Loan-loss provisions

The Buffalo, New York-based bank also said Monday that the commercial real estate lending market has started showing signs of life, but that the renewed competition is crimping its loan growth.

Other regionals set more aside for loan losses than the Cleveland bank did in the second quarter, and its ratio of reserves to total loans is slightly lower, too. But Key executives say the portfolio is balanced and holding up well despite the pandemic’s economic toll.

The Pittsburgh bank says fewer borrowers are asking for help and that many borrowers who received assistance are making payments again. But with the coronavirus pandemic still raging in much of the country, CEO William Demchak and other bankers are tempering their optimism.

Lenders are cautioning not only that second-quarter provisions might exceed the spike seen earlier this year, but also that credit costs could be elevated into 2021 if the economic slowdown drags on or fears of a second coronavirus wave are borne out.

The second-quarter jump in provisions may be three to four times higher than a year earlier and will be mostly for loans that have yet to go bad, analysts said.

Shares in the lender fell after it reported lower third-quarter profits, said nonperforming assets rose and cautioned that it had lost multifamily loan deals to competitors offering easier terms.

The four prudential agencies, which will enforce the new credit loss methodology developed by the Financial Accounting Standards Board, said they want to promote consistency.

Rep. Blaine Luetkemeyer, R-Mo., told the mortgage giants' chief federal regulator that the Financial Accounting Standards Board’s new model for estimating loan losses could pose risk across the mortgage market.

Loans grew 6% at JPMorgan Chase, but the bank is "not going to be stupid" and assume that will last forever, its CEO says. Here are some precautionary steps it's taking.

Fannie Mae and Freddie Mac may need to tap into U.S. Treasury funds when they adopt CECL, a new accounting rule that makes companies set aside money upfront for expected loan losses.