$1b-$10b Banks

Return on assets for banks with $1B-$10B in assets increased to 1.23% in Q1 2026 from 1.16% in Q4 2025, a 7-basis-point quarterly gain, and increased 19 basis points from 1.04% a year ago, marking the strongest profitability in the data series shown. The cohort now exceeds the national benchmark of 1.20% by 3 basis points. The YoY improvement (+19 bps) substantially outpaced the QoQ gain (+7 bps), signaling accelerating profitability momentum. The distribution data shows that 97.7% of banks with $1B-$10B in assets are profitable (positive ROA), with a mean of 1.363% and a range from -6.85% to 38.77%, confirming that profitability is broad-based across the cohort.

Net interest margin increased 6 basis points QoQ to 3.63% from 3.58%, and increased 23 basis points YoY from 3.40%, driving the ROA expansion. The cohort's NIM sits 18 basis points below the national benchmark of 3.82%, reflecting the cohort's position between the wider spreads of smaller institutions and the compressed margins of the largest banks. The efficiency ratio decreased 1.06 percentage points QoQ to 59.92% from 60.98%, and decreased 3.50 percentage points YoY from 63.42%, now 4.22 percentage points below the national average of 64.14%. The mechanical relationship is clear: NIM expansion (+6 bps QoQ, +23 bps YoY) combined with efficiency gains (-1.06 pp QoQ, -3.50 pp YoY) drove the 7-basis-point QoQ and 19-basis-point YoY ROA improvement. Noninterest income as a percentage of revenue held stable at 0.26%, up only 0.004 percentage points YoY, indicating that profitability gains are driven by net interest income, not fee diversification.

Specialization dynamics reveal the profitability spread. Credit Card specialists posted 2.26% ROA and 13.80% NIM, 9.99 percentage points above the national NIM benchmark of 3.82%, while maintaining a 54.43% efficiency ratio, 9.71 percentage points below the national average of 64.14%. Agricultural specialists posted 1.37% ROA and 3.84% NIM with a 59.51% efficiency ratio, 4.63 percentage points below national. Commercial banks, representing 56.1% of the cohort, posted 1.20% ROA and 3.92% NIM with a 64.09% efficiency ratio. Mortgage specialists lagged at 0.66% ROA and 3.19% NIM with a 76.96% efficiency ratio, 12.81 percentage points above the national average, reflecting the capital-intensive, low-margin nature of mortgage origination. If the current QoQ pace of efficiency improvement (-1.06 pp per quarter) continues, the cohort will reach the 58% threshold by Q3 2026.

Asset growth for banks with $1B-$10B in assets decelerated to 6.24% in Q1 2026 from 6.30% in Q4 2025, a 0.97-percentage-point quarterly slowdown, but accelerated 19.03 percentage points from the 5.24% YoY pace. The cohort's asset growth remains 1.09 percentage points above the national benchmark of 5.15%. The YoY acceleration (+19.03 pp) substantially outpaced the QoQ deceleration (-0.97 pp), signaling that the long-term growth trajectory remains strong despite a modest quarterly slowdown. The distribution data shows that 85.8% of banks with $1B-$10B in assets are growing assets, with a mean of 7.993% and a range from -49.97% to 424.92%, confirming that growth is broad-based across the cohort.

Loan growth accelerated to 6.77% in Q1 2026 from 6.40% in Q4 2025, a 5.76-percentage-point quarterly acceleration, and accelerated 13.87 percentage points from the 5.94% YoY pace, now 57 basis points above the national benchmark of 6.20%. Deposit growth decelerated slightly to 6.33% from 6.34% QoQ, a 10-basis-point slowdown, and decelerated 8.02 percentage points from the 6.88% YoY pace, but remains 1.31 percentage points above the national benchmark of 5.02%. The mechanical relationship is clear: loan growth accelerated both QoQ (+5.76 pp) and YoY (+13.87 pp), while deposit growth decelerated both QoQ (-0.10 pp) and YoY (-8.02 pp), creating the 20-basis-point QoQ LDR decline from 84.99% to 84.79% but leaving the YoY LDR 28 basis points higher than a year ago at 84.50%. Asset growth at 6.24% sits between loan growth at 6.77% and deposit growth at 6.33%, reflecting the cohort's balanced expansion across earning assets and funding sources.

The distribution data reveals that 83.6% of banks with $1B-$10B in assets are growing loans, with a mean of 8.653% and a range from -80.69% to 400.2%, while 82.9% are growing deposits, with a mean of 7.911% and a range from -75.16% to 422.27%. The wide ranges suggest that while the majority of institutions are expanding, a meaningful minority (14.2% on assets, 16.4% on loans, 17.1% on deposits) are contracting. Agricultural specialists showed a 3.45-percentage-point YoY decline in efficiency ratio to 59.51%, suggesting that this specialization is managing growth while improving operating leverage. If the current QoQ pace of loan growth acceleration (+5.76 pp per quarter over the two quarters shown) continues, the cohort will reach an 8% loan growth rate by Q2 2026.

