Federal Regulatory Agencies
Here's a look at documents from federal regulatory agencies
Featured Stories
SEC Penalizes 777 Partners Executive in $300 Million Fraud Case
WASHINGTON, Feb. 25 -- The Securities and Exchange Commission has issued an order instituting public administrative proceedings pursuant to Rule 102(e) of the commission's Rules of Practice, Making Findings and Imposing Remedial Sanctions (File No. 3-22596) against Damien Alfalla, a certified public accountant. This action follows a Dec. 16, 2025, final judgment by consent that permanently enjoined Alfalla from future violations of the Securities Exchange Act of 1934 and the Securities Act of 1933.
Alfalla, 49, of Pelham, New York, served as the Chief Financial Officer and a board member of Miami-based
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WASHINGTON, Feb. 25 -- The Securities and Exchange Commission has issued an order instituting public administrative proceedings pursuant to Rule 102(e) of the commission's Rules of Practice, Making Findings and Imposing Remedial Sanctions (File No. 3-22596) against Damien Alfalla, a certified public accountant. This action follows a Dec. 16, 2025, final judgment by consent that permanently enjoined Alfalla from future violations of the Securities Exchange Act of 1934 and the Securities Act of 1933.
Alfalla, 49, of Pelham, New York, served as the Chief Financial Officer and a board member of Miami-based777 Partners LLC and 600 Partners LLC until February 2024. The Commission alleged that Alfalla misled investors during a preferred equity offering by claiming the entities had sufficient income to pay promised dividends. However, Alfalla failed to disclose a $300 million overdraw of a credit facility, a fact that would have impacted the ability to pay such dividends.
The administrative action is linked to a broader legal matter in the United States District Court for the Southern District of New York. In a parallel criminal case, Alfalla pled guilty to conspiracy to commit wire fraud, wire fraud, conspiracy to commit securities fraud, and securities fraud. By entering an offer of settlement, Alfalla admitted to the jurisdiction of the Commission and the findings regarding his conduct.
Effective immediately, the Commission has suspended Alfalla from appearing or practicing before it as an accountant. This sanction reflects the determination that a suspension is in the public interest given the permanent injunction and criminal convictions for misconduct involving federal securities laws.
-- Vidhi Gianani, Targeted News Service
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Original text here: https://www.sec.gov/files/litigation/admin/2026/34-104879.pdf
SEC Obtains Final Consent Judgments Involving Alleged Insider Trading Case
WASHINGTON, Feb. 25 -- The Securities and Exchange Commission issued the following litigation release (No. 1:23-cv-06438; S.D.N.Y. filed July 26, 2023):
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Securities and Exchange Commission v. Joseph C. Lewis, et al., No. 1:23-cv-06438 (S.D.N.Y. filed July 26, 2023)
The Securities and Exchange Commission announced today the entry of final consent judgments as to Joseph C. Lewis, Carolyn W. Carter, Patrick J. O'Connor, and Bryan L. Waugh in the SEC's civil enforcement action against Lewis, his then-girlfriend Carter, and his private pilots, O'Connor and Waugh.
According to the SEC's complaint,
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WASHINGTON, Feb. 25 -- The Securities and Exchange Commission issued the following litigation release (No. 1:23-cv-06438; S.D.N.Y. filed July 26, 2023):
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Securities and Exchange Commission v. Joseph C. Lewis, et al., No. 1:23-cv-06438 (S.D.N.Y. filed July 26, 2023)
The Securities and Exchange Commission announced today the entry of final consent judgments as to Joseph C. Lewis, Carolyn W. Carter, Patrick J. O'Connor, and Bryan L. Waugh in the SEC's civil enforcement action against Lewis, his then-girlfriend Carter, and his private pilots, O'Connor and Waugh.
According to the SEC's complaint,filed in federal district court in the Southern District of New York, Lewis obtained material, nonpublic information about two public companies through his majority ownership and control of a biotechnology investment fund. As alleged, Lewis then violated a duty of trust and confidence by tipping this information to Carter, who realized ill-gotten profits by trading in the stock of both companies on the basis of this information. Separately, the complaint alleged that Lewis tipped information about one of the companies to O'Connor and Waugh, who realized ill-gotten profits by trading in that company's stock on the basis of this information.
