Net due to Change in Assets
3/4 to 3/11 0.001 0.001 0.000 0.002 0.004 0.000 0.003 0.003 0.002 0.000 0.79
3/11 to 3/18 0.012 0.001 -0.001 0.010 0.000 -0.002 0.018 0.002 0.007 -0.001 2.30
3/18 to 3/25 0.013 0.003 0.000 0.026 -0.006 -0.001 0.022 0.003 0.006 0.008 3.70
3/25 to 4/1 0.007 -0.001 0.000 0.012 -0.003 0.002 0.011 -0.005 -0.002 0.007 1.43

Note: Bars show weekly changes in assets (left bars) and liabilities (right bars) as a percentage of March 4 assets. Changes are aggregated across all respondent banks. The four largest changes from 3/4 to 3/11 were to other assets (+0.4%), core deposits (+0.3%), other liabilities (+0.3%), and cash (+0.2%). The largest changes from 3/11 to 3/18 were to core deposits (+1.8%), C&I loans (+1.2%), cash (+1.0%), and borrowings (+0.7%). The largest changes from 3/18 to 3/25 were to cash (+2.6%), core deposits (+2.2%), C&I loans (+1.3%), and net due to (+0.8%). The largest changes from 3/25 to 4/1 were to cash (+1.2%), core deposits (+1.1%), net due to (+0.7%) and C&I loans (+0.7%).

Source: FR 2644.

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Figure 3. Aggregate Changes in Bank Balance Sheet Items by Bank Type

Change normalized by start of period assets

Category C&I Loans Securities Core loans besides C&I Cash Other Assets Large Time Deposits Core Deposits Other Liabilities Non-Deposit Borrowings Net due to Change in Assets
Less than $10 billion 0.005 0.004 0.007 0.003 0.002 0.000 0.012 0.000 0.008 0.001 2.17
$10 billion - $100 billion 0.014 0.003 0.001 0.031 0.002 0.000 0.038 0.000 0.011 0.001 5.07
Greater than $100 billion 0.032 0.006 -0.002 0.046 -0.004 0.001 0.072 0.002 0.009 -0.005 7.85
Foreign branches 0.081 -0.006 0.001 0.139 -0.027 -0.019 0.016 0.009 0.037 0.144 18.67

Note: Bars show changes in assets (left bars) and liabilities (right bars) from March 4 to April 1, 2020 as a percentage of initial assets. Changes are aggregated across all banks within a particular size category that responded to both the March 4 and April 1 survey. Banks are categorized based on March 4 assets. The first three bars include domestic banks only, while the fourth bar shows results for branches and agencies of foreign banks. The largest changes for small banks were to core deposits (+1.2%), borrowings (+0.8%), core loans besides C&I (+0.7%), and C&I loans (+0.5%). The largest changes for midsized banks were to core deposits (+3.8%), cash (+3.1%), C&I loans (+1.4%) and borrowings (+1.1%). The largest changes for large banks were to core deposits (+7.2%), cash (+4.6%), C&I loans (+3.2%) and borrowings (+0.9%). The largest changes for foreign branches were to net due to (+14.4%), cash (+13.9%), C&I loans (+8.1%), and borrowings (+3.7%).

Source: FR 2644.

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Figure 4. C&I Loan Growth and Changes in Liquid Assets, Deposits and Borrowings

Figure 4 presents six scatter plots summarizing the relationship between changes in C&I loans for a week and changes in other balance sheet items.

The three charts on the left plot results for banks with over $100 billion in assets. In each of these plots, the weekly change in C&I loans as a percent of bank assets is on the x-axis. From top to bottom, the change in liquid assets, deposits and borrowings, all as a percent of initial assets are on the y-axis. Each chart shows a scatter plot for the 87 bank-week observation and the line of best fit between two displayed variables. The change in C&I ranges from about -.5 percent to about 2.5 percent.

In the top-left chart, changes in liquid assets bears little relationship with changes in C&I. If C&I increases by 1 percent of assets, liquid assets are expected to increase by about 0.13 percent of assets. The scatter plot shows the change in liquid assets ranging from about -5 percent of assets to about 5 percent of assets, with little of the variation driven by C&I growth (R-squared=0.3%).

In the middle-left chart, changes in deposits are positively correlated with changes in C&I. If C&I increases by 1 percent of assets, deposits are expected to increase by about 0.62 percent of assets. The scatter plot shows the change in deposits ranging from about -2 percent of assets to about 5 percent of assets, with some of the variation driven by C&I growth (R-squared=11%).

In the bottom-left chart, changes in borrowings are positively correlated with changes in C&I. If C&I increases by 1 percent of assets, borrowings are expected to increase by about 0.55 percent of assets. The scatter plot shows changes in borrowings ranging from about -4 percent of assets to about 4 percent of assets. This variable has the tightest relationship with changes in C&I (R-squared=13.9%).

The three charts on the right plot results for banks with under $100 billion in assets. In each of these plots, the weekly change in C&I loans as a percent of bank assets is on the x-axis. From top to bottom, the change in liquid assets, deposits and borrowings, all as a percent of initial assets are on the y-axis. Each chart shows a scatter plot for the 2207 bank-week observation and the line of best fit between two displayed variables. The change in C&I ranges from about -2 percent to about 3 percent of assets, with the vast majority of observations between -1 percent and 1 percent.

