FDIC-insured institutions posted collective net income of $90.1 billion in Q2 2026, up 12% from the $80.5 billion recorded in Q1. This $9.7 billion improvement came alongside 1.8% loan growth during the quarter, translating to a 6.8% annualized pace, primarily driven by commercial and industrial lending and loans to nondepository financial institutions. Net interest margin edged up to 3.32% while domestic deposits grew for the eighth consecutive quarter. Community banks outperformed with 8.2% quarter-over-quarter net income growth and pretax return on assets of 1.53%. Unrealized losses on securities however rose to $326.7 billion, a reminder that higher interest rates continue to cast a shadow over bank balance sheets.
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