Key insights
- US banks reported a profit increase in Q1 2026, driven by deposit growth. While overall asset quality is favorable, rising past-due loans in residential and commercial real estate, credit cards, and autos present a potential concern. Strong capital and liquidity levels provide a buffer, but the mixed signals warrant monitoring for future impact on bank earnings and lending activity.
By Pete Schroeder
WASHINGTON, May 27 (Reuters) - U.S. banks reported a 3.6% increase in their profits in the first quarter of 2026, rising to $80.5 billion as domestic deposits grew again and banks set aside slightly more against potential losses, the Federal Deposit Insurance Corporation reported Wednesday.
The FDIC reported that bank deposits had risen for the seventh consecutive quarter, and while bank provision expenses were up 2.3% in the first quarter, they were lower than a year prior.
The FDIC said asset quality metrics remained favorable, with the level of past due loans falling slightly. However, it noted that past due levels for residential loans and commercial real estate rose slightly, and levels remained elevated for loans for credit cards, autos, and multifamily commercial real estate.
FDIC Chairman Travis Hill said in a statement that bank capital and liquidity levels remained strong.