U.S. C&I Loan Growth Surges as Private Credit Volatility Emerges as a Possible Driver

Commercial and industrial (C&I) loans are a core source of bank funding for corporate operations and investment, though they briefly took a back seat during the pandemic. Private credit has absorbed a large share of corporate financing in recent years, but fund redemptions, AI-related concerns and borrower bankruptcies have tightened the market. Pantheon Macroeconomics economist Samuel Tombs believes companies are consequently returning to banks, affecting both bank growth and credit risk.

Federal Reserve H.8 data showed bank C&I loans rose 12.7% quarter on quarter in the first quarter of 2026, far above the 4.3% year-on-year increase for all of 2025. That followed growth of just 0.9% in 2024 and a 0.3% decline in 2023. As of March 31, average balances were up 8.3% at Wells Fargo, 6.4% at PNC and 4.2% at Citizens from the previous quarter. Associated Banc-Corp reported a quarter-end balance of $12.3 billion, up 4.6% quarter on quarter.