Large Banks

Return on assets for banks with $10B-$250B in assets increased to 1.24% in Q1 2026, up 18 basis points year-over-year from 1.06% and 7 basis points quarter-over-quarter from 1.17%, marking the highest ROA in the series shown and exceeding the national benchmark of 1.20% by 4 basis points. The YoY gain (+18 bps) substantially outpaced the QoQ gain (+7 bps), indicating the profitability expansion is decelerating but still positive. All 100 institutions in the tier reported positive ROA in Q1 2026, with a per-institution range of 0.1% to 4.31% and an equal-weighted mean of 1.28%, 4 basis points above the cohort aggregate.

Two forces drove the profitability improvement. Net interest margin widened 24 basis points YoY to 3.49% from 3.25% and 10 basis points QoQ from 3.39%, though the cohort's NIM of 3.49% trails the national average of 3.82% by 32 basis points. The efficiency ratio fell 100 basis points YoY to 54.01% from 55.01% and 53 basis points QoQ from 54.53%, positioning the cohort 10.14 percentage points below the national average of 64.14%. The QoQ pace of NIM expansion (+10 bps) is less than half the YoY pace (+24 bps), indicating the margin benefit is decelerating. The efficiency improvement is more consistent: the QoQ decline (-53 bps) is roughly half the YoY decline (-100 bps), suggesting steady operational leverage gains.

Specialization patterns are stark. Credit Card specialists posted ROA of 2.26% and NIM of 13.80%, 9.99 percentage points above the national NIM of 3.82%, with an efficiency ratio of 54.43%, 9.71 percentage points below the national average. Mortgage specialists trailed with ROA of 0.66% and faced efficiency headwinds at 76.96%, 12.81 percentage points above the national average. Agricultural specialists posted ROA of 1.37% and an efficiency ratio of 59.51%, 4.63 percentage points below national. Commercial banks, comprising 56.1% of the cohort, posted ROA of 1.20% and NIM of 3.92%, closely matching the national benchmarks. If the current pace of efficiency improvement continues (-50 bps per quarter over the two quarters shown), the cohort will reach sub-53% efficiency by Q3 2026.

Asset growth for banks with $10B-$250B in assets decelerated to 6.43% in Q1 2026 from 6.64% in Q4 2025, a 3.12 percentage point QoQ slowdown, but accelerated 97.65 percentage points year-over-year from 3.25% in Q1 2025, positioning the cohort 1.28 percentage points above the national benchmark of 5.15%. The YoY acceleration (+97.65 pp) far exceeds the QoQ deceleration (-3.12 pp), indicating the expansion is strong on a longer horizon but moderating in the most recent quarter. Among the 137 institutions with per-institution data, 89.1% are growing assets, with a range of -20.02% to 255.96% and an equal-weighted mean of 11.691%, substantially above the cohort aggregate of 6.43%.

Loan growth accelerated to 8.95% in Q1 2026, up 18.07 percentage points QoQ from 7.58% and 135.23 percentage points YoY from 3.80%, outpacing the national loan growth rate of 6.20% by 2.75 percentage points. Deposit growth accelerated to 6.84%, up 5.23 percentage points QoQ from 6.50% and 59.01 percentage points YoY from 4.30%, exceeding the national deposit growth rate of 5.02% by 1.82 percentage points. The composition of the move is clear: loan growth (+8.95%) is outpacing deposit growth (+6.84%) by 2.11 percentage points, mechanically tightening the loan-to-deposit ratio and driving the balance-sheet expansion. Among institutions with per-institution data, 91.9% are growing loans (range -14.91% to 230.16%, mean 14.621%) and 82.5% are growing deposits (range -58.82% to 289.35%, mean 11.527%). The equal-weighted per-institution means (14.621% loan growth, 11.527% deposit growth) substantially exceed the cohort aggregates (8.95%, 6.84%), indicating the largest banks in the tier are growing more slowly than the median institution.

The QoQ deceleration in asset growth (-3.12 pp) is modest relative to the YoY acceleration (+97.65 pp), suggesting the slowdown is a quarter-to-quarter fluctuation rather than a reversal of the expansion trend. Loan growth accelerated both QoQ (+18.07 pp) and YoY (+135.23 pp), while deposit growth also accelerated both QoQ (+5.23 pp) and YoY (+59.01 pp), indicating the cohort is expanding on both sides of the balance sheet. If the current pace of loan growth (+8.95% annualized) continues, the $10B-$250B cohort will add roughly $180 billion in loans over the next four quarters, assuming a stable base.