The Court entered the final judgments as to Lewis and Carter on November 26, 2024 and February 13, 2025, respectively, and entered the final judgments as to O'Connor and Waugh on February 4, 2026. Carter and Waugh neither admitted nor denied the allegations in the SEC's complaint. The final judgments permanently enjoin the defendants from violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and order them to pay penalties, disgorgement, and prejudgment interest in the following amounts:
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Penalty ... Disgorgement ... Prejudgment Interest
Lewis ... $1,636,645.11 ... - ... -
Carter ... $241,154.81 ... $241,154.81 ... $43,589.44
O'Connor ... $24,221.53 ... $171,886.12 ... $29,257.46
Waugh ... $33,126.86 ... $132,507.44 ... $22,554.64
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The SEC's litigation was conducted by Carina Cuellar and Timothy Work and supervised by Jim Carlson and Jim Connor. The SEC's investigation was conducted by Mr. Work, with assistance from Howard Kaplan, Yongping Zheng, and Kevin Gershfeld, under the supervision of Kevin Guerrero and Mark Cave. The SEC appreciates the assistance of the U.S. Attorney's Office for the Southern District of New York, the Federal Bureau of Investigation, the Financial Industry Regulatory Authority, the Department of Homeland Security, U.S. Customs and Border Protection, the Federal Aviation Administration, the Securities Commission of the Bahamas, the Swiss Financial Market Supervisory Authority, the Australian Securities and Investments Commission, the National Securities Commission of Argentina, the Central Bank of Uruguay, the UK Financial Conduct Authority, the Cayman Islands Monetary Authority, the Isle of Man Financial Services Authority, and the Autorite des marches financiers of Quebec.
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Resources
* Final Judgment - Joseph C. Lewis (https://www.sec.gov/files/litigation/litreleases/2026/judg26489-lewis.pdf)
* Final Judgment - Carolyn W. Carter (https://www.sec.gov/files/litigation/litreleases/2026/judg26489-carter.pdf)
* Final Judgment - Bryan L. Waugh (https://www.sec.gov/files/litigation/litreleases/2026/judg26489-waugh.pdf)
* Final Judgment - Patrick J. O'Connor (https://www.sec.gov/files/litigation/litreleases/2026/judg26489-oconnor.pdf)
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Original text here: https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26489
SEC Commissioner Peirce Issues Primarily Secondaries: Remarks Before the Small Business Capital Formation Advisory Committee
WASHINGTON, Feb. 25 -- The Securities and Exchange Commission issued the following remarks on Feb. 24, 2025, by Commissioner Hester M. Peirce before the Small Business Capital Formation Advisory Committee:
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Good morning, and thank you all for attending today's meeting. Welcome to the Committee's new members. I appreciate the work of the Committee and the willingness of experts to share their views as panelists. I also appreciate the work of the Office of the Advocate for Small Business Capital Formation in supporting the Committee's work.
I commend the Committee for its continued focus
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WASHINGTON, Feb. 25 -- The Securities and Exchange Commission issued the following remarks on Feb. 24, 2025, by Commissioner Hester M. Peirce before the Small Business Capital Formation Advisory Committee:
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Good morning, and thank you all for attending today's meeting. Welcome to the Committee's new members. I appreciate the work of the Committee and the willingness of experts to share their views as panelists. I also appreciate the work of the Office of the Advocate for Small Business Capital Formation in supporting the Committee's work.
I commend the Committee for its continued focuson finders and look forward to any recommendations the Committee develops. As I mentioned at the last meeting, current activity in this area is shaped by a muddled web of no-action letters that is out of step with practical realities. Last meeting's discussion of status quo finder activity underscored that point. The absence of a finder's framework does not deter bad actors. Good actors may unwittingly act as finders, or, if they are aware of the law's unduly strict limitations, may observe from the sidelines rather than helping to match investors and companies. I appreciated your in-depth discussion of what sensible finders regulation could look like and your focus on how finders can help companies to raise money in amounts too small for brokers to bother with. You covered a lot of other territory as well, from essential disclosures for finder activity to AI agents. I hope today's discussion will be equally interesting and constructive as you devise recommendations.
