FDIC: U.S. Banking Industry Posts Strong 2025 Results as Net Interest Margins Rise

Chairman Travis Hill and Andy Felton presented the Federal Deposit Insurance Corporation's fourth-quarter and full-year 2025 industry results, saying the U.S. banking sector posted stronger earnings and renewed loan growth.

"This was, another strong quarter for the industry," Chairman Travis Hill said, noting full-year income growth "of about 10% in 2025 from 2024" and three consecutive quarters of loan growth after two years of little to no growth. "We also have had expanding net interest margins, now at 3.39%, which is the highest since before the pandemic," he added.

Andy Felton, director of the FDIC's Division of Insurance and Research, walked through selected charts showing that the industry's return on assets increased 8 basis points to 1.2% and that annual net income rose about 10.2% to $296,000,000,000. Felton said quarterly net income was $77.7 billion in the fourth quarter, a decline of $1.6 billion from the prior quarter driven primarily by higher noninterest expense and several nonrecurring items at larger banks.

Felton highlighted several key metrics: a 5-basis-point quarter-over-quarter increase in the average net interest margin to 3.39%; total loans up $268 billion (about 2%) in the quarter and an annualized loan-growth rate of 5.9%, the fastest in 11 quarters; and a decline in unrealized losses on securities of about $31 billion from the prior quarter, which the FDIC described as the lowest level since the first quarter of 2022 (the transcript's stated resulting total was garbled and is not specified).

The presentation also noted deposits rose for a sixth consecutive quarter, increasing $318 billion (1.8%) in the fourth quarter, with estimated uninsured domestic deposits accounting for much of the rise. The FDIC reported the deposit insurance fund (DIF) balance at $154 billion on Dec. 31, 2025, with the reserve ratio increasing 2 basis points to 1.42% year over year.

On asset quality, Felton said the overall past-due and nonaccrual rate (PDandA) ticked up to 1.56% but remained below the pre-pandemic average of 1.94%. He cautioned that some portfolios''1nonowner-occupied commercial real estate (CRE), multifamily CRE, auto and credit-card portfolios''remain weaker than pre-pandemic norms and continue to show elevated PDandA and net charge-off rates.

Both officials emphasized that, while specific portfolios show strain, the FDIC does not see broad credit deterioration. "From a credit quality perspective, we still have no evidence of any deterioration," Chairman Hill said.

The briefing concluded with the FDIC opening for questions from reporters. The FDIC said that more complete charts and supplemental materials are available in the agency's statement for the quarter.