U.S. Community Bank Deposits Stabilize as Capital Buffers Grow
Regional and community banks saw total assets climb to $3.7 trillion in the first quarter of 2026 amid a broad recovery in deposit flows.
Coverage: 10 of 125 companies in this theme (FDIC57038, FDIC18714, FDIC6653, FDIC59052, FDIC57833, FDIC623, FDIC16835, FDIC35095, FDIC24998, FDIC33653) — a sample, not the full set.
U.S. regional and community banks expanded their balance sheets to $3,701.5B in the first quarter of 2026, a 1.1% increase from the previous quarter. This growth was supported by a return to positive deposit momentum, with total deposits rising 1.3% QoQ to $2,993.5B.
Deposit recovery varied sharply across the cohort. Nicolet National Bank saw deposits surge 65.6% QoQ to $13.1B, while The Park National Bank and Nbh Bank posted quarterly deposit gains of 33.0% and 26.2%, respectively [4, 5]. Other institutions faced outflows, including Deutsche Bank Trust Company Americas, which reported a 10.2% quarterly decline in deposits.
Capital positions strengthened across the group. Total equity rose 2.2% QoQ to $418.3B, pushing the equity-to-assets ratio up 12.4 basis points to 11.30%.
Individual capital shifts were pronounced. FirstBank reported a significant jump in its equity-to-assets ratio, which rose 849.3 basis points QoQ to 15.52%. Conversely, Prosperity Bank saw its equity-to-assets ratio slip 77.5 basis points to 18.39%.
Leverage ratios remained a point of divergence. The cohort's Tier 1 leverage ratio edged up 7.7 basis points to 9.96%. Nicolet National Bank improved its Tier 1 leverage by 298.0 basis points to 12.47%, while FirstBank saw its ratio drop 265.3 basis points to 6.49%.
Asset quality showed slight signs of pressure. The noncurrent loans ratio for the cohort rose 5.6 basis points QoQ to 1.14%.
Despite the uptick in noncurrent loans, the overall increase in equity and the stabilization of the deposit base suggest a broadening of the safety margin for the $100B-and-under asset class.