BANKING SYSTEM & CREDIT CONDITIONS · SEPTEMBER 5, 2026
FDIC Reports Broad Loan Growth and Improved Credit Metrics in Q2
The FDIC's second-quarter profile found total loans and leases up 1.8% from the prior quarter and 6.8% year over year, alongside lower past-due, nonaccrual, and net charge-off rates.
What the FDIC reported
The FDIC released its second-quarter 2026 Quarterly Banking Profile on August 25, covering 4,238 insured commercial banks and savings institutions. Aggregate net income was $90.1 billion, up 12.0% from the prior quarter, and industry return on assets was 1.37%. The agency said capital and liquidity levels remained strong.
- 01Loans grew broadly
- 02Deposits rose again
- 03Asset-quality metrics improved
Loan growth and credit quality
Total loans and leases increased 1.8% during the quarter and 6.8% from a year earlier. Commercial-and-industrial loans grew 6.3% year over year and nonfarm nonresidential commercial real estate loans grew 4.1%, while construction-and-development balances declined 3.4%. The FDIC also reported lower past-due, nonaccrual, and net charge-off rates from the prior quarter, while emphasizing that risks still vary across portfolios and institutions.
Practical borrower takeaway
Broad balance-sheet growth can support lender capacity, but it does not mean credit standards are uniform. Borrowers should document recent operating performance, leverage, liquidity, collateral, ownership, existing liens, and the proposed repayment source. Construction and transitional-property sponsors should also explain budget controls, contingencies, interest reserves, lease-up assumptions, and the path to permanent financing.
Healthy industry-level lending capacity does not replace transaction underwriting; borrowers should still demonstrate cash flow, liquidity, collateral support, and a credible plan for maturities and downside scenarios.
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