Major US banks have reported earnings — giving us a peek into America’s financial health.

Key finding: Unpaid loans are rising

In the first quarter, the four US largest banks wrote off $3.4B in bad consumer loans — a 73% increase from last year. And banks expect more — setting aside billions to prepare for an increase in unpaid loans.

Here’s what Wells Fargo’s execs are saying:

• “We’ve seen some consumer financial health trends gradually weakening from a year ago,” — CFO.
• Delinquencies and write-offs are rising as expected, but consumers and businesses remain strong — CEO.

No immediate concern (yet)

During COVID, delinquency rates fell as consumers used stimulus funding to pay off loans and purchases.

With stimulus gone, consumers are falling behind again — but banks are saying it’s only a return to normal.

• Citigroup’s CFO says current delinquency rates are 2.8% — still lower than the typical 3-3.5% levels.
• “We haven’t seen any cracks in that portfolio yet… The consumer is in great shape.” — per BofA’s CFO.

Instead, JPMorgan is more concerned about its real estate portfolio as investors sour on office loans.