The Federal Reserve said in a report that the U.S. banking system remains sound overall, although some firms are facing "sizeable" declines in the value of some fixed-rate assets following interest rate increases.

The central bank's semiannual supervisory report Thursday said bank capital remains above required levels at most firms. It added loan delinquency rates remained low overall, but with a slight uptick in some sectors, including commercial real estate.

• Banks Face Reinflation Risks: Moody's