U.S. Banks Exit 2025 Strong but Credit Stress and Funding Pressure Are Rising, BlastPoint Finds

PITTSBURGH, May 22, 2026 — BlastPoint's new analysis of FDIC call report data shows U.S. banks closing 2025 with improved profitability industry-wide, but with credit and funding pressure rising on two fronts. Loan delinquency is climbing year-over-year at 958 banks, and non-interest-bearing deposit share is slipping at another 98 — the same leading indicator that flashed before the 2023 failures of Silicon Valley Bank, Signature Bank, and First Republic Bank. Fifty-two banks are firing both signals at once.

The deposit-side reading is one of several concurrent stress patterns the analysis surfaces across the industry. BlastPoint's Banking Scorecard scores every active FDIC-insured bank against 12 behavioral signals drawn from eight quarters of FDIC call report data, and the Q4 2025 readings show pressure building along multiple fault lines.

Credit and capital are both under pressure

Loan delinquency is climbing year-over-year at 958 banks — more than one in five U.S. institutions — and the deterioration is showing up most sharply where banks have also been pushing for growth. A separate 757 institutions are expanding loan portfolios faster than peers even as credit-quality conditions weaken on the same balance sheets, a combination that historically precedes elevated loss rates. Another 604 banks are running close to the limits of their deposit base, with loan-to-deposit ratios already in strained territory.

The cushions that absorb those losses are thinning at the same time. Some 371 banks with $500M-$5B in assets now sit in the bottom quartile of the well-capitalized Tier 1 range within their peer group, with ratios bottoming out at 8.2 percent and a median of 10.4 percent. All remain above the regulatory minimum, but visibly thinner than peers. The pressure runs in the opposite direction at the top of the market: Tier 1 capital fell year-over-year at the largest banks, down 0.23 points at $25B-$250B banks and 0.34 points at $250B+ banks, even as $500M-$5B banks rebuilt theirs.

The operating divide

These stresses don’t hit the industry evenly. The operating divide between $25B-$250B and $500M-$5B banks now stands at 8.1 percentage points. Banks with $25B-$250B in assets grew 8.7 percent year-over-year, against 7.1 percent at banks with $500M-$5B. Technology spend drives the advantage: Cherry Bekaert's 2026 Banking Industry Report estimates $25B-$250B banks invest roughly ten times what $500M-$5B banks spend on customer data, automation and digital infrastructure per dollar of revenue.

The largest banks deploy that spend toward real-time pricing of risk and continuous deposit-acquisition campaigns. Smaller banks running on quarterly reports lag those decisions by months, and the result is the efficiency gap visible in the latest call report data.

"The patterns that move market share rarely show up in earnings reports until it’s too late to act on them," said Tomer Borenstein, co-founder and chief technology officer at BlastPoint. "We built this so any banker can see the heat map of the next 12 months in 90 seconds, on any institution in the country."

M&A returns as structural forces tighten

All of these signals land against an unusual M&A backdrop. The first quarter of 2026 produced 53 announced bank deals, the largest Q1 by combined deal value since 2019 and the largest deal count since the fourth quarter of 2021. The Basel III Endgame was re-proposed in March 2026 as capital-neutral, lifting the capital-cost overhang on the largest banks and unblocking large-bank mergers. Community-bank M&A is supply-driven, fed by aging leadership teams and shareholder pressure. The 371 $500M-$5B banks now showing bottom-quartile capital ratios are the named, ranked targets that supply meets.

Beyond the deal flow itself, other structural forces are tightening the squeeze on the consumer-checking franchise that anchors community-bank net interest margins. Non-interest-bearing deposit share has continued drifting lower industry-wide as savers rotate to money-market and CD products. Chime's launch of Chime Prime and SoFi's move up-market into the mass-affluent segment add fresh pressure on operating deposits. Non-owner-occupied commercial real estate delinquency at the largest banks has fallen for five consecutive quarters to 4.06 percent in Q4 2025 but remains roughly seven times the pre-pandemic average, with a $2 trillion CRE maturity wall through 2027 still ahead.

Each of these signals can be traced to a named institution on the public scorecard. The full scorecard, with state-by-state leaderboards sorted by signal, is free at bankingscorecard.blastpoint.com.