Recommended Free Tools
A loan charge-off means a bank has removed an amount it considers uncollectible from its books and charged it against reserves. It signals recognized credit losses, but it does not by itself show whether a bank is financially sound. To judge what the figure means, compare its trend and loan category with delinquencies, noncurrent loans, reserves, provisions, earnings, capital and liquidity.
What is a loan charge-off?
The Federal Reserve defines charge-offs as “the value of loans and leases removed from the books and charged against loss reserves.” In practical terms, the bank recognizes that some amount is not expected to be collected and reduces the loan asset accordingly. This accounting treatment does not, on its own, establish whether the bank continues collection efforts.
As an Amazon Associate I earn from qualifying purchases.
For rates, look for net charge-offs: gross charge-offs minus recoveries. The Federal Reserve calculates a loan-category rate by dividing quarterly net charge-offs by average loans outstanding in that category, then annualizing the result. That annualized rate is not the same as a raw dollar total or an unannualized quarterly figure. Federal Reserve: Charge-Off and Delinquency Rates on Loans and Leases at Commercial Banks and Federal Reserve calculation methodology.
Quick wins for a faster PC:
Repair Windows errors before they cause bigger problemsFix Now →Scan for outdated or missing drivers - takes under a minuteDriver Scan →How is a charge-off different from delinquency?
Delinquency describes payment status; a charge-off records an amount removed as uncollectible. The Federal Reserve’s delinquency measure includes loans at least 30 days past due that are still accruing interest, as well as loans in nonaccrual status. Because they measure different things, delinquency and charge-off figures need not move at the same time.
#1 Best Overall
Noncurrent loans are also distinct from charge-offs. A noncurrent-loan measure captures loans that have reached a specified troubled status, while charge-offs reflect losses already recognized and removed from the books. Use the institution’s definitions and reporting period when comparing them.
What do charge-offs say about a bank’s financial health?
A higher net charge-off rate means the bank recognized more net losses relative to its average loan balance over the measured period. Losses use up the allowance for credit losses; replenishing that allowance through provisions can reduce earnings. A sustained rise, especially in a material loan category, can therefore be a warning sign—but it is not a stand-alone verdict on solvency or overall health.
A falling rate is not automatically reassuring. It may follow an earlier wave of charge-offs, reflect a changed average loan balance, or result from a different portfolio mix. Check accompanying credit-quality and financial measures rather than interpreting the direction alone.
Which other measures should you check?
- Loan category and portfolio mix: Compare like with like. Credit cards, auto loans, commercial real estate and other portfolios can have different loss patterns, so an aggregate rate can hide divergent movements.
- Past-due and noncurrent loans: These show payment problems and troubled balances that complement, but are not interchangeable with, realized charge-offs.
- Allowance for credit losses: The allowance is a balance-sheet contra-asset that reduces reported loans and represents estimated credit losses within applicable accounting rules. Consult the bank’s current terminology and filing footnotes; the Federal Reserve’s older supervisory material uses the term “allowance for loan and lease losses.” Federal Reserve: Allowance for Loan and Lease Losses.
- Provision expense: This is the expense associated with setting aside or adjusting for expected credit losses. Compare it with charge-offs and earnings for the same period; the two figures describe related but different aspects of credit costs.
- Earnings: Profitability affects the capacity to absorb credit costs, but industry earnings figures do not establish an individual bank’s condition.
- Capital and liquidity: These are separate dimensions of resilience: capital helps absorb losses, while liquidity concerns the ability to meet obligations as they come due.
- Reporting basis and period: Federal Reserve commercial-bank series, FDIC-insured institution aggregates and an individual bank’s filings may not cover the same population or use identical measures. Do not compare an annualized quarterly rate directly with a dollar amount or a differently defined ratio.
What do recent U.S. industry figures show?
Industry aggregates help provide context, not a pass-or-fail benchmark for a particular bank. The FDIC’s Quarterly Banking Profile covers the aggregate financial condition, earnings, lending and deposit activity, and asset quality of FDIC-insured institutions; it is typically published about 55 days after quarter end. FDIC: Quarterly Banking Profile.
Rank #3
- Ideal for Record Keeping - Receive 2 account ledger books, sized at 6" x 8". Featuring 110 pages, it provides ample space to log transactions over an extended period, offering a valuable resource for meticulous financial planning and organization.
- Sturdy Kraft Cover - The kraft cover stands out as a distinctive feature of our account ledger books, offering a durable shield against daily wear and tear for long-lasting use. The classic, rustic appearance lends a timeless and professional look that seamlessly fits into any setting.
