By Pete Schroeder

WASHINGTON, May 27 (Reuters) – U.S. banks reported a 3.6% ‌increase in their profits in ‌the first quarter of 2026, rising to $80.5 billion ​as domestic deposits grew again and banks set aside slightly more against potential losses, the Federal Deposit Insurance ‌Corporation reported Wednesday.

The ⁠FDIC reported that bank deposits had risen for the seventh ⁠consecutive quarter, and while bank provision expenses were up 2.3% in ​the first ​quarter, they were ​lower than a ‌year prior.

The FDIC said asset quality metrics remained favorable, with the level of past due loans falling slightly. However, it noted that past due ‌levels for residential loans ​and commercial real estate ​rose slightly, ​and levels remained elevated ‌for loans for credit ​cards, autos, ​and multifamily commercial real estate.

FDIC Chairman Travis Hill said in a ​statement that ‌bank capital and liquidity levels ​remained strong.

(Reporting by Pete Schroeder; Editing ​by Chizu Nomiyama)