The Federal Deposit Insurance Corporation (FDIC) has released its Quarterly Banking Profile for the second quarter of 2025, showing that FDIC-insured commercial banks and savings institutions reported a return on assets (ROA) of 1.13 percent and aggregate net income of $69.9 billion. This marks a decrease of $677.3 million, or 1 percent, from the previous quarter.

According to the FDIC, the decline in industry net income was primarily due to higher provision expenses, which rose by $7.6 billion, or 33.7 percent. The increase in provision expense was largely attributed to the acquisition of one large bank because accounting standards require recognizing a provision expense for certain acquired assets. Without this large provision expense, industry net income would have increased as a result of higher net interest and noninterest income.

Community banks saw improved results compared to the prior quarter. The FDIC reported that "Quarterly net income for the 3,982 community banks insured by the FDIC totaled $7.6 billion in the second quarter, an increase of $842.9 million (12.5 percent) from first quarter 2025." The pretax ROA at community banks increased by 15 basis points to reach 1.33 percent.

The Deposit Insurance Fund's reserve ratio also improved during the quarter, increasing by five basis points to reach 1.36 percent as of June 30, 2025. The fund balance rose by $4.4 billion to $145.3 billion during this period, exceeding the statutory minimum and ending requirements under the Restoration Plan starting with third quarter 2025.

Net interest margin (NIM) for all insured institutions remained relatively stable at 3.26 percent—one basis point above last quarter and slightly above pre-pandemic averages [https://www.fdic.gov/analysis/quarterly-banking-profile/qbp/]. Community bank NIM climbed for a fifth consecutive quarter to reach 3.62 percent.

Asset quality metrics generally remained favorable even though some weaknesses persisted in certain portfolios such as non-owner-occupied commercial real estate and credit card loans; past-due and nonaccrual loans dropped nine basis points from last quarter to represent 1.50 percent of total loans—still below pre-pandemic averages.

The industry's annual loan growth rate was four percent in the second quarter—below its pre-pandemic average—but total loan balances grew by $263.7 billion (2.1 percent) over the prior quarter as lending activity picked up across several categories including credit cards and residential mortgages.

Domestic deposits increased for a fourth straight quarter with an overall rise of $101.5 billion (0.6 percent). Uninsured domestic deposits grew while insured domestic deposits declined modestly during this time frame.

The number of FDIC-insured institutions continued its gradual decline: there were 41 fewer insured institutions at midyear than in March; two new banks opened while one failed, five were sold outside FDIC insurance coverage, and another thirty-seven merged with other banks.

"Quarterly net income for the 3,982 community banks insured by the FDIC totaled $7.6 billion in the second quarter, an increase of $842.9 million (12.5 percent) from first quarter 2025," according to data released by the agency.