Banking-sector expansion leveled off in May and a growing number of industry executives see further tapering in growth over the rest of 2017, according to American Banker's Index of Banking Activity (IBA).

The IBA Composite reading of 56.7 kept the index in moderate growth territory — in its five years the Composite has yet to break below the 50-point level — but the score marked a second consecutive decline in momentum and the index has now essentially surrendered the gains it registered after Inauguration Day.

Respondents to the latest survey pointed to a range of factors that could weigh on the industry over the coming months. A handful pointed to a weakening in the quality of credit opportunities they were evaluating (the IBA's component that tracks commercial loan approvals has also been down in each of the last two months). A larger number of respondents expressed concern about the outlook for the agricultural sector.

Some areas of support remained robust. Consumer loan application activity, for example, accelerated in the month. Real estate was another that area lenders pointed to as a bright spot but responses this month revealed some concern about tightness in housing inventory available to generate new mortgage lending business.