Community Bank Lending Remains Strong into September.

Our "Bank Balance Sheet Weekly Dashboard" (Source: Federal Reserve H.8 reporting via FRB St. Louis FRED) continues to show strength in lending at community banks - up 6.6% year over year; large bank lending has slowed to 2% year over year.

Community bank lending activity was solid across all categories of loans with commercial real estate and consumer lending growth highest. Large bank lending growth stronger in construction and multifamily real estate and consumer loans.

Large banks continue to add to holdings of agency MBS securities; while community banks have slowed growth in this portfolio in favor of overall loan growth on balance sheet.

Large banks continue to hold nearly twice the percentage of cash balances than community banks. This supports achievement of the Liquidity Coverage Ratio. Most of these balances are held at the Fed.

On the deposit front, both community banks and large banks are experiencing continued strong growth. To support balance sheet - loan - growth, community banks have increased usage of borrowings such as FHLBank advances. Large banks have reduced borrowings modestly year over year.