Inside the Bank: What Deposits Fund, and Where the Income Goes
Summary
-insured banks held $26.5 trillion at June 30, 2026, and deposits funded 78.3 percent of it ( Quarterly Banking Profile). This Sky survey follows the money through the balance sheet: 51.8 cents of each asset dollar sat in loans, net of loss reserves, and 22.0 cents in securities. In April–June 2026, banks earned an annualized 5.35 percent on their earning assets and paid 2.03 percent to fund them; of each dollar they took in, 22.7 cents went to depositors as interest and 21.5 cents was net income.
What the deposits fund
At June 30, 2026, 51.8 cents of each asset dollar⧉ was in loans and leases, net of loss reserves. Deposits, other liabilities, and the owners' equity together fund everything a bank holds. Another 22.0 cents was in securities: more than half mortgage-backed, 28.6 percent U.S. Treasuries. Ten cents was cash and balances due from depository institutions.
View data as table
| Loans and leases, net of loss reserves | 51.8¢ | $13.71 trillion |
|---|---|---|
| Securities (outside trading accounts) | 22.0¢ | $5.82 trillion |
| Cash and balances due from depository institutions | 10.0¢ | $2.65 trillion |
| Trading account assets | 5.3¢ | $1.41 trillion |
| Fed funds sold and reverse repos | 3.1¢ | $0.83 trillion |
| Goodwill, premises, and all other assets | 7.7¢ | $2.05 trillion |
The spread
In the second quarter of 2026, banks earned an annualized 5.35 percent on their earning assets⧉ — loans and other investments that pay interest or dividends — and paid 2.03 percent to fund them. That 3.32-point gap is the net interest margin; in dollars, net interest income was $197.4 billion in three months. Loans and leases produced 70.9 percent⧉ of the $318.4 billion in interest.
Whom the income pays
Add $96.1 billion of fees, trading, and other income, plus $5.5 billion of securities gains⧉, mostly one-time, and, net of a $66 million extraordinary loss, banks took in $420.0 billion. Depositors received 22.7 cents of each dollar as interest. Salaries and benefits⧉ for 2.03 million full-time-equivalent employees took 18.5 cents; net income was 21.5 cents, $90.2 billion.
View data as table
| Interest paid to depositors | 22.7¢ | $95.5 billion |
|---|---|---|
| Interest on borrowed money and other debt | 6.1¢ | $25.5 billion |
| Salaries and employee benefits | 18.5¢ | $77.5 billion |
| Premises, data processing, and other operating costs | 20.7¢ | $86.8 billion |
| Provisions for credit losses | 4.6¢ | $19.3 billion |
| Income taxes | 6.0¢ | $25.2 billion |
| Net income | 21.5¢ | $90.2 billion |
Who absorbs a loss
Expected credit losses are charged against income: provisions of $19.3 billion⧉ in the quarter, about equal to net charge-offs, the loans written off less recoveries. Banks also hold equity, 9.9 cents of each asset dollar; the says the industry's capital and liquidity protect against potential losses⧉. Securities can lose value too: at June 30, banks' debt securities were worth $326.7 billion less than their book value.
The estimates $10.9 trillion of deposits are insured⧉, up to its $250,000 standard maximum⧉, backed by its $161.1 billion Deposit Insurance Fund — 1.48 percent of insured deposits. The fund itself, the says, is backed by the full faith and credit of the United States government⧉.
- Deposits fund most of a bank. They paid for 78.3 cents of each dollar -insured institutions held at June 30, 2026; 51.8 cents sat in loans, net of loss reserves, and 22.0 in securities.
- The spread, then the split. Banks earned 5.35 percent on earning assets and paid 2.03 percent to fund them (second quarter of 2026, annualized). Of each dollar they took in, depositors got 22.7 cents; net income was 21.5.
- Losses have backstops. Banks charged $19.3 billion of expected credit losses against income in the quarter and held equity of 9.9 cents per asset dollar; behind an estimated $10.9 trillion of insured deposits stands the 's $161.1 billion fund, itself backed by the full faith and credit of the U.S. government.
Where this sits: This is one slice of Sky: Industries, a survey of how the money moves, industry by industry. Banking's first slice is the balance sheet and its spread; the housing slice follows a mortgage after closing. Next comes technology and software, and what its margins do to how the companies are built. Balance-sheet and income figures cover the 4,238 -insured commercial banks and savings institutions; the insured-deposit and fund figures cover 4,247 institutions, including insured branches of foreign banks. Income is for April through June 2026, rates are annualized, and cents are rounded.