Delinquency for banks with $1B-$10B in assets increased to 0.71% in Q1 2026 from 0.66% in Q4 2025, a 5-basis-point quarterly increase, and increased 11 basis points from 0.60% a year ago. The cohort now sits 2 basis points above the national benchmark of 0.70%. The YoY increase (+11 bps) outpaced the QoQ increase (+5 bps), signaling accelerating credit stress rather than stabilization. The distribution data shows a delinquency range from 0.0% to 37.07% with a mean of 0.889%, revealing that while the cohort average remains low, a subset of institutions faces elevated problem loans.

The nonperforming asset ratio held stable at 0.56% in Q1 2026 from 0.53% in Q4 2025, a 3-basis-point quarterly increase, but increased 10 basis points from 0.47% a year ago. The cohort's NPA ratio sits 6 basis points above the national benchmark of 0.51%. The mechanical relationship is clear: delinquency increased 5 basis points QoQ while NPAs increased only 3 basis points QoQ, suggesting that some delinquent loans are being resolved or written down before migrating to nonperforming status. The YoY NPA increase (+10 bps) is consistent with the YoY delinquency increase (+11 bps), confirming that credit quality has deteriorated over the past year. Tier 1 capital increased 6 basis points QoQ to 13.58% from 13.52%, and increased 28 basis points YoY from 13.30%, but remains 68 basis points below the national benchmark of 14.26%, reflecting the cohort's position between the higher capital ratios of smaller institutions and the lower ratios of the largest banks.

Specialization dynamics reveal the credit-quality spread. Credit Card specialists posted 2.57% delinquency, 187 basis points above the national benchmark of 0.70%, reflecting the higher-risk, higher-return nature of unsecured consumer lending. Agricultural specialists posted 0.63% delinquency, 7 basis points below national, while Commercial banks posted 0.72% delinquency, 2 basis points above national. Mortgage specialists posted 0.57% delinquency, 13 basis points below national, reflecting the secured nature of residential mortgage lending. The capital cushion at 13.58% provides 8.58 percentage points of buffer above the 5.0% minimum Tier 1 leverage ratio, but the 68-basis-point gap to the national benchmark suggests that the cohort operates with less capital headroom than the broader banking universe. If the current QoQ pace of delinquency increase (+5 bps per quarter over the two quarters shown) continues, the cohort will reach 0.80% delinquency by Q3 2026.

The loan-to-deposit ratio for banks with $1B-$10B in assets decreased to 84.79% in Q1 2026 from 84.99% in Q4 2025, a 20-basis-point quarterly decline, but remained 28 basis points above the year-ago level of 84.50%. The cohort's LDR sits 8.41 percentage points above the national benchmark of 76.38%, reflecting a more aggressive lending posture relative to the broader banking universe. The QoQ decline signals modest liquidity improvement as deposit growth outpaced loan growth, while the YoY increase confirms a sustained shift toward higher loan utilization over the past year.

Deposit growth decelerated slightly to 6.33% in Q1 2026 from 6.34% in Q4 2025, a 10-basis-point QoQ slowdown, and decelerated 8.02 percentage points from the 6.88% YoY pace. Despite the deceleration, deposit growth remains 1.31 percentage points above the national benchmark of 5.02%. Loan growth accelerated to 6.77% from 6.40% QoQ, a 5.76-percentage-point acceleration, and accelerated 13.87 percentage points from the 5.94% YoY pace, now 57 basis points above the national benchmark of 6.20%. The mechanical relationship is clear: loan growth outpaced deposit growth on a YoY basis (6.77% versus 6.33%), compressing the LDR from 84.50% a year ago to 84.79% today, while the QoQ reversal (deposit growth at 6.33% versus loan growth at 6.77%) allowed a modest 20-basis-point LDR decline. Noninterest-bearing deposit share decreased 20 basis points QoQ to 20.63% from 20.83%, and decreased 41 basis points YoY from 21.04%, now 96 basis points below the national benchmark of 21.60%.

The distribution data reveals that 82.9% of banks with $1B-$10B in assets are growing deposits, with a mean deposit growth rate of 7.911% and a range from -75.16% to 422.27%. Loan growth shows a similar pattern: 83.6% of institutions are growing loans, with a mean of 8.653% and a range from -80.69% to 400.2%. The NIB share decline is broad-based, reflecting deposit mix normalization across the cohort as customers shift toward interest-bearing products. If the current QoQ pace of NIB share decline (-20 bps per quarter over the two quarters shown) continues, the cohort will reach the 20% threshold by Q3 2026.