FDIC: Deposits Inch Higher in Q2
A press release, entitled, "FDIC-Insured Institutions Reported Return on Assets of 1.37 Percent and Net Income of $90.1 Billion in Second Quarter 2026," comments, "The Federal Deposit Insurance Corporation (FDIC) ... released the results of its latest `Quarterly Banking Profile, a comprehensive summary of financial results based on reports from 4,238 insured commercial banks and savings institutions <b:>`_. In second quarter 2026, FDIC-insured institutions reported a return on assets (ROA) ratio of 1.37 percent and aggregate net income of $90.1 billion, an increase of $9.7 billion (12.0 percent) from the prior quarter. The banking industry continued to maintain strong capital and liquidity levels, which support lending and protect against potential losses." The FDIC Quarterly Banking Profile Second Quarter 2026 statement says, "The primary drivers of the industry's $9.7 billion increase in net income were higher noninterest income (up $5.5 billion, or 6.1 percent), mostly due to trading revenues given continued market volatility and higher fee income, and securities gains, primarily from one-time gains on equity security transactions (up $5.5 billion). Net interest income (up $5.3 billion, or 2.8 percent) also contributed to the increase in net income. Industry gains were partially offset by higher noninterest expense, which increased $4.4 billion, or 2.8 percent.... The industry's NIM increased to 3.32 percent, up 1 basis point from the prior quarter and up 6 basis points from the year-ago quarter…. During the quarter, the yield on earning assets increased slightly more than the cost of funds, resulting in a 1 basis point increase in the industry’s NIM." The release continues, "Domestic deposits increased for the eighth consecutive quarter, rising 0.8 percent during the second quarter. Estimated uninsured domestic deposits accounted for all of the increase in domestic deposits from the prior quarter, as insured deposits decreased slightly." It adds, "The Deposit Insurance Fund (DIF) was $161.1 billion on June 30, 2026, up $3.7 billion from the first quarter..... The reserve ratio, which is calculated as the ratio of the DIF to estimated insured deposits, increased 5 basis points in the second quarter to 1.48 percent and was 12 basis points higher than the year-ago quarter. In conclusion, the banking industry continued to show resilience in second quarter 2026. The industry saw robust loan and deposit growth during the quarter. Strong capital and liquidity levels continued to support lending and protect against potential losses. However, the industry still faces weakness in certain loan portfolios and elevated unrealized losses. These issues will remain matters of ongoing supervisory attention by the FDIC."