This afternoon, the committee will discuss an increasingly mainstream area of our capital markets, private secondaries. The growth of these markets, from $162 billion in total volume in 2024 to $240 billion in 2025[1], makes today's conversation timely. I would be interested in hearing what today's panelists think is in store for the remainder of the year. Will the trend continue?
Some of the growth in private secondary markets may stem from an IPO market that, while showing some promising signs of activity, is still not where we would like it to be. Private market investors increasingly are able to turn to secondary markets to exit certain positions and re-allocate capital. While beneficial to investors looking for an exit, the flexibility provided by private market tools such as continuation vehicles diminishes the pressure on companies to IPO.[2] As I expect we will hear from our panelists today, secondary markets are developing to accommodate a wide range of demands that are met by liquidity providers that specialize in a range of transactions. If capital for companies and liquidity for investors and employees are available privately, why take on the burdens associated with being a public company? As this panel discusses the secondary markets, I would appreciate hearing to what degree activity in this space trades off with initial public offerings and what factors investors and issuers consider when deciding which path to pursue.
Though I am happy to see capital formation occur in either the private or public markets, I am aligned with Chairman Atkins' goal of revitalizing IPOs. Our public markets have benefits that simply cannot be recreated privately. The Commission can do more to improve liquidity in our private markets, but public markets facilitate price discovery and retail access in ways that the private secondary markets cannot duplicate perfectly. One long-overdue change that the Commission staff recently made has allowed closed-end funds investing 15% or more of their assets in private funds to sell to non-accredited investors with no minimum investment amount. Has this change been apparent in the marketplace? What else could the Commission do to improve efficiency in and retail access to these markets?
Regardless of what we do to expand retail access to private markets, most retail investor portfolios are likely to be concentrated in the public markets. When companies remain private longer those public investors miss out on the opportunity to fully appreciate the growth of companies that in the past may have occurred after those companies went public. While I am heartened to see markets develop solutions to capital allocation problems, the rapid growth of the private secondary market signals the need for earnest efforts to enhance the palatability of our public markets. Thank you and have a productive meeting.
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[1] Jefferies Global Secondary Market Review (Jan. 2026), pg. 3. Available at: https://go.jefferies.com/l/399542/2026-01-23/5v1tf1/399542/1769183474J7SWeVCW/Jefferies___Global_Secondary_Market_Review___January_2026.pdf?utm_term=6840380660
[2] Goldman Sachs 2026 Global M&A Outlook: Think Big, Build Bigger, pg. 7. Available at: https://www.goldmansachs.com/what-we-do/investment-banking/insights/articles/2026-ma-outlook/goldman-sachs-2026-global-ma-outlook.pdf.
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Original text here: https://www.sec.gov/newsroom/speeches-statements/peirce-022426-primarily-secondaries-remarks-small-business-capital-formation-advisory-committee
SEC Commissioner Issues Uyeda Remarks at the Small Business Capital Formation Advisory Committee Meeting
WASHINGTON, Feb. 25 -- The Securities and Exchange Commission issued the following remarks on Feb. 24, 2026, by Commissioner Mark T. Uyeda at the Small Business Capital Formation Advisory Committee Meeting:
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Good morning. I regret that I cannot be with you. Today's meeting is the first one since the departure of Stacey Bowers, who served as Advocate for Small Business Capital Formation. I would like to acknowledge her contributions to the efforts of this committee.
Before diving into today's agenda, I would like to acknowledge some recent work by our staff. The first item is the 2025 Staff
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WASHINGTON, Feb. 25 -- The Securities and Exchange Commission issued the following remarks on Feb. 24, 2026, by Commissioner Mark T. Uyeda at the Small Business Capital Formation Advisory Committee Meeting:
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Good morning. I regret that I cannot be with you. Today's meeting is the first one since the departure of Stacey Bowers, who served as Advocate for Small Business Capital Formation. I would like to acknowledge her contributions to the efforts of this committee.
