The banking industry reported a return on assets ratio of 1.26% and aggregate net income of $80.5 billion in the first quarter of 2026, an increase of $2.8 billion, or 3.6%, 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 3,852 community banks increased $302.7 million, or 3.9%, from the prior quarter to $8.1 billion, according to the FDIC. The share of community banks that were unprofitable during the quarter was 4.9%, down from 7.4% in the prior quarter.
Domestic deposits increased $389.7 billion, or 2.1%, in Q1, rising for a seventh consecutive quarter. Estimated uninsured domestic deposits drove the increase, up $233.5 billion, drove the increase. The Deposit Insurance Fund balance increased $3.6 billion to $157.5 billion in Q1. The reserve ratio increased one basis point during the quarter to 1.43%.
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.
The number of FDIC-insured institutions declined by 60 during Q1 to 4,278. Three banks opened during the quarter; six banks were sold to non-FDIC-insured institutions; 54 institutions merged with other banks; and one bank failed.
The number of banks on the FDIC’s “Problem Bank List” decreased by a net of six in Q1 to 54 banks. The number of problem banks represented 1.3% of total banks, which is in the normal range of 1% to 2% for non-crisis periods.
“The latest FDIC Quarterly Banking Profile shows that the banking industry remained resilient in the first quarter with solid earnings and robust deposit and loan growth,” said American Bankers Association Chief Economist Sayee Srinivasan. “Despite increased market volatility, asset quality metrics remained stable. America’s banks are well capitalized with strong liquidity to continue supporting their customers and communities.”
