Strong business ‌investment, steady hiring and resilient consumer spending drove consistent demand for commercial and personal credit in the first half of 2026, pointing to a stable U.S. economy.

The biggest U.S. regional lenders said this week that loan growth was strong and pipelines remain robust as clients look past an uncertain environment to move forward with their investment plans.

"The sentiment rebound from the pause with tariffs last ​year has been the story. A lot of people who had paused last year to say where is all of this going are seeing ​a very resilient consumer and a lot of demand and beginning to lean into that in a fair way," U.S. Bancorp ⁠CEO Gunjan Kedia said.

A rush by technology companies to fund artificial intelligence infrastructure is also boosting financing activity for banks across the country. Top regional banking executives, however, ​emphasized that loan growth was broad-based and not just concentrated in the AI buildout.

"People are feeling very optimistic. They (clients) are growing their businesses and it's in all areas. ​It's in food and beverage. It's in media and technology. It's in power," U.S. Bancorp finance chief John Stern said.

On a year-on-year basis, U.S. Bancorp (USB.N) and Citizens Financial (CFG.N) reported over 7% and 5% growth in their average loans in the second quarter, while Regions Financial (RF.N) posted about 3% growth.

"I think we are seeing a capitulation and this sense that you can't wait for lower rates ​any longer, or you can't wait for perfect stability, the environment and the macro trends right now are good and so you are seeing more (lending) activity," Bryan ​Preston, CFO of Fifth Third Bancorp, told Reuters.

"We have seen that now people are not just drawing on the revolvers but there are new borrowings happening too and we think it ‌is a ⁠good indicator of the investment environment."

In recent quarters, loans to non-bank financial institutions have also emerged as a key growth driver for regional banks, which are ramping up credit facilities to private credit funds and business development companies to capitalize on the sector's rapid expansion.

Net interest margin, a key measure of banking profitability, also grew across the industry in the second quarter. The metric came into sharper focus recently as Wall Street debates whether deposit costs could rise in the second half of 2026 as ​banks look to fund accelerating loan ​growth.

"There was a bit more loan growth ⁠than people expected coming into the quarter, which might have caused deposit competition to increase a little bit. I think that likely just evens out. I don't think it's a trend that we're all that concerned about," Citizens Financial CEO Bruce ​Van Saun said.

CAPITAL MARKETS MOMENTUM

A rebound in dealmaking and IPO market activity is taking hold on Wall Street, fueling a ​surge in lucrative advisory ⁠and underwriting fees across the banking industry.

Capital markets revenue at six U.S. regional lenders surged 55% on average in the second quarter from a year earlier, with PNC Financial (PNC.N) reporting the strongest percentage growth.

The biggest regional players have steadily expanded their Wall Street operations in recent years and carved a niche among middle-market firms.

They are also bolstering their long-term growth ⁠opportunities within capital ​markets by snapping up boutique investment banks.

This year, U.S. Bancorp bought BTIG, while Citizens Financial (CFG.N) and ​Regions Financial (RF.N) struck deals for Matrix Capital Markets Group and The Frazer Lanier Company, respectively.

"As we see our (M&A) pipelines, we feel like there's real upside if the markets remain as strong as they are right ​now," Citizens head of commercial banking Theodore Swimmer said.