Chart 5: C&I Loan Loss Rates Are Rising Faster at Larger Banks than at Smaller Banks
Data Source: FDIC Bank Call Reports (Research Information System); adapted from the FDIC Quarterly Banking Profile
Left Scale: Four Quarter Moving Average C&I Charge-off Rate (scale = 0 to 2.5 percent)
Note: C&I = commercial and industrial
The time series shows quarterly data from 1992 to the third quarter of 2001 on the horizontal axis.
The dotted line represents small commercial banks, or 7,748 commercial banks with less than $1 billion in assets. This line shows a decline in the charge-off rate from 1.9 percent in 1992 to 0.6 percent in 1994. After 1994, the line remains relatively flat, rising to 0.74 percent in the third quarter of 2001.
The solid line represents large commercial banks, or 401 commercial banks with greater than $1 billion in assets. This line follows the same general trend as the dotted line for small banks until the mid-1990s, falling from a 1.9 percent charge-off rate in 1992 to a low of 0.1 percent in 1995. This line remains relatively flat until the second quarter of 1997, when it begins to rise. In the second quarter of 2000, the solid line for large bank C&I charge-offs surpasses the line for small banks, finally rising to 1.2 percent in the third quarter of 2001.