By Ray Birch
PITTSBURGH—Nearly half of U.S. banks are showing year-over-year deterioration in credit quality even as industry profits, lending and deposits continue to climb, according to a new BlastPoint analysis of second-quarter FDIC data.
BlastPoint found 48% of U.S. banks reported a higher noncurrent loan rate than a year earlier, and the median bank's rate increased 15%, from 0.40% in the second quarter of 2025 to 0.46% in the latest period.
The finding provides a counterpoint to the generally positive picture presented in the FDIC’s latest Quarterly Banking Profile, which emphasized quarter-over-quarter improvements in asset-quality measures.
“That’s not a crisis-defining headline, but I think it is the signal of potentially a larger trend to pay attention to,” Christopher Medina, go-to-market engineer for BlastPoint, told CUToday.info. “The overall credit risk profile may be beginning to change."
The FDIC reported aggregate bank net income rose $9.7 billion, or 12%, from the first quarter to $90.1 billion. Return on assets reached 1.37%, loan balances increased 1.8% during the quarter and 6.8% from a year earlier, and domestic deposits grew for an eighth consecutive quarter. Community bank earnings rose 8.2% to $8.7 billion.
BlastPoint reached its more cautionary conclusion by extending the analysis beyond the FDIC’s headline quarter-to-quarter comparison. Its Banking Scorecard examines year-over-year trends across individual institutions, making it possible to see how widely a change is distributed instead of relying only on an industry aggregate that can be heavily influenced by the nation’s largest banks.
The consumer portfolio is producing the clearest warning signal. BlastPoint said credit cards had a 2.81% past-due or nonaccrual rate, roughly twice the rate for all loans combined, along with an annualized net charge-off rate of approximately 4%. By comparison, noncurrent rates were about 1.5% for nonfarm nonresidential real estate loans and 1.4% for multifamily loans. Among community banks, commercial and industrial loans represented the highest noncurrent category at 1.25%.
Those figures do not suggest broad banking distress, but they could help credit unions identify where competitors may be tightening underwriting, adjusting pricing or pulling back from particular borrowers. They also allow CU leaders to compare their own portfolio performance with that of banks operating in the same market rather than looking only at credit union averages, Medina said.
The analysis also found a continuing size divide in bank performance. Banks with between $100 million and $1 billion in assets posted an average net interest margin of approximately 3.9%, compared with about 2.9% among institutions with more than $250 billion.
Returns on assets were more tightly grouped, ranging from 1.17% to 1.32% across the major asset bands, while BlastPoint identified a nine-percentage-point efficiency-ratio gap between $10-billion-to-$250-billion banks and those with $100 million to $1 billion.
Look Beyond Traditional CU Peer Comparisons
The Banking Scorecard, launched with first-quarter 2026 data, currently ranks more than 4,200 FDIC-insured banks across 12 financial measures, including return on assets, net interest margin, efficiency ratio, capital, loan-to-deposit ratio and credit quality. It also assigns performance “signatures” intended to flag conditions such as deposit pressure, margin compression or growing credit risk. Institutions can be compared nationally, by state and against banks of similar asset size.
BlastPoint previously developed a corresponding CU Scorecard using NCUA Call Report data. As CUToday.info reported when the Banking Scorecard was introduced, the addition allows credit unions to look beyond traditional CU peer comparisons and evaluate the banks competing with them for deposits, auto loans, mortgages and business relationships.
Medina said a credit union can, for example, compare its deposit growth, efficiency, return on assets and credit performance with nearby banks, then examine whether those competitors are more heavily concentrated in commercial, consumer or real-estate lending. The objective is not simply to rank institutions, he said, but to develop a better-supported view of a local market before making decisions about rates, products, marketing and branches.
The scorecards also feed BlastPoint’s “battlecards,” a baseball-card-style format that places two to four banks or credit unions side by side. Each card provides an institutional snapshot, key financial measures benchmarked against the institution’s regulatory peers, and its strongest and weakest performance signals.
Medina said that kind of competitive intelligence is becoming more important as midmarket banks and credit unions fight for growth while confronting consolidation, aging customer or member bases and the cost of digital investments. Institutions that understand both their own portfolio strengths and the vulnerabilities of nearby competitors, he argued, are better positioned to find areas where they can stand out.
“Having a smart thesis on what your competitor banks or credit unions in your area are actually doing is going to be increasingly critical,” Medina said. “If you’re not paying attention to this data, you’re going to be next on the acquisition hit list.”
Q2 NCUA Call Report data is expected out shortly, and BlastPoint said its CU Scorecard analysis will follow in the coming weeks. “Given what the bank data is showing on credit quality, the credit union read may be worth watching closely,” the company said.