Before diving into today's agenda, I would like to acknowledge some recent work by our staff. The first item is the 2025 StaffReport from the Office of the Advocate for Small Business Capital Formation. This report provides a comprehensive snapshot of the state of small business capital formation, including a wealth of information on crowdfunding, Regulation A, and Regulation D offerings.
The second item to highlight is work by the Division of Corporation Finance's Office of Small Business Policy to provide much needed regulatory guidance for small businesses. During the Biden administration, the SEC expended tremendous amounts of staff resources focusing on environmental, social, and political projects that had a weak, if any, nexus to financial markets, rather than focusing on capital formation. Division leadership has refocused on its traditional work on capital formation and investor protection, particularly with respect to smaller businesses.
Recently, SEC staff published frequently asked questions (FAQs) on Form D.[1] Since Regulation D plays a significant role in capital formation for U.S. small businesses, we should continue to improve clarity and predictability for issuers seeking to rely on that regulation. These FAQs consolidate existing guidance and are designed to be a "one-stop shop" to quickly address frequent questions posed to the staff about Form D.
The Division of Corporation Finance has also published new compliance and disclosure interpretations (C&DIs), including ones that address "new" questions about Regulation D. For example, one C&DI clarifies that when taking reasonable steps to verify accredited investor status in Rule 506(c), issuers can use different verification methods for different purchasers in the same offering.[2] Some of the changes update our guidance to reflect the adoption of new rules and their impact on issues such as transactional integration.[3] Other C&DIs formalized longstanding interpretive positions. For example, under Regulation Crowdfunding, the staff described how to switch from one crowdfunding platform to another before making a sale.[4]
Additionally, the staff advised that certain guidance and relief specific to registered companies also applies in the Regulation A context, such as extending the non-public filing and review accommodation to Regulation A issuers.[5]
Lastly, the staff answered certain offering questions that come up periodically in the Regulation A space, such as that a company cannot accept any money or other consideration before qualification.[6]
Our staff stands ready to provide additional guidance and interpretations. If you have questions or believe that additional guidance is needed, I encourage you to reach out to them.
Turning to today's agenda, I am pleased that the Committee will continue its "deep dive" into the topic of finders. A regulatory solution in this area is long overdue. A key consideration is whether the regulatory burdens can be minimized given the limited role such persons play. Sound regulation practices recognize that rules should be appropriately tailored to the specific risk being addressed.
If an intermediary serves in a limited role, such as simply providing introductory services, the full panoply of broker-dealer regulation would not appear to provide additional investor safeguards. Instead, they can deter useful and productive capital formation efforts. Thus, we should consider what regulatory requirements, if any, are so fundamental that they should apply irrespective of the limited transactional roles. These rules are likely to encompass only a small fraction of the broader SEC and FINRA rulebooks applicable to broker-dealers.
Thank you to the participants, presenters and attendees for joining us today. Have a good meeting.
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[1] Frequently Asked Questions and Answers on Form D (Jan. 23, 2026), available at https://www.sec.gov/about/divisions-offices/division-corporation-finance/frequently-asked-questions-answers-form-d.
[2] Compliance and Disclosure Interpretations, Securities Act Rules, Question 260.39.
[3] For example, a number of C&DIs about integration were updated to account for the adoption of Rule 152 in 2021.
[4] Compliance and Disclosure Interpretations, Regulation Crowdfunding, Question 100.03.
[5] Compliance and Disclosure Interpretations, Securities Act Rules, Question 182.24.
[6] Compliance and Disclosure Interpretations, Securities Act Rules, Question 182.31.
