Unrealized losses on US banks’ balance sheets rose in the first quarter of 2026, marking the first quarter-over-quarter increase since the fourth quarter of 2024.
According to the latter report Among institutions under the Federal Deposit Insurance Corporation (FDIC), US banks recorded an increase in unrealized losses of just over six percent in the first quarter.
“Total unrealized losses increased $19.0 billion, or 6.2 percent, from the prior quarter to $325.1 billion. 30-year mortgage rates remained relatively flat through the first two months of the quarter but rose in the month of March, reducing the value of banks’ reported mortgage-backed securities and increasing unrealized losses.”
As a result, the FDIC says that increased unrealized losses and weakness in certain loan portfolios “remain matters of continued regulatory focus.”
Amid the increase in the level of unrealized losses, 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 net by six to 54 banks in the first quarter. The number of problem banks amounted to 1.3 percent of the total number of banks, which is within the normal range of 1 to 2 percent for non-crisis periods. Three banks opened and one bank failed during the first quarter.”
The Problem Bank List is a list of banks in financial difficulty, based on a rating system that assesses capital adequacy, asset quality, management, earnings, liquidity and sensitivity to market risk, a framework called CAMELS.
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