Sources(6) ▾
- Federal Deposit Insurance Corporation, Division of Insurance and Research, Quarterly Banking Profile, Second Quarter 2026 (2026-08-25) — The 's quarterly report on all 4,238 -insured commercial banks and savings institutions, released August 25, 2026. The copy read here is the 42-page PDF as revised September 16, 2026, read in full via pdftotext -layout. Table II-A (p. 7) gives the June 30, 2026 balance sheet (total assets $26,462,210 million; deposits $20,722,283 million; total equity capital $2,627,535 million) and second-quarter 2026 income (interest income $318,438 million; interest expense $121,047 million; net income $90,221 million). Table III-A (p. 8) gives the quarter's annualized yield on earning assets (5.35 percent), cost of funding earning assets (2.03 percent), and net interest margin (3.32 percent). The narrative (pp. 1–4) supplies provision expense, unrealized losses on securities, and the source of the quarter's securities gains; Table I-C (p. 28) gives the Deposit Insurance Fund balance, its reserve ratio, and estimated insured deposits; unlike Tables I-A through III-A, which exclude insured branches of foreign banks, Table I-C counts 4,247 reporting institutions and includes those branches. The Definitions (pp. 33–39) define every ratio used and what the counts as other borrowed funds. fdic.gov · original document
- Federal Deposit Insurance Corporation, Quarterly Banking Profile Time Series Spreadsheets, Second Quarter 2026 (sheets "Balance Sheet" and "Quarterly Income") (2026-08-24) — The 's aggregate workbook for all -insured institutions, 1984Q1–2026Q2, in millions of dollars (workbook last modified August 24, 2026), read with openpyxl in the 2026Q2 column. The 'Balance Sheet' sheet itemizes the June 30, 2026 asset side line by line — net loans and leases, securities (with U.S. Treasury and mortgage-backed lines), cash and due from depository institutions, federal funds sold and reverse repurchase agreements, trading account assets, premises, other real estate owned, intangibles, and other assets — which sum exactly to total assets of $26,462,210 million. The 'Quarterly Income' sheet itemizes second-quarter 2026 interest income by asset (loans, leases, securities, balances) and interest expense by liability (domestic and foreign office deposits, federal funds purchased, other borrowed money, subordinated notes), plus salaries and employee benefits. Totals match Table II-A of the Quarterly Banking Profile PDF. fdic.gov · original document
- Federal Deposit Insurance Corporation, Quarterly Banking Profile: Notes to Users, Second Quarter 2026 (2026-08-21) — The 's methodology and definitions for the Q2 2026 Quarterly Banking Profile (7-page PDF, created August 21, 2026), read via pdftotext -layout. Used only for its statement that the standard maximum deposit insurance amount is currently $250,000 (definition of estimated uninsured deposits, p. 5). fdic.gov · original document
- Federal Deposit Insurance Corporation, Quarterly Banking Profile - 2Q 2026 (2026-09-01) — The 's landing page for the Q2 2026 Quarterly Banking Profile (last updated September 1, 2026). Its summary paragraph states that the banking industry 'continued to maintain strong capital and liquidity levels, which support lending and protect against potential losses' — used, attributed to the , for what bank capital is for. fdic.gov · original document
- Federal Deposit Insurance Corporation, Understanding Deposit Insurance (2024-04-01) — The 's explainer page on deposit insurance (page footer 'Last Updated: April 1, 2024'), read as tag-stripped text. Under 'How Deposit Insurance Works' it says the Deposit Insurance Fund is backed by the full faith and credit of the United States government. Used only for that statement, attributed to the , so the fund's 1.48 percent reserve ratio is not read as the whole of what stands behind insured deposits. fdic.gov · original document
- U.S. Bureau of Economic Analysis, GDP by Industry: Value Added by Industry (Tables TVA105, TVA110), annual data 1997–2025 (2026-09-30) — 's value-added-by-industry workbook, 'Data published September 30, 2026' (the 2026 annual update), read with openpyxl. TVA105-A gives 2025 nominal value added: $30,861,292 million (line 1) and 'Federal Reserve banks, credit intermediation, and related activities' $1,237,877 million (line 56); TVA110-A gives that industry at 4.0 percent of in 2025. As its name says, the industry spans the Federal Reserve banks as well as credit intermediation and related activities, so it is broader than the -insured institutions the rest of the piece measures; it is used only for scale. apps.bea.gov · original document
Comments
Always open. Logged-in readers can annotate paragraphs in place.
-insured banks and savings institutions held $26.5 trillion in assets at June 30, 2026⧉, and deposits funded $20.7 trillion of it — 78.3 cents of every dollar. The industry the Bureau of Economic Analysis lists as Federal Reserve banks, credit intermediation, and related activities⧉ added $1.24 trillion of value in 2025, 4.0 percent of — a category broader than the insured banks measured below. This slice follows the money through a bank's balance sheet: what it holds, what it earns, and whom its income pays.