June 23, 2026 — Commercial and Industrial (C&I) loan growth gathered significant momentum in the first quarter of 2026, providing yet another sign of the surprising resilience of the U.S. economy.
Given the mix of trade tariff tumult, persistently high inflation and concerns about the U.S. job market and broader economy percolating at the start of 2026, there seemed ample reason to expect that loan growth would remain subdued through the first three months of the year. That view was only reinforced by the geopolitical developments in late February, which introduced an additional layer of economic uncertainty.
However, data from the Coalition Greenwich Commercial Loan Analytics group shows that C&I loan balances grew approximately 10% year over year in Q1 2026.
“Despite significant headwinds, an analysis of annualized balance growth using seasonally adjusted quarterly data shows that C&I loan volume didn’t just increase in Q1, it surged to by far the highest rate in the past two years,” says Greg Schneider, Director on the SME Analytics Team at Crisil Coalition Greenwich and Head of Commercial Loan Analytics (CLA).
It remains to be seen if the strong loan growth seen in Q1 can persist in what still seems to be an uncertain economic environment.
“The latest Federal Reserve Senior Loan Officer Opinion Survey (SLOOS) shows some signs that banks have begun tightening lending standards, which could be a precursor of slowing growth,” says Steve Boyle, Lead Analyst, CLA at Crisil Coalition Greenwich. “However, this market has surprised us before.”
Spreads and Fees Creep Higher
In what could reflect the nascent signs of bank tightening seen in the most recent Fed SLOOS, spreads and fees on C&I loans increased modestly in Q1 2026. SOFR spreads on C&I loans climbed about three basis points. In the same period, data from CLA reveals an increase in upfront fee pricing of about 7 basis points.
In the Southeast United States, spreads fell below the overall national average last quarter, a possible sign that banks have begun conceding on price due to competitive pressures in the region.
“The southeast region is emerging as an active and important growth market for commercial banks,” says Greg Schneider.
In Business Banking, Banks Adjust Mix of Spread and Fees
Average prime spreads in business banking fell by roughly 7 bps in Q1 2026 versus the linked quarter, driven primarily by a contraction of spreads on loans of less than $50,000 in commitments. However, as spreads declined, fees increased by approximately 4 bps, suggesting that banks may also be implementing a trade-off between interest revenue and fee revenue from their business clients.
“In the business banking space, banks appeared more willing to concede on loan pricing if they could offset a portion of the foregone revenue with increased fees,” says Steve Boyle.