The delinquency ratio for banks with $10B-$250B in assets remained stable at 0.80% in Q1 2026, up only 1 basis point year-over-year from 0.79% and essentially flat quarter-over-quarter from 0.80%, positioning the cohort 10 basis points above the national benchmark of 0.70%. The nonperforming asset ratio also remained stable at 0.55%, up 3 basis points YoY from 0.53% and 1 basis point QoQ from 0.54%, sitting 5 basis points above the national average of 0.51%. Both metrics have shown minimal movement over the periods shown, indicating asset quality is holding steady despite the cohort's rapid loan growth of 8.95% YoY.

Two observations about the stability. First, the delinquency range among the 137 institutions with per-institution data is wide, spanning 0.0% to 19.57% with a mean of 1.017%, suggesting the aggregate masks significant institution-level variation. The cohort aggregate of 0.80% sits well below the per-institution mean of 1.017%, indicating the largest banks in the tier have lower delinquency than the median institution. Second, the stable delinquency profile (+1 bp YoY, flat QoQ) contrasts with the cohort's accelerating loan growth (+135.23 pp YoY, +18.07 pp QoQ), suggesting credit discipline is holding despite the rapid expansion. Tier 1 capital decreased to 13.40% from 13.53% QoQ (-13 bps) and from 13.57% YoY (-16 bps), positioning the cohort 85 basis points below the national benchmark of 14.26%. The QoQ decline (-13 bps) is roughly consistent with the YoY pace (-16 bps), indicating the capital compression is steady rather than accelerating.

Specialization patterns reveal divergence. Credit Card specialists posted delinquency of 2.57%, more than three times the cohort average of 0.80%, reflecting the higher-risk consumer credit profile of that specialization. Agricultural specialists posted delinquency of 0.63%, 17 basis points below the cohort average, while Mortgage specialists posted 0.57%, 23 basis points below. Commercial banks, comprising 56.1% of the cohort, posted delinquency of 0.72%, 8 basis points below the cohort average. If the current pace of capital compression continues (-13 bps per quarter over the two quarters shown), the cohort will reach 13.14% Tier 1 capital by Q3 2026, still well above the regulatory minimum but narrowing the cushion relative to the national average.

The loan-to-deposit ratio for banks with $10B-$250B in assets increased to 81.89% in Q1 2026, up 2.03 percentage points year-over-year from 79.86% and 32 basis points quarter-over-quarter from 81.57%, positioning the cohort 5.51 percentage points above the national benchmark of 76.38%. The YoY increase (+2.03 pp) substantially exceeded the QoQ increase (+0.32 pp), indicating the lending posture is tightening but at a decelerating pace. This marks the continuation of a multi-quarter trend toward higher loan deployment relative to the deposit base.

Two forces are driving the LDR expansion. Loan growth accelerated to 8.95% YoY, outpacing deposit growth at 6.84% YoY by 2.11 percentage points, mechanically compressing the funding cushion. Quarter-over-quarter, loan growth accelerated 18.07 percentage points while deposit growth accelerated only 5.23 percentage points, amplifying the gap. Noninterest-bearing deposit share remained stable at 20.04%, down only 3 basis points QoQ from 20.07% and up 4 basis points YoY from 20.00%, suggesting the deposit mix is holding steady despite the faster loan deployment. The cohort's NIB share of 20.04% trails the national average of 21.60% by 1.56 percentage points, indicating this tier relies more heavily on interest-bearing funding than the broader banking universe.

Within the $10B-$250B cohort, 82.5% of institutions are growing deposits and 91.9% are growing loans, but the range is wide: deposit growth spans -58.82% to 289.35% and loan growth spans -14.91% to 230.16%. The equal-weighted per-institution mean deposit growth of 11.527% exceeds the cohort aggregate of 6.84%, indicating the largest banks in the tier are growing deposits more slowly than the median institution. Net interest income as a percentage of revenue fell sharply to 0.22% from 0.91% QoQ, though it remained stable YoY at 0.22%, and sits 10 basis points below the national 0.32%. The QoQ decline suggests a one-time reporting or composition effect rather than a structural shift.