Net Interest Margin - Historical Chart
Net Interest Margin for All U.S. Banks. Gray shaded areas indicate U.S. recessions.
Source: Federal Reserve Bank of St. Louis (FRED), Series USNIM. Shaded areas = NBER recession dates. Updated 2026-03-10.
What the Q3 2020 Data Shows
At 2.80%, the net interest margin in Q3 2020 is below the 10-year average of 3.22% by 0.42pp. The metric has fallen in each of the last 4 quarters.
Net interest margin (FRED series USNIM) is the banking industry's core profitability metric. It measures the spread between what banks earn on loans and securities versus what they pay on deposits and borrowed funds, divided by average earning assets.
NIM was compressed during the zero-rate era (2009-2015 and 2020-2022) because banks could not lower deposit rates below zero while loan rates fell. The 2022-2023 rate hiking cycle initially boosted NIM as loan rates rose faster than deposit costs, but deposit competition and rate sensitivity have been squeezing margins more recently.
Quarterly data from FDIC call reports covering all insured depository institutions.
What This Metric Measures
This page tracks the difference between the interest income generated by banks and the amount of interest paid out to depositors and creditors, expressed as a percentage of average earning assets. The data comes from the Federal Reserve Bank of St. Louis FRED database, series USNIM, updated quarterly.
Historical Context
The all-time peak was 4.91% in Q1 1994 — roughly 1.8x the current level. The all-time trough was 2.80% in Q3 2020. During COVID-19 in 2020, the reading hit 3.06% (Q1 2020). Year-over-year, the metric has moved -16.2%.
Why It Matters
A healthy NIM means banks are making money on every loan, which gives them the financial incentive and capital capacity to originate more. When NIM shrinks below 3%, banks look for ways to cut costs: closing branches, reducing lending staff, and focusing on only the most profitable loan types. Small business loans are expensive to originate (lots of manual underwriting), so they are often the first to get cut when margins tighten.
What This Means for Business Owners
Understanding where this metric stands relative to historical norms helps business owners make better borrowing decisions. Metrics far from their 10-year average often signal turning points that affect the cost and availability of credit.
Bank Net Interest Margin - Frequently Asked Questions
The aggregate NIM for all FDIC-insured institutions is 2.80% as of Q3 2020, per FRED series USNIM. This represents the average spread between interest income earned and interest expense paid.
Counterintuitively, a moderately high NIM (3-3.5%) is better for borrowers than a very low NIM because it means banks are profitable enough to lend freely. When NIM is compressed, banks restrict lending to protect profitability.
Flat or inverted yield curves (short-term rates near or above long-term rates), deposit competition from fintechs and money market funds, and rapid rate changes that create asset-liability mismatches. The 2023 regional bank stress was partly a NIM compression event.
Community banks ($1-10B assets) typically have higher NIMs (3.5-4%) because they make more commercial loans at wider spreads. Large banks ($250B+) run lower NIMs (2.5-3%) but compensate with fee income and scale. Regional banks fall in between.
Several regional banks (Silicon Valley Bank, Signature Bank) failed in part because rapid rate increases cratered the value of their long-duration bond portfolios while deposit costs surged. Their NIM collapsed, triggering deposit flight and FDIC takeover.
FRED series USNIM from FDIC Quarterly Banking Profile data. Calculated from aggregate call report data filed by all FDIC-insured depository institutions. Updated quarterly.