Lending Pulse Loans Aren't the Problem, Funding Them Is

US Banks Lending Pulse: Loans Aren't the Problem, Funding Them Is Industry Overview

2Q updates highlight sustainability, broadening lending 26 July 2026

2Q26 management updates delivered near-unanimous agreement that the lending cycle Equity is sustainable and broadening. From money-centers to regionals, management pointed United States to broad-based commercial demand rather than a single hot pocket: PNC's Demchak Banks called business momentum "really strong," M&T posted its best loan growth since 2012 Ebrahim H. Poonawala with CRE turning positive for the first time since 2021, and Regions tied its C&I Research Analyst BofAS strength to power, utilities and manufacturing. The connective tissue is the capex cycle—Goldman's Solomon put it most directly, framing AI as a force expanding capital

needs "beyond core technology to infrastructure, energy, and data centers." That ripple is Brandon Berman Research Analyst now visible on regional balance sheets, corroborating the acceleration in H.8 data. BofAS Although there is more than AI capex momentum driving this, as repeatedly flagged by regional bank CEOs, with Demchak noting in response to our question during the Gabriel Angelini earnings call, "It's too broad-based to lay it all on AI." See Appendix A: 20+ CEOs/CFOs Research Analyst in their own words on where loan demand is really coming from—and what it's BofAS costing to fund. Michael Campos Debate squarely on how to fund loan growth Research Analyst BofAS The debate has shifted almost entirely from whether loans grow to what deposits cost to fund them. Nearly every team flagged intensifying deposit competition—Truist called out "elevated rate-seeking behavior," Zions warned of campaigns "approaching wholesale rates," and Huntington pointed to a competitive funding environment. Columbia went further, refusing to match pricing it deemed "irrational." The result is a widening split between the low-cost, DDA-rich franchises that can let loan growth run and those increasingly reliant on higher-cost or wholesale funding. That dispersion—not loan demand—is the variable most likely to separate winners from laggards into 2H26. Exhibits 1-15 for loan and deposit growth trends vs. historical per Fed H.8 data.

Exhibit 1: Total loan growth momentum decelerates though YoY trends encouraging Week-over-week loan growth, trailing 6 weeks, all commercial banks

Loans: Week-over-Week Growth YoY YoY Week (as of (as of Ending 6/10/26 6/17/26 6/24/26 7/1/26 7/8/26 7/15/26 3/25/26) 7/15/26) Growth Trend ¹ Total Loans 0.06% 0.17% 0.14% 0.19% -0.29% 0.13% 7.0% 7.2% Decelerating C&I -0.45% 0.11% 0.20% -0.36% -0.72% -0.01% 5.1% 8.3% Decelerating Resi 0.23% 0.07% -0.02% -0.03% 0.06% 0.13% 2.2% 2.5% Decelerating CRE 0.27% 0.02% -0.03% 0.03% 0.08% 0.12% 2.5% 3.3% Decelerating Cards -0.20% -0.11% 0.74% 0.18% -0.24% -0.17% 2.7% 3.9% Decelerating Auto 0.07% 0.12% 0.19% 0.42% -0.07% 0.11% 4.9% 6.1% Stable NDFI 0.14% 0.16% -0.35% 1.27% -0.23% 0.07% 32.9% 20.1% Stable ¹Acceleration/deceleration of loan growth, trailing six weeks, measured by slope of underlying linear regression line Source: Federal Reserve, BofA Global Research BofA GLOBAL RESEARCH

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Exhibit 2: Deposit growth momentum accelerating over last 6 weeks as YoY trends improve Week-over-week deposit and borrowing growth, trailing 6 weeks, all commercial banks

Deposits: Week-over-Week Growth YoY YoY Week Ending 6/10/26 6/17/26 6/24/26 7/1/26 7/8/26 7/15/26 (as of 3/25/26) (as of 7/15/26) Growth Trend ¹ Deposits 0.19% -0.18% 0.01% 1.01% -0.67% 0.55% 5.1% 6.7% Accelerating Large time 0.19% -0.09% 0.02% -0.01% 0.17% 0.52% 5.5% 6.0% Accelerating Other deposits 0.19% -0.20% 0.01% 1.16% -0.80% 0.55% 5.0% 6.8% Accelerating Borrowings 1.08% 0.23% 0.93% -1.00% 1.20% -1.61% 0.9% -0.4% Decelerating ¹Acceleration/deceleration of deposit & borrowing…