The Federal Deposit Insurance Corporation released third quarter 2025 results for FDIC-insured institutions, showing higher quarter-over-quarter earnings with industry net income of USD 79.3 billion and a return on assets of 1.27 percent. Results reflected strong net interest income growth and a sharp drop in provision expense, while domestic deposits rose for a fifth straight quarter and loan growth continued. Asset quality remained generally favorable, although weakness persisted in certain portfolios, and unrealized losses declined but remained elevated. Net interest margin rose 9 basis points to 3.34 percent, and community bank net income increased 9.9 percent to USD 8.4 billion. Provision expense fell to USD 20.8 billion, down USD 9.2 billion from the prior quarter, largely reflecting acquisition-related accounting from Capital One’s acquisition of Discover Financial Services in the prior quarter. Total unrealized losses on securities portfolios declined USD 58.2 billion to USD 337.1 billion; longer-term loans and securities fell to 33.9 percent of total assets. Total loans increased USD 159.0 billion (1.2 percent), and the past-due and nonaccrual rate was unchanged at 1.49 percent, with elevated past-due and nonaccrual rates in non-owner-occupied commercial real estate, multifamily commercial real estate, auto, and credit card portfolios; banks with more than USD 250 billion in assets reported a non-owner-occupied commercial real estate past-due and nonaccrual rate of 4.18 percent. The FDIC’s Problem Bank List fell by two to 57 banks. The Deposit Insurance Fund balance was USD 150.1 billion as of September 30, 2025, up USD 4.8 billion from the prior quarter, and the reserve ratio increased 4 basis points to 1.40 percent. The FDIC flagged weakness in certain loan portfolios and elevated unrealized losses as continuing areas of supervisory attention.

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