US banks post profit growth as deposits climb for seventh quarter
The Federal Deposit Insurance Corporation reported a 3.6% rise in profits for the first quarter of 2026, driven by sustained deposit growth despite higher provisions for potential losses.
U.S. banks reported a 3.6% increase in profits for the first quarter of 2026, reaching $80.5 billion, according to the Federal Deposit Insurance Corporation. The data, released on Wednesday, indicates that domestic deposits grew for the seventh consecutive quarter, providing a stable funding base for the institutions.
While the sector saw earnings growth, banks set aside slightly more capital against potential losses. Provision expenses rose by 2.3% in the first quarter, although this figure remained lower than the same period the previous year. The FDIC noted that overall asset quality metrics remained favourable, with the general level of past-due loans falling slightly.
FDIC Chairman Travis Hill stated that bank capital and liquidity levels remained strong. This assessment underscores the resilience of the banking system, even as specific areas of the loan book show signs of stress. The regulator highlighted that past-due levels for residential loans and commercial real estate rose slightly during the quarter.
Concerns also persist in other segments of the credit market. The FDIC noted that past-due levels remained elevated for loans related to credit cards, autos, and multifamily commercial real estate. These pockets of weakness present ongoing challenges for lenders managing their risk exposures.
The report comes as the financial sector navigates a complex macroeconomic environment. The combination of strong deposit growth and solid capital positions suggests that U.S. banks are well-positioned, despite the elevated delinquency rates in specific consumer and commercial lending categories.
