The banking industry is largely healthy, according to a report issued Wednesday by the Federal Reserve summarizing 2025 conditions, but there are some warning signs such as in delinquent loans.
In its Supervision and Regulation Report for 2025, the central bank said that the nation’s banking system maintains strong capital, liquidity levels and profitability as well as healthy loan growth. “U.S. banks are well positioned to continue to support a growing economy,” the agency said.
More than 99% of all banks were well capitalized at the end of 2025 with aggregate common equity tier 1 risk-based capital ratios near 13% for all banks. That is unchanged from the year before, the report noted.
However, while loan growth was strong (in all types of loans), delinquencies inched upward over several loan categories, the report noted.
“Consumer, CRE (commercial real estate), C&I (construction and industrial) , and residential real estate (RRE) loans all showed slightly higher delinquency rates by the end of 2025, generally consistent with year-earlier levels,” the report stated.
Those delinquencies moved the overall rate to 1.6%, up from 2024 (about 1.5%), but still well below the historical average of about 3%, according to the report.
Consumer loan delinquencies were the highest among all loan categories at year’s end at about 3% (driven by auto and credit card loan delinquencies); RRE was second highest, about 2.1%. Delinquencies in both categories were on the rise in the latter half of the year, the report shows.
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