The U.S. banking sector recorded a 13.5% rise in profits during Q3 2025, reaching $79.3 billion, according to new data from the Federal Deposit Insurance Corporation. The increase was largely driven by growth in non-interest income and a decline in loss provision expenses, especially following the merger between Capital One and Discover Financial earlier in the year.
Despite the overall positive performance, regulators highlighted ongoing challenges in the industry. Past-due loan rates remain historically high across categories such as commercial real estate, auto loans, and credit cards. Large banks with more than $250 billion in assets reported a 4.18% past-due rate on non-owner-occupied commercial real estate loans lower than last year's peak of 4.99%, yet still significantly higher than pre-pandemic levels.
Across the system, the total past-due rate stayed unchanged at 1.49% of all loans, remaining below the pre-pandemic average. Regulators noted that strong capital and liquidity positions continue to support lending activity and protect banks against potential losses.
Banks also posted their fifth consecutive quarter of deposit growth, adding $88.6 billion in uninsured deposits, a 1.1% increase from the previous quarter. Meanwhile, the number of institutions classified as "problem banks" fell slightly to 57, and the overall number of U.S. banks declined by 42 due to mergers and acquisitions.