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Original text here: https://www.sec.gov/newsroom/speeches-statements/uyeda-remarks-sbcfac-022426
SEC Chairman Atkins Issues Remarks at Small Business Capital Formation Advisory Committee Meeting
WASHINGTON, Feb. 25 -- The Securities and Exchange Commission issued the following remarks on Feb. 24, 2026, by Chairman Paul S. Atkins at the Small Business Capital Formation Advisory Committee meeting:
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Good morning, ladies and gentlemen, and welcome to our first Committee meeting of the year.[1] I want to start by saying how glad I am that we are able to reconvene (if only virtually) after the government shutdown forced us to cancel in the fall. That disruption only reminded me how valuable this forum is, for I have long believed that involving industry practitioners in the regulatory
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WASHINGTON, Feb. 25 -- The Securities and Exchange Commission issued the following remarks on Feb. 24, 2026, by Chairman Paul S. Atkins at the Small Business Capital Formation Advisory Committee meeting:
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Good morning, ladies and gentlemen, and welcome to our first Committee meeting of the year.[1] I want to start by saying how glad I am that we are able to reconvene (if only virtually) after the government shutdown forced us to cancel in the fall. That disruption only reminded me how valuable this forum is, for I have long believed that involving industry practitioners in the regulatoryprocess makes government smarter, more responsive, and less burdensome. Indeed, your contributions bring both rigor and market insight to the SEC's role in facilitating capital formation. So, I am grateful that this Committee can return to its regular cadence and thank you for your flexibility in light of the wintry weather conditions.
***
In just a few moments, the Committee will build on a discussion that it began last summer regarding a regulatory framework for finders. As staff in the Division of Trading and Markets emphasized at our previous meeting, identifying potential investors remains one of the most persistent challenges for small businesses, especially those seeking capital below the range that typically attracts investment from venture capital firms or registered broker-dealers. Regulatory uncertainty only compounds those barriers by deterring individuals from serving as finders--and companies from engaging them. The perspectives shared at our previous meeting underscored the need to address ambiguity in this space and I look forward to hearing the Committee's recommendations on how we might foster greater clarity.
***
Later this afternoon, meanwhile, the Committee will turn to the private secondary market and its increasingly critical role in meeting liquidity needs.
As more firms stay private, two related pressures have intensified: demand for investment opportunities in private companies and the need for liquidity among existing investors, especially early investors and employees for whom compensation includes equity.
Several platforms have emerged to address these pressures. But I understand that our existing regulatory framework has, in some respects, made that work challenging. Many privately issued securities remain restricted from resale under our rules for at least a period of time. Issuers may also impose additional transfer restrictions to maintain visibility into their shareholder base.
Layered atop of these frictions is the further complication that secondary trading of private securities is almost always subject to state blue sky laws. Individual investors can sometimes navigate this patchwork through the so-called "manual exemption," which generally permits secondary transactions of securities listed in designated securities manuals. But complying with state manual exemptions can be costly and time consuming for both investors and issuers.
Of course, this Committee has examined blue sky laws before. Last year, it recommended that the Commission preempt state blue sky laws for off-exchange secondary trading in companies that make available robust, publicly accessible, and timely public disclosures, such as those required by Regulation A Tier 2.
That recommendation reflects a sound instinct as many of the limitations on secondary trading in private markets are designed to protect investors. Private companies generally do not provide ongoing disclosures, which means that investors are not as easily able to make a reasoned investment decision. One way to address this, as the Committee's recommendation recognized, is to consider allowing secondary trading in companies that provide some sort of ongoing disclosure. Of course, that approach would not necessarily resolve the separate issue of company-imposed transfer restrictions beyond what current law requires. So, more structurally, another way to overcome these concerns is to encourage larger, later-stage private companies--the kind of companies that historically would have undergone an initial public offering earlier in their life cycle--to again go public sooner.
Which brings me to a broader point--and to my priority to reinvigorate an IPO pipeline that has diminished by roughly 40 percent in recent decades. As I recently testified before Congress, this trajectory tells a cautionary tale that the SEC is working to rectify, first, by re-anchoring disclosures in materiality so that investment decisions can turn on economic signals rather than on regulatory noise; second, by de-politicizing shareholder meetings and restoring their focus to significant corporate matters; and third, by allowing public companies to have litigation alternatives so that we shield innovators from the frivolous and investors from the fraudulent.
With that context, I am grateful that we will be hearing from a distinguished group of guest speakers to continue our discussion on finders and to begin exploring the private secondary market. This Committee's insights, rooted in the real-world experience of its members, will be essential in enhancing capital formation for America's small businesses. So thank you once again for your continued service, and for the thoughtful guidance that you provide. I look forward to a productive and engaging meeting ahead. Thank you.
