Community banks made nearly $30 billion in net income last year, up 22.5 percent from 2024, according to the FDIC’s Q4 Quarterly Banking Profile. .The increase was attributed to higher net interest income. Community banks’ net income fell 3.8 percent in the fourth quarter of 2025 to $7.9 billion amid higher noninterest expenses and securities losses.Quarterly ROA at community banks fell 11 basis points from the previous quarter but increased 28 basis points from the fourth quarter of 2024 to 1.35 percent. Community banks’ NIM increased four basis points from the previous quarter to an eight-year high of 3.77 percent.The country’s 4,336 FDIC-insured commercial banks and savings institutions made $77.7 billion in the fourth quarter, down 2 percent or $1.6 billion from the previous year. FDIC-supervised institutions had $295.6 billion in net income, up 10.2 percent from 2024. “The banking industry continued to maintain strong capital and liquidity levels, which support lending and protect against potential losses,” according to the FDIC. However, Q4 bank net income fell 2 percent or $1.6 billion to $77.7 billion, as several larger banks faced higher noninterest expenses and non-recurring items. Return on assets increased 8 basis points in 2025 to 1.20 percent as net income increased 10.2 percent or $295.6 billion from the previous year. Quarterly ROA dropped 3 basis points to 1.24 percent, but was still 13 basis points higher than its year-ago mark. Loans increased 2.0 percent from the third quarter, and nearly 6 percent on an annualized basis. Domestic deposits increased 1.8 percent, its sixth straight quarterly rise. “Loan growth accelerated in 2025, as did domestic deposit growth,” according to the Feb. 24 report. “Asset quality metrics remained favorable overall despite continued weakness in certain portfolios, which the FDIC continues to monitor closely.”.Other report findings included:Quarterly bank NIM increased to 3.39 percent, its highest mark since 2019, sparked by a 2.2 percent rise in net interest income from the third quarter. Unrealized losses on held-to-maturity and available-for-sale securities portfolios fell 9.2 percent or $31 billion to a nearly four-year low of $306 billion. Provision expenses were little changed from the third quarter at $20.9 billion. The Deposit Insurance Fund Reserve Ratio increased two basis points to 1.42 percent.
