Iowa bank profits rise in fourth quarter

Iowa banks ended the fourth quarter of 2014 with higher deposits and earnings as well as improved loan demand.

The state's 320 financial institutions ended the year with net income of $849 million, up from $813 million at the end of 2013, according to the Federal Deposit Insurance Corp. Return on assets, another indicator of overall bank performance, was 1.15 percent at the end of 2014, compared with 1.13 percent at the end of 2013.

Iowa bank assets reached $75.9 billion in 2014, up from $73 billion the previous year. Deposits rose to $61.7 billion at the end of 2014 from $59.7 billion on Dec. 31, 2013.

Iowa banks provided $49.5 billion in total loans and leases by the end of 2014, up from $45.7 billion, or 8.3 percent, at the end of 2013. Loan demand in real estate, farm, commercial and consumer segments all saw increases from the year prior.

Net loan charge-offs ended the year at 0.15 percent of total loans, compared with 0.19 percent in 2013.

Non-current loans were down to 0.65 percent of total loans from 0.83 percent in 2013. Non-performing loans - those 90 days or more past due and not accruing interest - declined to 0.62 percent of total loans from 0.78 percent the year prior.

John Sorensen, president and CEO of the Iowa Bankers Association, said the 8.3 percent year-over-year increase in Iowa bank lending is a key indicator of the condition of the state's banks.

'This is well ahead of the 5 percent national average,” Sorensen said in a statement accompanying the data. 'Managing expenses remains a high priority for banks amid ever-rising regulatory and technology costs. They also continue to watch for the increasing possibility that the Federal Reserve will begin to raise interest rates later this year.”

Nationally, net income for 2014 declined slightly from $154.3 billion in 2013 to $152.6 billion last year, driven in part by a national decline in mortgage loan demand. The number of banks across the nation on the FDIC 'problem list” fell to 291.