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[1] The Chairman's views expressed in these remarks do not necessarily reflect those of the SEC as an institution or of the other Commissioners
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Original text here: https://www.sec.gov/newsroom/speeches-statements/atkins-sbcfac-022426-remarks-small-business-capital-formation-advisory-committee-meeting
NRC Announces Opportunity to Request Hearing for Crane Clean Energy Center Restart License Amendments
WASHINGTON, Feb. 25 -- The Nuclear Regulatory Commission issued the following news release:
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NRC Announces Opportunity to Request Hearing for Crane Clean Energy Center Restart License Amendments
The Nuclear Regulatory Commission has announced in the Federal Register the opportunity to request an adjudicatory hearing on Constellation Energy Generation's effort to return the Crane Clean Energy Center to operational status.
The opportunity covers license amendment requests from Constellation, filed between July 2025 and October 2025, that would restore aspects of the CCEC license to those
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WASHINGTON, Feb. 25 -- The Nuclear Regulatory Commission issued the following news release:
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NRC Announces Opportunity to Request Hearing for Crane Clean Energy Center Restart License Amendments
The Nuclear Regulatory Commission has announced in the Federal Register the opportunity to request an adjudicatory hearing on Constellation Energy Generation's effort to return the Crane Clean Energy Center to operational status.
The opportunity covers license amendment requests from Constellation, filed between July 2025 and October 2025, that would restore aspects of the CCEC license to thoserequired for an operating reactor. The filing deadline for this hearing opportunity is April 27. The notice of opportunity describes the relevant process for seeking access to protected information. Additional information on the hearing process is available on the NRC website.
The NRC staff has determined that the requests contain sufficient information for the agency to formally docket them and conduct the required technical reviews. Docketing the requests is not an indication of whether the NRC will approve the license amendments.
The CCEC reactor (former Three Mile Island Unit 1) permanently ceased operations in September 2019. In late 2024, Constellation, the reactor license holder, notified the NRC of its interest in returning the plant to an operational status. The NRC created the CCEC Restart Panel to guide staff efforts to review and inspect the reactor, and determine if it can be safely returned to operation. Additional information on a potential Crane Clean Energy Center restart can be found on the NRC's website.
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Original text here: https://www.nrc.gov/sites/default/files/cdn/doc-collection-news/2026/26-021.pdf
FDIC Quarterly Banking Profile Fourth Quarter 2025
WASHINGTON, Feb. 25 -- The Federal Deposit Insurance Corporation issued the following statement on Feb. 24, 2026:
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FDIC Quarterly Banking Profile Fourth Quarter 2025
Today, the FDIC is releasing the full-year and fourth quarter 2025 performance results for FDIC-insured institutions.
The banking industry finished the year with strong earnings, resulting in a return on assets (ROA) ratio of 1.20 percent for the full year. Loan growth accelerated in 2025, as did domestic deposit growth. Asset quality metrics remained favorable overall despite continued weakness in certain portfolios, which
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WASHINGTON, Feb. 25 -- The Federal Deposit Insurance Corporation issued the following statement on Feb. 24, 2026:
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FDIC Quarterly Banking Profile Fourth Quarter 2025
Today, the FDIC is releasing the full-year and fourth quarter 2025 performance results for FDIC-insured institutions.
The banking industry finished the year with strong earnings, resulting in a return on assets (ROA) ratio of 1.20 percent for the full year. Loan growth accelerated in 2025, as did domestic deposit growth. Asset quality metrics remained favorable overall despite continued weakness in certain portfolios, whichthe FDIC continues to monitor closely. Unrealized losses declined but remained elevated.
The banking industry continued to have strong capital and liquidity levels, which support lending and protect against potential losses.
Chart 1
As shown in this chart, full-year 2025 banking industry net income increased from 2024. The industry's ROA increased 8 basis points to 1.20 percent as net income of $295.6 billion was up 10.2 percent from 2024. The increase was driven by higher net interest income and higher noninterest income, which offset higher noninterest expense.
