Despite the vagaries in the national economy, the country’s banks overall are enjoying both a healthy loan growth and good rate of profitability, according to a new industry study.
Issued by the Board of Governors of the Federal Reserve System, the Supervision and Regulation Report notes that aggregate loan growth reached 5% last spring, with commercial and industry loans showing stronger numbers towards the second quarter than they started out with at the beginning of 2025.
The report also notes that “most major loan categories experienced declines in delinquency rates.”
As of the second quarter of this year, “over 99% of all banks were well capitalized,” continues the document. Even more, “stress tests showed that large banks are well positioned to weather a severe recession while maintaining minimum capital requirements and the ability to lend to households and businesses.”
The most recent healthy share of well capitalized banks has been in the 98% to 99% range since mid-2022. The last downturn was recorded during the Covid-19 pandemic years of spring 2020 to late 2021 when the figure dropped to around 95%.
By the fall of this year, continues the report, “median return on equity for large banks was 13%, compared with 12% in the second quarter of 2025.” That increase was driven by “growth in net revenue and lower credit loss provisions, which outweighed higher operating expenses.”
That net revenue growth, meanwhile, was “driven by increased net interest income, as well as higher investment banking and wealth management fees.”
A separate report just issued by the Federal Deposit Insurance Corporation says that the U.S. banking industry saw its profits increase in the third quarter of this year by 13.5% for a total of $79.3 billion.
The FDIC report added, however, that the industry remains burdened with high past-due auto, credit card, and commercial real estate loans.
December 4, 2025
By Garry Boulard
Vintage 1960s postcard
