Agencies Issue 2025 Shared National Credit Program Report

Federal bank regulatory agencies released the 2025 Shared National Credit (SNC) Program report on January 12, 2026, noting that credit risk from large syndicated loans remains moderate. The report evaluates loans originated by June 30, 2025, and includes 6,857 borrowers with $6.9 trillion in total commitments. This represents a 6% increase from the previous year, driven largely by new commitments rather than improved credit quality.

The SNC report also shows a slight decline in the percentage of non-pass loans, which fell to 8.6% of total commitments from 9.1% in 2024. While this appears to be a positive shift, it is primarily due to the growth in overall commitments rather than an improvement in the creditworthiness of borrowers. Leverage continues to be a significant factor, as nearly half of total SNC commitments and 81% of non-pass loans are leveraged.

U.S. banks hold 45% of all SNC commitments but only 22% of non-pass loans, a slight improvement from the prior year. This suggests that U.S. institutions may be better positioned to weather potential defaults compared to their foreign counterparts.

Why Did This Happen?

The 2025 SNC report reflects the continued challenges borrowers face with rising interest rates and macroeconomic pressures. The report emphasizes that while credit risk is moderate, it is being managed through increased commitments rather than through substantive improvements in borrower financial health.

Leveraged loans remain a dominant component of the SNC portfolio, highlighting the continued reliance of borrowers on high debt levels to finance operations. This trend is particularly relevant for investors monitoring credit market stability and risk distribution.

What Are Analysts Watching Next?

Regulatory attention remains on major rail merger proposals. Norfolk Southern (NSC) is undergoing a regulatory review with Union Pacific, a process expected to conclude in early 2027. Meanwhile, JP Morgan has maintained a 'Neutral' rating on NSC but lowered its price target to $301.00.

In the banking sector, ENB Financial Corp (ENBP) announced it received all necessary approvals for its acquisition of Cecil Bancorp, Inc. on January 12, 2026. The transaction is set to close on February 1, 2026, with system conversion scheduled to begin on June 26, 2026.

The 2025 SNC report underscores the need for continued monitoring of credit quality and macroeconomic conditions. As interest rates remain elevated and borrower leverage persists, financial institutions and investors are likely to focus on risk distribution and sector-specific vulnerabilities.