Collateral Is Collateral Once

In September, two companies most of our customers had never heard of went bankrupt. Tricolor, a Dallas subprime auto lender and used-car dealer, filed for Chapter 7 on September 10, amid reports that it had pledged the same car loans to more than one lender. First Brands, the Ohio company behind FRAM filters and Trico wiper blades, filed for Chapter 11 at the end of the month. By early October the questions were about how much of its financing sat off its balance sheet. Neither company is a bank. Both borrowed from banks, and from the funds and finance companies that banks lend to.

Banks call that last group nondepository financial institutions: finance companies, private credit funds, mortgage lenders, business development companies. Here is what EveryBank lends them, from our most recent Call Report.

• Mean EveryBank: $312.6 million. In 2016 it was $48.0 million. Across all banks, these loans are now 10.6% of the loan book, up from 3.3%. Part of the jump came at the end of 2024, when the reporting instructions changed and banks moved existing loans onto this line.
• Median EveryBank: $0. Only 13.8% of banks report any.
• The 31 banks over $100 billion hold 87.6% of it.

EveryBank has no direct exposure to Tricolor or First Brands. We do have exposure to the average of everyone's exposure, which is how averages work.

"Collateral is supposed to be collateral once. A car can back one loan. If it is backing two, one of those lenders owns a picture of a car."

— Colin Lateral, Head of Lending

Median EveryBank's version of private credit is the car dealer down the street: a customer for thirty years, whose lot you can see from the branch. It has never pledged the same car twice, because we would notice.

We will report September 30 figures with our third-quarter results.

Update, Jan. 2, 2026: American Banker reports that lending to nonbanks made up 40% of bank loan growth in 2025, and that part of it was relabeling. We mentioned that.

Reporting: The Wall Street Journal (Sept. 11 and Oct. 8, 2025); ABA Business Law Today (Oct. 2025); Bloomberg (Sept. 29, 2025); CNBC (Oct. 10, 2025); American Banker (Jan. 2, 2026). Loan figures: public bank filings, June 30, 2025 and March 31, 2016.