Commercial Loan Pricing Market Update (Nov. 16-30)

Since early March, we’ve posted regular updates on the commercial loan pricing markets, based on what we’ve seen when examining the PrecisionLender dataset. We look at several popular metrics and point out areas in which there have been noteworthy changes. 

Today’s analysis is for the second half of November. NIM on floating rate loans hit its highest mark this year, while there may be reason to be encouraged by the rising average balances in interesting bearing accounts. 

If you’d like to see our previous loan pricing market updates, you can find them here.  

We track many more metrics than are spotlighted in these posts. The ones that didn’t “make the cut,” usually don’t get displayed because there’s either a) nothing much new to say about them, or b) the data is too murky and needs a few more weeks of monitoring before it can be shared. 

That said, if you have questions about metrics that have appeared in previous posts, but not this latest one, please reach out us at to

NOTE: PrecisionLender’s data reflects actual commercial opportunities priced (loans, deposits, and other fee-based business) by more than 150 banks in the United States, ranging in size from small community banks to top 10 U.S. institutions. In addition to their variance in size, these banks are also geographically diverse, with borrowers in all 50 states.

Volume Falls During Slow Business Period 

The weekly average volume of loans priced dropped by 15% but that drop is softened a bit when the quasi-business holiday of Black Friday – which had about 1/3 of the volume we typically see on a business day – is factored in. If that day had produced a typical daily volume, then the drop in the second half of November would have been around 10%. We’ll continue to monitor this metric though, to see if any further drops can be explained by seasonality, or if there are other factors at work. 

Priced Commercial Loan Volume, Weekly Average

LIBOR and Prime Spreads Both Rise

LIBOR and Prime spreads both increased in the latter half of November. While spreads to Prime (49 basis points) are in the middle of their post-March range (44-57 bps), spreads to LIBOR rose 7 bps and reached their highest mark this year (269 bps).

Average Spread to 1-Month LIBOR

Average Spread to Prime

Coupon Rates Up for Floating, Steady for Fixed

The aforementioned spread increases were mirrored in their corresponding floating coupon rates, with the prime coupon rates rising 3 bps and 1-month LIBOR coupon rates increasing 7 bps – their highest level since early June. 

Coupon Rate Trend

Funding Curves Drop Slightly 

For the first time since early September, the 3-Month LIBOR Swap Curve snapshot is lower than its previous mark. The drop is minor – just 5 basis points at the 360-month mark – it’s worth monitoring to see if this is just a brief hiccup or the start of a new trend. 

3-Month LIBOR Swap Curve

Floating-Rate NIM Reached Highest Mark in 2020  

That drop in funding costs, when combined with a 10-point increase in yields in late November, generated the highest net interest margin on floating-rate commercial loans this year – 3.34%. It’s the latest data point in the steady rise of floating rate NIMs during the pandemic. 

Floating Rate NIM Composition

Interest Bearing Deposit Account Balances Up in Q4

Stepping back and taking a yearlong view of interest bearing accounts, we noted that average balances rose 21% from Q1 to Q4. The first impulse might be to write off this increase as businesses building up reserves to ride things out during a tough economy, but recall that in our previous post we noted that median loan amounts were on the rise. So this buildup in liquidity – DDA account balances have remained flat – along with a willingness to take out larger loans may just be a reflection of businesses getting back on more solid footing.
Average $ Balance per Interesting Bearing Account

Got Questions?  

Our banking consultants and data scientists are combing through PrecisionLender pricing data every day. If there is anything you’d like to know about what they’re seeing, please send along your questions to




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