Unrealized losses at US banks rose in the first quarter of 2026, indicating a quarter-on-quarter increase from the fourth quarter of 2024.
According to the latest report Among the institutions under the Federal Deposit Insurance Corporation (FDIC), US banks recorded a rise in unrealized losses of slightly more than six percent in the first quarter.
“Non-performing loans rose $19.0 billion, or 6.2 percent, from the prior quarter to $325.1 billion. The 30-year mortgage rate remained low in the first two months of the quarter but rose in March, lowering the cost of credit protections reported by banks and increasing unrealized losses.”
As such, the FDIC says that large unrealized losses and weaknesses in other credit facilities “remain issues of constant oversight.”
Amid the rise in the number of defaults, the FDIC says the number of financial institutions on the “Problem Bank List” fell in the first quarter.
“The number of banks on the list decreased by a net of six in the first quarter to 54 banks. The number of troubled banks was 1.3 percent of all banks, which is in the normal range of 1 to 2 percent for periods that were not troubled. Three banks opened and one bank failed in the first quarter.”
The Problem Bank List is a list of banks with financial problems based on a rating system that examines the amount of capital, quality of assets, management, earnings, liquidity and exposure to market risk, a framework developed by CAMELS.
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