Bank Credit Climbs While Cash Drains: Nov 12 Data Undercuts the “Robust C&I” Story

The official press release dated November 21, 2025, touts robust C&I lending and steady credit growth. The ledger tells a different tale. October’s C&I pace cooled to 1.6% annualized, and seasonally adjusted C&I balances have barely budged since July. Meanwhile, bank credit ticked higher to $18,858.4B by November 12, but total assets slipped to $24,399.2B as cash assets fell to $2,941.8B. Credit is inching forward; liquidity is quietly exiting out the back.

PRESS RELEASE SUMMARY

Here’s what the data reveals:

• The headline 2025 C&I growth of 13.0% masks a sharp October slowdown to 1.6% and flat C&I levels since July ($2,674.3B in July vs $2,697.7B by Nov 12, SA).

• Bank credit rose ($18,729.3B in September to $18,858.4B by Nov 12, SA), but total assets fell ($24,474.9B to $24,399.2B), bridged by a cash asset drawdown ($3,410.3B in July to $2,941.8B by Nov 12).

• The lending strength isn’t broad-based. Growth is concentrated in “All other loans and leases,” notably loans to nondepository financial institutions ($1,641.8B in July to $1,744.2B by Nov 12, SA).

• Deposits are higher than mid-year but choppy, dipping to $18,398.3B (Nov 5) before rebounding to $18,505.0B (Nov 12, SA). Not a flight, but not a smooth glide path either.

• Borrowings are down ($2,305.4B in Aug to $2,136.3B by Nov 12, SA), but the better “funding mix” narrative is tempered by the decline in cash buffers.

Numbers Behind the Narrative

Selected balances (seasonally adjusted, $ billions)

Deposits (SA) show late-October whipsaw

C&I Headline Heat, Real-Time Chill

The press release leans on the year-to-date headline: C&I up 13.0% in 2025. But the current runs show a loss of thrust. October’s 1.6% annualized pace follows 4.4% in July and 3.8% in August, and the level data confirm the stall: $2,674.3B (July) to $2,697.7B (Nov 12, SA) is essentially a flat line for a supposed growth engine.

Even within 2025, the narrative drift is hard to ignore. C&I accelerated through Q2 (5.5%) and Q3 (7.7%), then hit the brakes in October. If you only read the headline, it looks like a boom; if you read the monthly tape, it looks like a fade.

Credit Up, Liquidity Down: The Hidden Cash Drain

Banks can’t expand credit and shrink cash forever without raising risk eyebrows. Bank credit stepped up from $18,729.3B (Sep) to $18,858.4B (Nov 12), yet total assets fell from $24,474.9B to $24,399.2B. The bridge is a cash bleed: $3,410.3B (July) to $3,025.0B (Oct) to $2,941.8B (Nov 12). Table 1 flags this with eye-watering annualized drops in cash assets during the summer: -38.4%, -58.3%, -44.3% (July–September).

Reverse repos and fed funds sold fluttered but didn’t offset the drawdown. Securities balances are broadly stable, with Treasury/agency holdings easing from $4,668.3B (Oct) to $4,659.0B (Nov 12). Net: credit grew, but balance sheet liquidity got thinner. That’s not crisis signaling, but it is pro‑cyclical—and notably at odds with a tidy “balance sheet expansion” storyline.

The Lending Shift: Nonbanks Take the Baton

“Broad-based lending” is doing more work in the press release than in the data. Yes, total loans and leases climbed from $12,978.1B (July) to $13,206.1B (Nov 12, SA). But the heavy lifting came from “All other loans and leases,” especially loans to nondepository financial institutions, up from $1,641.8B (July) to $1,744.2B (Nov 12). That’s persistent, month-after-month growth.

By contrast, core C&I is flat, and CRE is only nudging higher to $3,041.6B by Nov 12, while construction & land development continues to edge down ($470.1B in April to $456.7B). Real estate lending shows modest improvement—Table 1 pegs October at 3.0% annualized—but new project appetite remains subdued. Consumer credit accelerated (5.4% annualized in October), consistent with upticks across cards and autos, but that’s not the same as productive business formation.

Structurally, the credit mix is shifting toward financing the nonbank ecosystem. That’s a risk redistribution that doesn’t show up in top-line loan growth, but it matters for cyclicality and tail risk.

Funding Looks Better—But Mostly on Paper

The press release’s “improving funding mix” isn’t wrong—just incomplete. Borrowings fell from $2,305.4B (Aug) to $2,165.0B (Oct) and $2,136.3B (Nov 12). Year-to-date, deposits are up 3.8% (Table 1). But weekly deposits are choppy: down to $18,398.3B (Nov 5) before bouncing to $18,505.0B (Nov 12). It’s not a deposit flight, but it’s not a straight line either.

Pair that with the cash drain and the story shifts. Lower borrowings look prudent, yet the cushion is being harvested from cash. If rates or spreads jump, that’s a thinner buffer to lean on. Funding optics improve; underlying liquidity does not.

The Soft Securities Build

A supposed securities “build” peaked in October and eased into mid‑November. Treasury and agency holdings slipped from $4,668.3B (Oct) to $4,659.0B (Nov 12). Given the cash drawdown, securities aren’t clearly acting as the balancing item—banks are not obviously swapping cash for safe duration at size. Positioning looks cautious rather than opportunistic.

What This Means for Markets

• Credit is expanding, but the quality of growth is mixed. The most persistent lending is to nondepository financials, not core C&I or new construction. That can juice near‑term volumes while raising medium‑term cyclicality.

• Liquidity is the pressure point. Falling cash assets financed the credit uptick even as borrowings declined. If funding costs or deposit betas flare, margins and risk appetite compress quickly.

• CRE and construction remain tentative. CRE balances are inching up, but construction & land development down to $456.7B signals caution on new supply—a slow-burn constraint for future pipeline growth.

• Consumer credit re-accelerated in October (5.4%), adding resilience to card/auto ABS but also nudging loss-cycle sensitivities if labor softens.

The Investor Takeaway

Positioning:

• Banks

• Credit and securitized products

• Real assets and CRE

• Macro hedges

Looking forward: Watch whether November and December C&I readings confirm October’s 1.6% downshift or revert to Q3’s 7.7% momentum. Track cash assets as the tell; if credit rises and cash falls again, risk appetite is outpacing liquidity. And keep an eye on loans to nondepository financial institutions—if that line keeps pulling the cart, the cycle is more fragile than the headline suggests.

The press release cheered credit growth. The balance sheets showed where it came from. For investors, follow the cash: when credit rises and cash shrinks, the margin of safety is the asset that isn’t there.