The Office of the Comptroller of the Currency (OCC) said refinancing concerns in commercial real estate and private credit remain on bank supervisors’ radar, even as earnings across the federal banking system rose in 2025.
The OCC’s Spring 2026 review, released May 7, linked the earnings increase to loan growth and lower funding costs. Releases covering the first quarter of 2026 generally suggested that the earnings momentum had carried forward, the regulator said.
Credit signals varied across portfolios. Some consumer loan portfolios had a modest increase in past-due loans, but the OCC described supervised banks’ exposure to borrowers with weaker credit profiles as manageable. It also identified refinancing risk in certain commercial real estate and private credit segments as an area for continued attention.
The agency described banks’ balance sheets as strong, with capital ratios and liquidity high by historical standards. That assessment accompanied the review’s warnings about threats beyond lending: the OCC cited increasingly capable cybercriminal groups, state-sponsored actors, fraud and scams as concerns for the financial sector.
The report discussed AI tools entering the market that may assist with cybersecurity. The OCC said assessing the potential benefits and risks of these emerging tools can inform cyber-risk management; it did not say that banks already use them.
Geopolitical tensions can also complicate banks’ compliance work, the OCC said. The regulator pointed to greater exposure to sanctions and a heightened possibility of violations involving the Bank Secrecy Act (BSA) and anti-money laundering (AML) requirements.
The OCC said its broader supervisory approach aims to match oversight and regulation to institutions’ risks and complexity, while reducing burdens so regulated banks can support economic growth.
