Iowa banks increase lending in latest quarter

Iowa banks increased lending in the third quarter that ended Sept. 30. But that came at the same time the number of bank charters declined from the same quarter of the year before.

The Federal Deposit Insurance Corp. on Tuesday reported Iowa-chartered banks provided more than $55.5 billion in total loans as of the end of the third quarter, up 7.7 percent from $51.5 billion at the end of the same quarter of 2015.

Loans grew in all categories compared with the same period in 2015, including real estate, farm, commercial and consumer segments.

The number of Iowa bank charters continues to decline, down to 305 at the end of the third quarter of 2016 from 315 at the end of the same quarter last year.

'We've averaged about a merger per month in Iowa over the last few years,” said John Sorensen, president and CEO of the Iowa Bankers Association. 'It has picked up a little bit since the passage of Dodd-Frank (Wall Street Reform and Consumer Protection Act) in 2010, which added about 24,000 pages of additional regulation.

'It's easier to manage with scale. If you are larger and can hire the appropriate personnel, you can keep up with the new regulations.”

Sorensen said the rural-to-urban migration, which has been occurring in recent years, also has driven banking consolidation along with advances in technology.

'Many people in Iowa liked to see a face and have trust in their financial provider,” he said. 'The younger generation doesn't go into banks. It's all handled online. That's really had an impact on the number of physical bank locations.”