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.
The ratio of uninsured deposits to total deposits held by U.S. commercial banks increased slightly in the fourth quarter of 2025, to 43.3%. This ratio reached a 20-year peak of 47.4% in late 2021, thanks to an influx of COVID-19-related stimulus payments to consumers and businesses and increases in interest rates that made bank deposits more attractive relative to alternatives; before the pandemic, the ratio stood at 43.3% in the fourth quarter of 2019.
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U.S. banks collected nearly $66 billion in interchange, or “swipe,” fees in 2025, up from $64 billion in 2024 and $52 billion in 2021. Factors that influence the volume of interchange revenues collected by banks include card usage, the price level of purchased goods and services, alternative payment options and overall economic conditions.
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Core deposit growth at U.S. commercial banks accelerated in the first three quarters of 2025, by about 4% compared with 1.5% through the first three quarters of 2024. This was a welcomed improvement given that lending by banks also was higher in 2025, and banks use deposits to fund loans.
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