Community banks reported a full-year pre-tax ROA of 1.32 percent in 2025, up 18 basis points from 2024. Community banks reported full-year net income of $29.9 billion, up 22.5 percent from 2024. The increase in community bank net income was primarily attributable to higher net interest income.
Chart 2
Chart 2 shows that the banking industry reported quarterly net income of $77.7 billion in the fourth quarter, a decrease of $1.6 billion, or 2.0 percent, from the prior quarter. Larger noninterest expense and non-recurring items at several larger banks were the primary contributors to the decline. The banking industry reported an ROA of 1.24 percent in fourth quarter 2025, down 3 basis points from the prior quarter but up 13 basis points from the year-ago quarter.
Community bank quarterly net income decreased 3.8 percent from the prior quarter to $7.9 billion, driven by higher noninterest expense and higher securities losses. The quarterly pretax ROA at community banks decreased 11 basis points from the prior quarter but increased 28 basis points from the year-ago quarter to 1.35 percent.
Chart 3
Chart 3 shows the breakdown of the changes in the industry's net income quarter-over-quarter. The primary driver of the industry's $1.6 billion decrease in net income was higher noninterest expense, which increased $5.1 billion, or 3.4 percent. The increase in noninterest expense was broad-based and offset strong net interest income growth during the quarter. One-time items at large banks also negatively affected net income.
Chart 4
Chart 4 shows the average net interest margin (NIM) for the industry and the five asset-size groups on which the Quarterly Banking Profile reports. The industry's NIM increased 5 basis points from the prior quarter to 3.39 percent, the highest level since 2019. NIM increased across most asset-size cohorts.
The community bank NIM increased to 3.77 percent, up 4 basis points from the prior quarter to the highest level since 2018.
Chart 5
Chart 5 shows the quarter-over-quarter changes in the industry's average yield on earning assets and average cost of funds. During the quarter, the cost of funds decreased more than the yield on earning assets. This resulted in a 5 basis point increase in the industry's NIM in fourth quarter 2025.
The 4 basis point increase in community bank NIM in the fourth quarter was driven by a 9 basis point decrease in the cost of funds that outpaced a 5 basis point decrease in the yield on earning assets.
Chart 6
Chart 6 shows that the industry's provision expense was $20.9 billion in the fourth quarter, roughly in line with the prior quarter. Provision expenses equaled total net charge-offs during the quarter.
Chart 7
Chart 7 shows that longer-term loans and securities as a share of the banking industry's total assets fell for the 12th consecutive quarter to 33.7 percent after peaking at 39.7 percent in fourth quarter 2022. The industry's longer-term assets as a share of total assets were the lowest since 2020.
At community banks, longer-term loans and securities made up 42.9 percent of total assets in fourth quarter 2025, down from 43.0 percent in the prior quarter.
Chart 8
Chart 8 shows the level of unrealized losses on held-to-maturity and available-for-sale securities portfolios. Total unrealized losses decreased $31.0 billion (9.2 percent) from the prior quarter to $306.1 billion, the lowest level of unrealized losses for the industry since first quarter 2022. The 30-year mortgage rate declined during the quarter, increasing the value of mortgage-backed securities reported by banks and reducing unrealized losses.
Chart 9
Chart 9 shows the change in loan balances on a quarterly and annual basis. The industry's total loans increased $267.8 billion, or 2.0 percent, in the fourth quarter. Loans to nondepository financial institutions and credit card loans had the largest dollar increase among reported categories. Loans to purchase or carry securities, including margin loans, nonfarm nonresidential commercial real estate (CRE) loans, and commercial and industrial (C&I) loans also contributed to the industry's quarterly loan growth. The industry's annual rate of loan growth in the fourth quarter accelerated to 5.9 percent, the fastest annual growth rate in 11 quarters.
Total loans at community banks increased 1.4 percent from the prior quarter and 5.4 percent from the prior year, led by increases in nonfarm nonresidential CRE and C&I portfolios.
Chart 10
Chart 10 shows that asset quality metrics for the industry remained generally favorable, though weakness in certain portfolios persisted. The overall past-due and nonaccrual (PDNA) rate increased from the prior quarter to 1.56 percent, below the pre-pandemic average rate of 1.94 percent./1 2 The PDNA rates for non-owner-occupied CRE, multifamily CRE, auto, and credit card portfolios remained well above their pre-pandemic averages.
