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Cedar Rapids, Iowa 52401
Iowa bank profits rise 6 percent
George C. Ford
Aug. 28, 2014 3:30 pm, Updated: Aug. 28, 2014 3:59 pm
CEDAR RAPIDS - Iowa aggregate bank profit rose 6 percent to $216.1 million in the second quarter from $201.5 million in the same period of 2013, reflecting a national gain of 5.3 percent during the same period.
Loan volumes and asset quality also improved, according to second-quarter results released by the Federal Deposit Insurance Corp.
Iowa banks provided more than $46.6 billion in total loans and leases as of June 30, up from $43.8 billion by the end of the second quarter of 2013. Loan growth was positive in almost all loan categories, with the largest area of growth in construction and land development up 22 percent from last year.
Net loan charge-offs were at 0.11 percent, down from 0.12 the year prior. Non-current loans were at 0.74 percent, down from 1.01 percent the year prior. Non-performing loans were at 0.68 percent, down from 0.96 percent the year prior.
Total assets reached $73.5 billion, compared with $71.2 billion in the second quarter of 2013.
Return on assets, an indicator of overall bank performance, also improved to 1.14 percent in the second quarter from 1.10 percent in the same quarter of 2013.
'Iowa banks continue to see steady improvement in performance as the overall economy improves,” said John Sorensen, president and CEO of the Iowa Bankers Association. 'The improvement in net income is driven primarily by increased loan activity, which reflects a growing confidence by Iowa businesses and consumers.”
While noting that farm income will be lower this year due to a drop in commodity prices, Sorensen said the balance sheets of most farmers remain strong and livestock is providing an offset to the lower crop prices.
Nationally, aggregate bank profit also improved in the second quarter to $40.2 billion, up 5.3 percent from $38.2 billion in the same quarter of 2013 as banks reduced expenses and lending marked its fastest pace since 2007.
The number of banks on the FDIC's problem list fell to 354 in the second quarter, the lowest number in more than five years.