The Federal Deposit Insurance Corporation (FDIC) has released its Quarterly Banking Profile for the third quarter of 2025, summarizing financial data from 4,379 insured commercial banks and savings institutions. The report shows that these institutions achieved a return on assets (ROA) of 1.27 percent and an aggregate net income of $79.3 billion, marking a $9.4 billion (13.5 percent) increase compared to the previous quarter.
According to the FDIC, “the quarterly increase in net income was driven by lower provision expense (down $9.2 billion, or 30.7 percent) and higher net interest income (up $7.6 billion, or 4.2 percent), which were offset by higher income taxes (up $5.0 billion, or 30.1 percent) and higher noninterest expense (up $2.9 billion, or 1.9 percent).” The reduction in provision expenses was mainly linked to costs associated with a large bank acquisition reported in the prior quarter.
Community banks also saw improved results, with their quarterly net income rising by $756.9 million (9.9 percent) to reach $8.4 billion in the third quarter of 2025. The pretax ROA for community banks increased by 13 basis points from the previous quarter to reach 1.46 percent.
The industry’s net interest margin grew by nine basis points to 3.34 percent, exceeding its pre-pandemic average of 3.25 percent; community banks recorded a margin of 3.73 percent, also above their pre-pandemic average.
Asset quality metrics remained stable overall: past-due and nonaccrual loans held steady at 1.49 percent of total loans—well below the pre-pandemic average—but some portfolios such as non-owner-occupied commercial real estate and credit card loans continue to show higher rates than before the pandemic.
Net charge-off ratios edged up slightly from last quarter but remain below levels seen during the financial crisis.
Total loan and lease balances increased by $159 billion (1.2 percent), driven primarily by growth in loans to non-depository financial institutions and securities-related lending activities as well as consumer and commercial real estate lending.
Community banks’ total loans rose by 1.3 percent over the prior quarter and by 5.2 percent year-over-year.
Domestic deposits increased for a fifth straight quarter, growing by $92.2 billion (0.5 percent). Estimated uninsured domestic deposits accounted for most of this rise.
The Deposit Insurance Fund’s reserve ratio improved by four basis points to reach 1.40 percent as its balance grew to $150.1 billion during the third quarter.
Finally, there was a decline in the number of FDIC-insured institutions: forty-two fewer banks were counted compared to last quarter due to mergers, consolidations, and sales to uninsured entities.
