How a Bank Actually Makes Money

Episode 03 · 11:24 · published 8 December 2026 · watch

Read the period first. Income figures in Call Reports are cumulative from 1 January. Every revenue and expense figure below covers six months — not three, and not twelve. Treating a 30 June figure as a quarter halves the bank; treating it as a year doubles it.

The figures used

What — 30 June 2026, all 4,313 insured institutions	Value
Deposits held in domestic offices	$19.12 tn
Gross loans and leases	$14.08 tn
Total assets	$26.75 tn
Interest income, six months	$627.3 bn
Interest expense, six months	$237.9 bn
Net interest income	$389.4 bn
Non-interest income	$190.7 bn
Non-interest expense	$326.3 bn
Provisions for credit losses	$40.7 bn
Net income	$171.9 bn
Interest paid on domestic deposits	$170.7 bn
Interest and fees on domestic loans	$424.7 bn
Rate paid on deposits, annualised	1.79 %
Rate earned on loans, annualised	6.03 %
Spread	4.24 pts
Spread at 31 Dec 2021, for comparison	3.79 pts
Institutions filing, 31 Mar 2019	5,428
Institutions filing, 30 Jun 2026	4,313

The two rates are computed, not reported: a half-year of interest divided by a single-day balance, annualised. Domestic deposit expense is set against domestic deposits and loan income against gross loans, so numerator and denominator cover the same thing. With total deposits — including foreign branches — the deposit rate would come out too low.

Sources

Federal Deposit Insurance Corporation — Call Reports Sums over all insured institutions, 31 March 2019 to 30 June 2026, 30 quarterly observations. api.fdic.gov/banks/financials. Retrieved 8 November 2026.

Data files

As used in the episode — the charts are generated from exactly this.

fdic-industry-quarterly.json 30 quarters, 2019–2026

What these numbers do not say

Averages across 4,313 institutions. A small community lender and a global investment bank are both in here, and they do not resemble each other at all.
The rates are approximations. Dividing a period flow by a point-in-time balance is the standard way to do this from these filings, and it is still an approximation. The video says "about", not "exactly".
Profit is not margin. 29.6 % of revenue is a good business, but banks carry capital against risk, and the return on that capital is a different and lower number.
No bank is shown choosing anything. The spread widened as rates rose. That follows from contract structure — floating-rate loans reprice on a schedule, checking accounts have no maturity date — and needs nobody to decide anything. These filings cannot show intent.
The 1,115 institutions that disappeared did not leave cleanly. Their loans and deposits sit inside the survivors, so the 2019 and 2026 figures are not quite measuring the same population.

Corrections

None yet. Errors reported in the comments are corrected here and noted with the date.

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