The industry's quarterly net charge-off rate of 0.63 percent increased 1 basis point from last quarter but was 8 basis points lower than the year-ago quarter. The industry's net charge-off rate was 15 basis points higher than the pre-pandemic average of 0.48 percent. Increases in credit cards and auto net charge-offs outweighed declines in other categories. Net charge-off rates for most portfolios were above their pre-pandemic averages.
Chart 11
Looking deeper into the CRE portfolio, the elevated PDNA rates of non-owner-occupied property loans persisted in the fourth quarter, driven by the portfolios of larger institutions. The non-owner-occupied CRE PDNA rate for banks with assets greater than $250 billion declined for the fifth consecutive quarter to 4.06 percent, below the recent peak of 4.99 percent in third quarter 2024 but well above the pre-pandemic average rate of 0.58 percent. However, these large banks have lower concentrations of such loans in relation to total assets and capital than smaller banks, mitigating the overall risk. Overall, the industry's volume of PDNA non-owner-occupied CRE loans increased $269 million, or 1.2 percent, from the prior quarter.
Chart 12
Chart 12 shows that the funded allowance for credit losses decreased slightly while noncurrent loan balances increased, resulting in a decrease in the reserve coverage ratio to 171.2 percent. The pending sale of a large loan portfolio between institutions accounted for the decrease in funded allowance in the fourth quarter, which will reverse once the transaction is complete. The reserve coverage ratio was still higher than the pre-pandemic average.
The reserve coverage ratio at community banks was 154.3 percent.
Chart 13
Chart 13 shows that domestic deposits increased for the sixth consecutive quarter, rising $318.3 billion, or 1.8 percent, during the fourth quarter. Estimated uninsured domestic deposits, up $214.7 billion, drove the increase from the prior quarter. The industry's nondeposit liabilities decreased $201.6 billion during the quarter, driven by a decline in fed funds purchased and repurchase agreements.
Chart 14
Chart 14 shows the number of banks on the FDIC's "Problem Bank List." Banks on this list have a CAMELS composite rating of "4" or "5." The number of banks on the list increased by a net of three in the fourth quarter to 60 banks. The number of problem banks was 1.4 percent of total banks, which is in the normal range for non-crisis periods of 1 to 2 percent of all banks. One bank opened and no banks failed during the fourth quarter.
Chart 15
This chart shows that the Deposit Insurance Fund (DIF) balance was $153.9 billion on December 31, 2025, up $3.7 billion from the third quarter.3 Assessment revenue continued to be the primary driver of the increase, adding $3.0 billion to the DIF balance, followed by $1.2 billion in interest earned on investment securities. Negative provisions for insurance losses, unrealized gains on securities, and all other income also contributed a combined $149 million to the fund, partially offset by operating expenses of $618 million.
Insured deposits increased 1.0 percent during the fourth quarter and 1.3 percent from the year-ago quarter. The reserve ratio increased 2 basis points in the fourth quarter to 1.42 percent and was 14 basis points higher than a year ago.
In conclusion, the banking industry had a strong quarter and a strong 2025. The industry saw robust loan growth, wider NIMs, and strong earnings growth during the year. Strong capital and liquidity levels continue to support lending and protect against potential losses. However, the industry still faces weakness in certain loan portfolios and elevated unrealized losses. These issues will remain matters of ongoing supervisory attention by the FDIC.
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1/ In this statement, the terms "past-due and nonaccrual" or "PDNA" are used to describe loans that are 30 or more days past-due or on nonaccrual status.
2/ The period used to calculate pre-pandemic averages is first quarter 2015 through fourth quarter 2019.
3/ As in prior quarters, quarterly special assessment payments related to the March 2023 failures of Silicon Valley Bank and Signature Bank do not affect quarterly changes in the DIF balance.
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Original text here: https://www.fdic.gov/news/speeches/2026/fdic-quarterly-banking-profile-fourth-quarter-2025