In the top-right chart, changes in liquid assets are negatively associated with changes in C&I. If C&I increases by 1 percent of assets, liquid assets are expected to decrease by about 0.51 percent of assets. The scatter plot shows the change in liquid assets ranging from about -4 percent of assets to about 6 percent of assets, without a very tight relationship with C&I growth (R-squared=1%).

In the middle-right chart, changes in deposits are positively correlated with changes in C&I. If C&I increases by 1 percent of assets, deposits are expected to increase by about 0.25 percent of assets. The scatter plot shows the change in deposits ranging from about -4 percent of assets to about 6 percent of assets, with little of the variation driven by C&I growth (R-squared=0.3%).

In the bottom-right chart, changes in borrowings are positively correlated with changes in C&I. If C&I increases by 1 percent of assets, borrowings are expected to increase by about 0.26 percent of assets. The scatter plot shows changes in borrowings ranging from about -2 percent of assets to about 4 percent of assets, with minimal variation driven by C&I growth (R-squared=0.8%).

Note: Charts plot the weekly change in various balance sheet items (as a percent of initial assets) against changes in C&I loans for a particular bank category. Each chart also displays the line of best fit between these variables, as well as the regression coefficient and R-squared from the corresponding regression. Observations where the dependent variable is below the 1st percentile or above the 99th percentile are suppressed in the scatter plot to facilitate display, but are still used to estimate the regression line. Observations are at the bank-week level, and span the period between March 4 and April 1. Left charts include observations from domestic banks with over $100 billion in assets as of March 4, while right charts include domestic banks with less than $100 billion in assets.

Source: FR 2644.

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Figure 5. Decomposition of Banks' Responses to C&I Loan Growth in March 2020

Coefficient

Category Securities Core loans besides C&I Cash Other Assets Large Time Deposits Core Deposits Other Liabilities Non-Deposit Borrowings Net due to
Less than $10 billion -0.006 0.027 0.321 0.225 -0.020 0.216 0.009 0.235 -0.011
$10 billion - $100 billion -0.045 -0.149 0.751 -0.001 -0.019 0.189 -0.023 0.285 0.002
Greater than $100 billion 0.027 -0.094 -0.185 0.087 -0.054 0.672 0.041 0.546 -0.033
Foreign branches 0.043 0.004 -0.309 0.006 0.360 0.015 -0.016 -0.122 1.018

Note: Segments show how much banks adjusted a particular balance sheet item to fund increases in C&I loans. Results are based on regression of weekly changes in various balance sheet items (as a percent of initial assets) against changes in C&I loans. For liabilities, this regression coefficient is plotted, reflecting how much that funding source increased for each dollar increase in C&I. For assets, the sign of the coefficient is reversed when plotted to reflect the fact that declines in other assets can accommodate C&I draws. The sample includes the four weeks from March 4, 2020 to April 1, 2020. Each bar decomposes the response for a particular category of bank. The largest margins of adjustment for small banks were to cash (+32.1%), borrowings (+23.5%), other assets (+22.5%), and core deposits (+21.6%). The largest adjustments for midsized banks were to cash (+75.1%), borrowings (+28.5%), core deposits (+18.9%), and core loans besides C&I (-14.9%). The largest adjustments for large banks were to core deposits (+67.2%), borrowings (+54.6%), cash (-18.5%) and core loans besides C&I (-9.4%). The largest adjustments for foreign branches were to net due to (+101.8%), large time deposits (+36.0%), cash (-30.9%), and borrowings (-12.2%).

Source: FR 2644.

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Figure 6. Decomposition of Banks' Responses to C&I Loan Growth from 2015 to 2019

Coefficient

Category Securities Core loans besides C&I Cash Other Assets Large Time Deposits Core Deposits Other Liabilities Non-Deposit Borrowings Net due to
Less than $10 billion -0.031 -0.158 0.436 0.093 0.043 0.314 0.015 0.229 0.002
$10 billion - $100 billion -0.089 -0.386 0.091 -0.033 0.086 0.961 0.010 0.347 -0.004
Greater than $100 billion -0.088 -0.135 0.451 0.138 -0.008 0.284 0.025 0.345 0.011
Foreign branches 0.004 0.002 0.326 0.020 -0.008 -0.081 0.024 0.096 0.611

Note: Segments show how much banks adjusted a particular balance sheet item to fund increases in C&I loans. Results are based on regression of weekly changes in various balance sheet items (as a percent of initial assets) against changes in C&I loans. For liabilities, this regression coefficient is plotted, reflecting how much that funding source increased for each dollar increase in C&I. For assets, the sign of the coefficient is reversed when plotted to reflect the fact that declines in other assets can accommodate C&I draws. The sample runs from January 7, 2015 to December 25, 2019. Each bar decomposes the response for a particular category of bank. The largest margins of adjustment for small banks were to cash (+43.6%), core deposits (+31.4%), borrowings (+22.9%), and core loans besides C&I (-15.8%). The largest adjustments for midsized banks were to core deposits (+96.1%), core loans besides C&I (-38.6%), borrowings (+34.7%), and cash (+9.1%). The largest adjustments for large banks were to cash (+45.1%), borrowings (+34.5%), core deposits (+28.4%) and other assets (+13.8%). The largest adjustments for foreign branches were to net due to (+61.1%), cash (+32.6%), borrowings (+9.6%) and core deposits (-8.1%).

Source: FR 2644.

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Last Update: July 31, 2020