WASHINGTON, Nov 24 (Reuters) - The U.S. banking industry

saw its profits jump 13.5% to $79.3 billion in the third quarter

of 2025, the Federal Deposit Insurance Corporation reported

Monday.

The FDIC said the stronger profits were primarily due to

growth in non-interest income expense, as well as banks booking

smaller loss provision expenses. In the second quarter, the

banking sector reported higher provision expenses, primarily

thanks to the completed merger of Capital One and Discover

Financial.

While the banking sector remained healthy overall, the

regulator flagged the industry is still grappling with

historically high past-due rates on some types of loans, notably

commercial real estate, auto and credit card loans.

Banks with over $250 billion in assets reported a past-due

rate of 4.18% for non-owner occupied commercial real estate

loans. That figure is down from a 4.99% peak of a year prior,

but still well above the pre-pandemic average of 0.59%. The

overall past-due rate held steady at 1.49% of total loans, which

is below the pre-pandemic average of 1.94%.

"The banking industry continued to have strong capital and

liquidity levels, which support lending and protect against

potential losses," said acting FDIC Chairman Travis Hill in

prepared remarks.

Banks reported a fifth straight quarter of higher deposits,

boosted by $88.6 billion more in additional uninsured deposits,

a 1.1% jump from the prior quarter. The number of "problem

banks," which are banks that have low supervisory ratings,

dropped by 2 to 57 banks, and the total number of banks in the

country fell by 42 due to sales or mergers.

(Reporting by Pete Schroeder; Editing by Chizu Nomiyama )