The banking industry reported a return on assets ratio of 1.24% and aggregate net income of $77.7 billion in the fourth quarter of 2025, a decrease of $1.6 billion, or 2%, from the prior quarter, according to the FDIC’s most recent Quarterly Banking Profile released today. The banking industry continued to have strong capital and liquidity levels, which support lending and protect against potential losses, the agency added.
Quarterly net income for the 3,909 community banks insured by the FDIC totaled $7.9 billion in Q4, a decrease of $307.6 million, or 3.8%, from Q3, according to the FDIC. Larger noninterest expense and non-recurring items at several larger banks were the primary contributors to the decline.
Domestic deposits increased $318.3 billion, or 1.8%, from Q3, rising for a sixth consecutive quarter. Estimated uninsured domestic deposits drove the increase, up $214.7 billion, drove the increase. The Deposit Insurance Fund balance increased $3.7 billion to $153.9 billion in Q4. The reserve ratio increased two basis points during the quarter to 1.42%.
The total number of FDIC-insured institutions declined by 43 during Q4 to 4,336. During the quarter, one bank opened, four banks were sold to non-FDIC-insured institutions, two banks closed voluntarily and liquidated their assets, 36 institutions merged with other banks, and no banks failed.
For 2025, the banking industry reported full-year net income of $295.6 billion, up $27.5 billion, or 10.2%, from 2024. The increase was driven by higher net interest income and higher noninterest income, which offset higher noninterest expense.
ABA: Report showcases strength of banking industry
The FDIC’s latest QBP shows that the banking industry remains on solid footing, supported by balanced growth across key areas, American Bankers Association Chief Economist Sayee Srinivasan said.
“In a competitive financial services marketplace, banks of all sizes have increased their footprint, closing out the year with strong broad-based growth in deposits and lending,” Srinivasan said. “Loan growth increased 2% from the prior quarter and rose 5.9% for the full year.
“While net income dipped modestly in last year’s fourth quarter, earnings saw a strong year-over-year increase led by a significant improvement in net interest margin,” he added. “Flat loan-loss provisioning reflects stable credit conditions. While delinquencies and net charge-offs edged up over the quarter, overall asset quality continues to hold steady. Overall, banks remain well capitalized with strong liquidity and are positioned to support households, businesses, and communities as economic conditions evolve.”
