Federal Deposit Insurance Corporation reports Q2 2025 net income of USD 69.9 billion and Deposit Insurance Fund reserve ratio of 1.36 percent

The Federal Deposit Insurance Corporation released its Quarterly Banking Profile for second quarter 2025, showing FDIC-insured institutions reported aggregate net income of USD 69.9 billion and return on assets of 1.13 percent, down 1 percent from the prior quarter. The decline was driven by a sharp increase in provision expenses linked to a large bank acquisition, while the Deposit Insurance Fund balance rose to USD 145.3 billion and the reserve ratio increased to 1.36 percent. Provision expenses increased by USD 7.6 billion (33.7 percent), largely reflecting acquisition accounting requirements; absent this large provision, net income would have increased due to higher net interest and noninterest income. Community banks reported net income of USD 7.6 billion, up 12.5 percent quarter on quarter, with pretax return on assets rising to 1.33 percent. Net interest margin was broadly stable at 3.26 percent (up one basis point), past-due and nonaccrual loans fell to 1.50 percent of total loans, and the net charge-off ratio declined to 0.60 percent, although elevated past-due and nonaccrual rates persisted in non-owner-occupied commercial real estate, multifamily commercial real estate, and credit card portfolios. Loan and lease balances rose USD 263.7 billion (2.1 percent) and domestic deposits increased USD 101.5 billion (0.6 percent), with estimated uninsured domestic deposits up USD 186.4 billion and insured deposits down USD 87.3 billion; the number of FDIC-insured institutions fell by 41 to 4,421. With the reserve ratio exceeding the statutory minimum as of June 30, 2025, the FDIC indicated it will no longer be operating under the Restoration Plan beginning in third quarter 2025.