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 respectively through the end of February 2021, off their rolling twelve month highs of 1.3% and 1.0%. Nonaccrual balances in particular have levelled off noticeably, hovering between 0.9% and 1.0% for 7 consecutive months now. It has become clear that the government’s fiscally manufactured bridge to the other side of the pandemic has been strong enough. The next few months will determine if that bridge is long enough.
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