Skip to contentFederal Reserve Bulletin
Profits and Balance Sheet Developments at U.S. Commercial Banks in 2005
Figure 24. Delinquency and charge-off rates for loans to businesses, by type of loan, 1990-2005. Data plotted as curves. Two panels. In the top panel, the delinquency rate for commercial real estate loans starts in 1991 at about 12 percent and generally declines thereafter to reach about 1 percent in 2005. The delinquency rate for C&I loans starts in 1990 at about 5 percent, rises to about 6 percent in 1991, declines to about 2 percent in 1994, begins rising in 1998 to reach about 4 percent in 2002, then declines to reach about 1.5 percent in 2005. In the bottom panel, the net charge-off rate on commercial real estate loans starts in 1991 at about 1.75 percent, spikes twice to about 2.5 percent by year-end 1992, generally falls to reach about zero percent in 1997, begins rising in 2000 to reach about 0.2 percent in 2002, then declines to zero percent at the end of 2005. The net charge-off rate on C&I loans starts in 1990 at about 1.4 percent, drops slightly over the year then rises to about 2 percent by year-end 1991, falls generally to reach about 0.1 percent in late 1994, where it roughly stays until late 1996, after which it rises to about 1.5 percent in mid-2001, spikes twice to about 2 percent by mid-2002, then generally falls to about 0.2 percent by year-end 2005.
Note: The data are quarterly and seasonally adjusted; the data for commercial real estate begin in 1991. Delinquent loans are loans that are not accruing interest and those that are accruing interest but are more than thirty days past due. The delinquency rate is the end-of-period level of delinquent loans divided by the end-of-period level of outstanding loans. The net charge-off rate is the annualized amount of charge-offs over the period, net of recoveries, divided by the average level of outstanding loans over the period. For the computation of these rates, commercial real estate loans exclude loans not secured by real estate (refer to table 1, note 2). Return to article