KBRA Financial Intelligence

KFI’s Quarterly Banking Overview: 2Q 2025

One-Fifth of US Banks Experience Change to their KFI Scores

KBRA Financial Intelligence (KFI) scored more than 9,000 banks and credit unions in 2Q 2025, with 449 banks having their scores increased quarter-over-quarter (QoQ), while 450 experienced reductions. An additional 3,420 institutions experienced no change to their KFI score from 1Q 2025.

The change in a combined 900 banks’ KFI Scores implies that more than 20% of all banks experienced an adjustment to their score in the latest quarter of data. That average number of banks experiencing a change to their KFI Score per quarter was 877 throughout the past year.

KFI Scores are proprietary quarterly financial assessment scores that measure the financial health of all U.S. banks and credit unions on an A through E scale using FFIEC and NCUA Call Report data. Our models incorporate various asset quality, capital adequacy, earnings performance, and liquidity and funding measures for managing counterparty risk and robust peer analysis. Get your institution’s KFI Score with a free trial of KBRA Financial Intelligence today.

Loans and Deposits Hit New Record Highs, Lending Margins Widen

Total loans extended by banks surpassed $13 trillion for the first time ever in 2Q 2025, growing at a rate of 2.1% QoQ. That was the fastest pace of loan growth recorded in three years. Notably, consumer and agriculture loans grew by 1.3% and 1.6%, respectively, while construction and development lending receded by 2.1%. Lending categorized as “other loans”, which largely encompasses loans for purchasing securities, as well as loans to states, political subdivisions, and nondepository financial institutions, surged by 9.8% QoQ.

Deposits, meanwhile, reached their own all-time high at 19.6 trillion. QoQ growth of 1% was slower than a 1.3% expansion in the quarter prior. Deposits remain relatively expensive – as compared to recent years – as the average cost of deposits among commercial banks held steady at 2%, remaining well-above the three-year moving average of 1.5%.

Despite deposit costs remaining relatively steep in 2Q 2025, a 1.6% gain in net interest income helped expand the average net interest margin (NIM, non-tax equivalent) among U.S. banks to 3.8%, up from 3.7%, and the highest level recorded by KFI since 2019. Additionally, banks’ non-interest income posted growth of 1.1% in the latest quarter, but that slowed significantly from a 6.5% surge in 1Q 2025.

The metrics above, as well as all data reported by U.S. banks in FFIEC call reports, Uniform Bank Performance Reports (UBPR), and GAAP financials can be identified and downloaded by utilizing the Data Wizard in KFI’s Excel add-in. To access our full library of KFI Scores and data tools, request a demo with KFI.