Iowa banks outperform the nation in second quarter

JOHNSTON, IOWA (Aug. 22, 2017) – According to second quarter results released by the Federal Deposit Insurance Corporation (FDIC) today, Iowa banks saw continued improvements in loan demand, outpacing the nation in loan growth for the quarter. Iowa-based banks provided more than $58.3 billion in total loans as of the end of the second quarter, up 5.71 percent from $55.1billion in the second quarter of the year prior. This compares to a 3.70 percent increase in total loans nationwide.  “Iowa banks provide the credit needed to drive the Iowa economy,” said Iowa Bankers Association President and CEO John Sorensen. “You can attribute much of their strong performance in the first half of 2017 to relationship lending. Iowa banks take the time to understand the needs of their customers and community, and act accordingly.” Iowa banks also outperformed the nation in loan quality. Noncurrent loans in Iowa were at 0.74 percent, compared to the national average of 1.23. Net charge-offs in Iowa were at 0.10 percent, compared to the national average of 0.49.  Return on assets (ROA), another indicator of overall bank performance, reached 1.25 percent in Iowa at the end of the second quarter, compared to the national average of 1.09. Total assets reached $85.2 billion, compared to $81.4 billion the year prior. Net income for Iowa banks, year-to-date at the end of the second quarter was $529 million, up from $493 million in the second quarter the year prior. “In spite of the favorable results, increased regulations and demographic trends are forcing an alarming rate of bank consolidation, added Sorensen. The number of bank charters in Iowa continued to decline in the second quarter, dropping to 301 from 308 the year prior. In addition, net interest margins declined to 3.38 from 3.41 the year prior. Nationally, bank net income year-to-date at the second quarter improved slightly to $92.1 billion from $82.6 billion a year ago. The number of banks across the nation on the FDIC “problem list” fell to 105 during the quarter, which is the smallest number of “problem banks” since the first half of 2008. The FDIC Deposit Insurance Fund, supported by bank premiums, increased to $87.6 billion in the second quarter, up $2.7 billion from the first quarter. - 30 -