- Top-Quality Design - Experience sophistication with elegant "Account Tracker" lettering embossed in luxurious gold foil. The coil ring binding is not just stylish but also functional, ensuring smooth page-turning and easy navigation, thus enhancing the usability of the account ledger books.
- Portable and Lightweight - Our account ledger books are designed to be compact and lightweight, allowing for effortless transportation in a bag or briefcase. This convenient feature makes them perfect for on-the-go use, ensuring that you can access your records anytime, whether you're at work or on the move.
- Versatile Utility - Our accounting ledger book is highly adaptable, serving as a comprehensive tool for tracking finances, budgets, expenses, and various other business or personal records. Perfect for individuals, entrepreneurs, or small business owners seeking a reliable and efficient method to manage their financial affairs.
| Measure | Published figure | How to read it |
|---|---|---|
| Net charge-offs to loans | 0.59% in Q1 2026 for FDIC-insured institutions; 0.67% in Q1 2025 | Year-over-year aggregate comparison; not a measure of any one bank. |
| Quarterly net charge-off rate | 0.63% in Q4 2025, one basis point higher than the prior quarter and eight basis points below Q4 2024 | The FDIC said this was 0.15 percentage point above its stated pre-pandemic average of 0.48%. |
| Past-due and nonaccrual rate | 1.56% in Q4 2025 | Below the FDIC’s stated pre-pandemic average of 1.94%; selected portfolios still showed persistent weakness. |
| Credit-loss provision expense | $20.9 billion in Q4 2025 | Roughly in line with the prior quarter and equal to total net charge-offs for that quarter, according to the FDIC. |
| Reserve coverage ratio | 171.2% in Q4 2025 | Aggregate allowance divided by noncurrent loans. It declined slightly as the funded allowance fell and noncurrent balances rose; it is not a loss rate. |
| Aggregate net income and return on assets | $80.5 billion and 1.26%, respectively, in Q1 2026 | Broad earnings context only; neither figure establishes the health of an individual institution. |
The FDIC also reported that Q4 2025 weakness persisted in selected portfolios, including non-owner-occupied commercial real estate, multifamily commercial real estate, auto loans and credit cards. That is one reason aggregate changes should be read alongside category-level results. These figures describe their stated quarters and should not be treated as current beyond those periods. FDIC: Quarterly Banking Profile data and commentary.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How to compare banks or reporting periods
- Match the period and rate basis. Confirm whether the figure is quarterly, trailing-period or annual, and whether a quarterly rate has been annualized.
- Compare the same loan category. Check portfolio mix and avoid treating unlike categories as directly comparable.
- Read losses beside payment status. Set net charge-offs alongside delinquency and noncurrent-loan data for the same reporting period.
- Check reserve and provision context. Review the allowance, its coverage of noncurrent loans, and provision expense; coverage is a balance-sheet ratio, not a realized loss rate.
- Assess the broader balance sheet and results. Consider earnings, capital and liquidity, then read the bank’s own current quarterly filing and disclosures.
This is a general explanation of U.S. banking measures, not a diagnosis of any named institution. A bank-specific conclusion requires its current disclosures and comparable periods and categories.
Quick Recap
Best Value
- EASY TO MANAGE - Use this bill payment tracker notebook for tracking your personal expenses. Never miss another payment again, keep track of all your bills and expenses in one place.
- BILL TRACKER NOTEBOOK FEATURES - Budget planner and monthly bill organizer include: Bill payments checklist, to be paid, payment, due date, paid date, amount due, amount paid, blance and notes. This bill payment organizer will help you to track your bill payments through last years.
- HIGH QUALITY - The bill payment tracker spiral notebook size of 5.8" x 8.5", just the perfectly size to fit in your backpack, purse or laptop case. Bill payment tracker monthly organizer is used to high quality 100gsm pure white paper, elastic band and a back pocket for extra space. it comes with 3680 entry lines (29 lines per page), make sure you have enough space to take control of your finances.
- MANAGE YOUR FINANCES & SUCCEED - Use this bill planner and organizer is perfect for your small business or your personal finance, You will be able to easily analyze your financial activities and quickly prepare accurate financial statements. Great for small business owners, personal use or for family expense tracking.
- THE PERFECT GIFT - Use monthly bill payment log book for your personal or business finances, give it to your friends, family as a gift for Birthday| Easter|Children's Day|Halloween|Thanksgiving|Christmas|Back to school and New Year's Day.
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
Do these 3 things before closing this tab:
1Fix the driver behind crashes, sound loss and screen glitches2Repair Windows errors before they cause bigger problems3Scan for outdated or missing drivers - takes under a minute
