Following robust agricultural loan growth in 2025, the value of outstanding agricultural loans at U.S. community banks stood at $162.6 billion at the end of the first quarter of 2026, up 4.6% from a year ago.1 Growth was particularly pronounced in agricultural production loans, which increased by 6.1% year-over-year.
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The allowance for credit losses (ACL) coverage ratio for the U.S. banking system remained stable in the first quarter of 2026, decreasing slightly to 1.66% from 1.67% in the preceding quarter.
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U.S. banks added $65 billion in Treasury securities to their balance sheets in the first quarter of 2026, bringing total holdings to $1.8 trillion and up from approximately $700 billion just prior to the COVID-19 pandemic.
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The net interest margin (NIM) of the banking industry contracted in the first quarter of 2026 to 3.22%, down from 3.30% in the fourth quarter of 2025, because of declining asset yields. Nevertheless, NIMs remain robust when compared with the levels seen in 2021 and early 2022, buoyed by a favorable interest-rate environment and healthy loan demand.
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From 2020 to 2025, the number of U.S. banks declined by 13% while average asset size per institution grew 33% to $5.8 billion.
Since the COVID-19 pandemic, the number of U.S. banks continued its steady decline while average assets per institution rose, reflecting consolidation, limited new bank creation and continued balance-sheet growth among surviving institutions. This analysis examines the 2020-2025 period, but both industry consolidation and reduced de novo bank formation are long-term trends that have been underway for decades. For context, there were more than 14,000 FDIC-insured institutions during the early to mid-1980s.