Most US banks kept their 2025 guidance intact during first-quarter updates, but some amended their expectations over fears of an economic downturn.
Loan growth took the most hits from the banks that reevaluated their expectations, followed by net interest income (NII), as economic uncertainty and the threat of a slowdown loomed.
Lower loan growth expectations
Banc of California Inc. tempered its loan growth expectations for the year due to tariff-related concerns. The company now expects mid-single-digit percentage loan growth for 2025, at the lower end of its previously forecast mid- to high-single-digit growth.
"So far, [the] second quarter is strong. The reason why we're tempering it is because I really don't know what's going to happen in the back half of the year. So things could shut down," President and CEO Jared Wolff said during an earnings call. "Our desire to reduce our forecast from high single digits to mid-single digits is not a huge move ... just a little bit of a nod to that we're seeing some clouds."
While a slowdown could be temporary, he said, "we don't know if that temporary means through the end of the year or for the next couple of months."
Slowdown fears also pushed Comerica Inc. to decrease its full-year average loan guidance to a 1% to 2% decline from flat to up 1%, according to its first-quarter earnings report.
In the near term, borrowers are slowing, but not stopping, Chief Banking Officer Peter Sefzik said.
"There are a lot of folks that are pulling their foot off the accelerator, but they're not necessarily putting the brakes on," he said.
Veritex Holdings Inc. expects loan growth to stay flat year over year, down from prior guidance of up between low- to mid-single digits, but the company is bullish on 2026.
"Given the pipelines and given the production that's already on the books, the outlook for loan growth in [2026] is more in the mid- to high-single digits," CFO Terry Earley said.
Fulton Financial Corp. expects low-single-digit range loan growth for 2025, trending to the lower half of previously offered guidance.
"We have a good pipeline, and we're just not sure on how that will convert given the environment," Chairman and CEO Curtis Myers said during a conference call.
Uncertainty was not the sole reason banks cut guidance. Aggressive competition in commercial real estate depressed loan growth guidance at M&T Bank Corp., CFO Daryl Bible said on an earnings call.
The bottom of its previously forecast range became the top, with average loan guidance for the year falling to between $135 billion and $137 billion rather than $137 billion to $139 billion.
The bank's CRE portfolio is expected to trough in the fourth quarter after originally anticipating modest growth in the second half of the year.
"There are a lot more active lenders in this space," Bible said. "People are already being very aggressive on pricing and on structure."
While still anticipating growth in commercial and industrial lending, business customers are "on pause," Bible said.
Nudging NII lower
Truist Financial Corp. cut its 2025 NII guidance to 3% growth from the 4% it projected in January due to the interest rate environment. It had warned previously that higher rates in the short term and lower rates in the medium term would dent NII.
Fulton Financial kept its NII guidance intact, but cautioned it will likely fall at the lower end of its previously provided range "given the potential for a prolonged slower growth environment," CFO Richard Kraemer said.
Like Fulton, Wells Fargo & Co. affirmed NII guidance of 1% to 3% growth from 2024, but expects to hit the lower end of the range. Contributing factors like interest rates, deposit mix and loan growth remain unknowns, executives said during an earnings call.
"We're trying to be as transparent as we can be about what the outcomes can be in terms of NII, but they are huge unknowns," President and CEO Charles Scharf said.
