Bank earnings this season are expected to give investors an important look at the health of the U.S. economy, especially while government data is unavailable due to the ongoing shutdown. As major banks begin releasing their quarterly results, their performance will offer clues about consumer strength, business activity, lending trends, and the broader financial outlook.
Leading institutions such as JPMorgan Chase, Bank of America, Wells Fargo, Citigroup, and Goldman Sachs will report their results next week. As of the end of September, analysts say these banks were in strong financial condition and likely to improve further through the rest of the year. Borrowers—from credit card users to large corporations—showed minimal signs of strain, and loan demand was gradually rising. Strong financial markets also supported earnings in banks’ Wall Street divisions. The Trump administration’s loosening of financial regulations added another layer of support.
According to Piper Sandler analyst Scott Siefers, the operating environment for banks is as favorable as it has been in recent years. However, without official economic data from agencies affected by the shutdown, analysts warn that sudden economic shifts could be harder to detect.
Why Bank Earnings Matter
Bank earnings are closely tied to economic performance. When lending activity is strong, it helps fuel consumer spending, business expansion, and investment. Solid earnings can also support financial market stability and employment within the banking sector.
So far, investors seem confident. The KBW Nasdaq Bank Index has performed slightly better than the S&P 500, reflecting expectations of strong results. UBS analyst Erika Najarian noted that banks face “great expectations” this season, especially after the recent stock market rally.
Will Bank CEOs Maintain Their Optimism?
Bank leaders have expressed confidence in recent weeks. They point to steady spending among high-income consumers, rising corporate optimism, and the economic boost from large-scale data center construction. Goldman Sachs CEO David Solomon said he expects economic momentum to accelerate heading into 2026, though he acknowledged that the job market has softened slightly.
Loan portfolios remain stable, and losses are low. According to the Federal Deposit Insurance Corporation, banks wrote off 0.60% of their loans in the second quarter—slightly above pre-pandemic levels but far below the rates seen in past downturns like 2010.
Bank of America CFO Alastair Borthwick recently emphasized the strength of both consumer and corporate credit. Other bank executives shared a similar outlook, which has led analysts to believe earnings may again exceed expectations.
Late credit card payments have been improving after a period of stress driven by inflation and higher interest rates. Although older office buildings facing remote-work pressure remain a challenge, analysts note that these issues are now well understood and priced into expectations.
What Could Change the Outlook?
A prolonged government shutdown could shift sentiment. Analysts warn that furloughed government workers may reduce spending, and disruptions at agencies such as the Small Business Administration and the Department of Housing and Urban Development could slow loan approvals.
Market volatility is also a risk. Wall Street banks have recently benefited from stronger IPO activity and increased corporate dealmaking. EY reported that IPOs had their best quarter since late 2021, and major mergers are rising as well. Continued shutdown-related uncertainty, however, could affect these trends.
Goldman Sachs’ Solomon believes dealmaking will pick up heading into 2026, but he also cautioned that the stock market could pull back after its strong gains.
Are Major Bank Mergers Returning?
Bank consolidation is accelerating again. Last quarter saw 52 bank mergers—the highest number in four years—according to S&P Global Market Intelligence. While mergers have been a long-term trend driven by cost-cutting and technology investment, activity slowed during the Biden administration due to increased regulatory scrutiny.
Now, larger deals are reappearing. PNC Financial recently announced plans to acquire regional lender FirstBank in Colorado, and Fifth Third Bank revealed it is purchasing Comerica Bank in Dallas. These moves raise questions about whether more large regional banks will respond with acquisitions of their own.
For investors, one concern is that regional banks might overpay for acquisitions. However, Siefers noted that Fifth Third’s stock performance after its announcement suggests that shareholders are comfortable as long as deals are financially sound.
