Content by Automated Financial Systems, Inc. -- AFS

  • Credit Markets Remain Calm Despite Economic Cross Currents and Equity Market Volatility

    Commercial loan performance and credit quality remained solid through January 2022 despite continued economic cross currents and market volatility. C&I loans past due 30–59 days were 0.61%, up 10 basis points month over month and right about the two-year average level. Learn more in this issue.
  • C&I Lending Slows in January, SOFR Adoption Increases

    Last month, the industry witnessed one of the strongest Decembers on record for C&I balance growth. That momentum came to a halt in January, although January’s decrease in C&I balances was less pronounced than that reported in the same month a year earlier.
  • Commercial Loan Credit Quality Metrics Are Pristine Entering 2022; C&I Loan Growth Surges in Decembe

    The month of December saw a surge in C&I lending, easily the strongest month of the entire year. C&I balances were up 4.5% in December 2021 alone, driven by both new originations and strong growth in line utilization rates.
  • New Commercial Lending Surges in December, SOFR Adoption Continues to Expand

    2021 ended with a significant rise in commercial loan balances, far above the level of increase typically realized in December. The higher than expected level of loan growth was supported by a strengthening economy, which thus far has weathered the pandemic’s resurgence in the form of the...
  • Commercial Loan Credit Quality Shrugs Off Inflation & Consumer Confidence Worries, Continues to Impr

    Through the end of October, several key performance metrics for commercial credit quality improved month over month, despite broader economic news painting a less rosy picture.
  • Commercial Loan Balances Rise at the Highest Rate Seen in 2021

    Total commercial loan growth was robust in October, particularly on the heels of a sluggish third quarter. A sharp rise in participation balances, complemented by an increase in C&I bilateral loans, helped lift total commercial loan balances to levels above where they stood prior to the...
  • Commercial Loan Pricing Trends Newsletter October 2021

    C&I Bilateral Loan Growth Accelerates in September, LIBOR Alternatives Gain Volume As third quarter bank earnings releases come in, banks have shared cautiously optimistic outlooks for loan growth through the remainder of the year. Total commercial loan balances excluding PPP loans barely...
  • Case Study: Market-Leading Bank – Outstanding Performance with AFS

    A 20-year software vendor and bank partnership is not common, and neither is one that has enabled a commercial bank to grow from under $300 million to well over $60 billion in commercial loan assets. Learn more in this case study.
  • Commercial Credit Quality Bulletin September 2021

    Widespread Spike in Short-Term Delinquencies Casts Doubt on Future Path of Commercial Credit Quality While many key indicators of commercial credit quality continued to improve through August, we were thrown a curve by a widespread spike in short-term delinquencies month over month.
  • Commercial Loans Grow in August Despite Economic Challenges

    August’s results for commercial loan growth were generally positive despite broader economic frictions caused by the spread of COVID-19’s highly contagious Delta variant and low line of credit utilization rates.
  • Is Everyone Ready for LIBOR Cessation?

    In less than six months, the credit markets will witness the cessation of one-week and two-month LIBOR followed by the last 18 months of LIBOR, hence ending its 40 plus years of usage. With the clock ticking towards LIBOR cessation and transition projects entering a critical point we ask, “Is...
  • Commercial Credit Quality Bulletin August 2021

    Credit Recovery Inches Along but Commercial Real Estate Asset Quality Lags C&I by a Wide Margin While the search for green shoots in commercial loan growth garners the headlines, banks generally continue to report improvement, albeit modest, in commercial credit quality. Noncurrent C&I...
  • RPA: Automating the Future of Commercial Lending

    This white paper discusses how Robotics Process Automation (RPA) can be used to speed up work processes and protect information through automation in Commercial Lending.
  • Commercial Loan Growth Was Elusive in July

    Commercial loan growth stalled in July, as line of credit utilization is still well below the pre-pandemic average. Adjusting for PPP loans, total commercial loan balances were up only +0.09% in July when compared to the prior month. There were some positive takeaways this month, with line...
  • Commercial Credit Quality Bulletin July 2021

    Credit Quality Continues to Hold Up Through the Second Quarter Despite Frictions in the Economy As second quarter bank earnings releases trickle in, several shared themes have emerged concerning the outlook for commercial loan growth and credit quality.
  • Commercial Loan Growth Moderates in May

    Total commercial loan balances decreased in May, reversing the positive momentum gained in April. Unlike last month, when an upswing in C&I bilateral lending helped offset runoff in PPP balances, total loan growth in May was relatively subdued outside of a small increase in CRE balances. Fears...
  • Commercial Credit Quality Bulletin June 2021

    Credit Performance and Outlook Continues to Improve Amid Lessening Pandemic Impact The favorable economic news has finally translated into notable improvements in key commercial lending performance statistics.
  • LIBOR in Focus

    This publication offers insight into this critical and monumental market change to help support your transition from LIBOR to Alternative Reference Rates.
  • Making the Connection: Real-Time Payments and Commercial Lending in the Digital Age

    What effect will real-time payments have on Commercial Lending? In the latest AFS whitepaper Making the Connection: Real-Time Payments and Commercial Lending in the Digital Age, we examine real-time payments’ effect on banking systems.
  • Is a Rebound in Commercial Loan Growth Underway?

    U.S. job growth was weaker than expected in April, complicating the outlook for the overall economy and, by extension, the commercial loan market. For its part, total commercial loan growth was strong in April, with C&I bilateral loans increasing at the highest monthly growth rate seen so far...
  • C&I Loan Underwriting Standards Ease but Demand Subdued: Credit Quality Holding Steady

    Most of the overall economic news for 2021 has been very favorable – GDP for the first quarter of 2021 was up 6.4%, sales of new homes were over one million units in March 2021, the industrial production index for April was up 0.7%, and consumer spending was up almost 11% in 1Q2021 compared to...
  • PPP Lending Dominates Commercial Loan Growth in March

    Total commercial loan balances continued to expand in March on the strength of Paycheck Protection Program (PPP) lending. Excluding this loan type, C&I bilateral loan balances increased slightly this month, with growth limited to a handful of large industries such as Finance & Insurance. After...
  • Overall Credit Quality Steady but Pockets of Weakness in Commercial Real Estate Remain

    With bank earnings season upon us, revenue, net interest margins, and credit quality are taking center stage. Several of the early bank reporters, after building sizeable credit loss reserves as the economy fell into recession, have started to release reserves as the recovery takes shape. For...
  • PPP Lending Fuels Commercial Loan Growth in February

    Total commercial loan balances expanded in February, reversing the decline seen last month. While much of this growth was fueled by Paycheck Protection Program (PPP) lending, C&I bilateral loan balances outside of this program also increased modestly. As the economy normalizes and business...
  • One Year Later: How Bad Did Commercial Credit Quality Get, and What Happens Next?

    As the nation reaches and passes the one-year anniversary of the beginning of widespread job losses and stay-at-home orders caused by the pandemic, we assess the state of credit quality one year later. Past due and nonaccrual C&I loans represented 0.4% and 0.9% of total outstanding balances...