The banking industry reported a return on assets ratio of 1.27% and aggregate net income of $79.3 billion in the third quarter of 2025, an increase of $9.4 billion, or 13.5%, from the prior quarter, according to the FDIC’s most recent Quarterly Banking Profile released today. Strong net interest income growth and a reduction in provision expense, primarily related to Capital One’s acquisition of Discover earlier this year, drove the quarterly increase in earnings.
Quarterly net income for the 3,953 community banks insured by the FDIC totaled $8.4 billion in Q3, an increase of $756.9 million, 9.9%, from Q2, according to the FDIC. Higher net interest income and noninterest income offset increases in noninterest expense.
Domestic deposits increased $92.2 billion, 0.5%, from Q2, rising for a fifth consecutive quarter. Estimated uninsured domestic deposits drove the increase, up $88.6 billion, or 1.1%, from the prior quarter.
The Deposit Insurance Fund balance increased $4.8 billion to $150.1 billion in Q3. The reserve ratio increased four basis points during the quarter to 1.4%.
The total number of FDIC-insured institutions declined by 42 during the third quarter to 4,379. During the quarter, four banks were sold to uninsured institutions and 38 institutions merged or consolidated with other banks.
ABA: Report shows critical role of banks in U.S. economy
The latest Quarterly Banking Profile indicates the banking industry delivered a strong third quarter and continued to drive the U.S. economy, ABA Chief Economist Sayee Srinivasan said. He noted that lending grew across most categories for banks of all sizes, deposit growth was healthy and asset quality remained stable.
“The industry’s stronger net interest margin across all bank cohorts in the quarter reflects a favorable business environment that allowed banks to lend, support economic activity and maintain financial stability,” Srinivasan said. “We also note that the Deposit Insurance Fund reserve ratio maintained its robust growth and increased to 1.4%, well above its statutory minimum of 1.35%, which provides an opportunity for the FDIC to reconsider current assessments. ABA and its members look forward to participating in that conversation.”
