Iowa bank profits and loans up in final quarter of 2012

A combined 29 percent jump in net profit recorded

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Iowa banks and savings institutions recorded a combined 29 percent jump in net profit during the final quarter of 2o12, mirroring a similar increase nationally during the same period.

Data released Tuesday by the Federal Deposit Insurance Corp. show federally insured Iowa financial institutions posted a net profit of $808 million on Dec. 31, compared with $626 million on Sept. 30, 2012.

For the year, net income income rose 17.4 percent from $688 million on Dec. 31, 2011.

Iowa banks and savings institutions recorded loans and leases of $43.9 million at the end of 2012, up 3.5 percent from $42.4 million on Sept. 30, 2012, and a year-over-year increase of 0.75 percent, from $42.7 million on Dec. 31, 2011.

Deposits at Iowa federally insured financial institutions grew 3 percent, to $59.4 million, through Dec. 31 from $57.7 million at the end of the third quarter of 2012. Year over year, deposits rose 6.8 percent from $55.7 million at the end of 2011.

The FDIC said profits at U.S. banks jumped almost 37 percent from October through December, reaching the highest level in six years, as banks continued to increase lending. Banks earned $34 billion in the quarter, rising to $$141.3 billion on Dec. 31, from $106.8 billion on Sept. 3o.

Sixty percent of the FDIC-insured banks reported improved earnings from the fourth quarter of 2011. The agency said higher non-interest income and lower provisions for loan losses continued to account for most of the year-over-year improvement in earnings.

"The improving trend that began more than three years ago gained further ground in the fourth quarter," said FDIC Chairman Martin Gruenberg in a statement accompanying the data. "Balances of troubled loans declined, earnings rose from a year ago and more institutions of all sizes showed improved performance."

Insured banks and thrifts charged off $18.6 billion in uncollectible loans during the quarter, down $7.0 billion, or 27.4 percent, from a year earlier. The amount of noncurrent loans and leases — those 90 days or more past due or not accruing interest — fell for the 11th consecutive quarter.

The FDIC said loan balances posted a sixth quarterly increase in the last seven quarters, rising by $118.2 billion, or 1.6 percent.   Loans to commercial and industrial borrowers increased by $53.4 billion, or 3.7 percent, while credit card balances posted a seasonal increase of $28.2 billion, or 4.2 percent.

Loans secured by nonfarm nonresidential real estate properties grew by $14.6 billion, or 1.4 percent. Home equity lines of credit declined by $12.6 billion, or 2.2 percent, and real estate construction and development loans fell by $6.6 billion, 3.1 percent — a signal that the home-building industry continues to struggle despite low mortgage interest rates.

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