Iowa banks post strong loan growth in first quarter

Iowa banks recorded strong growth in loans as well as higher assets and net income in the first quarter of this year.

The Federal Deposit Insurance Corp. released data showing Iowa banks had more than $49.6 billion in total loans at the end of first quarter on March 31, up 9 percent from $45.5 million at the end of the same quarter of 2014. That compares with a 5.4 percent increase in total loans nationwide.

Iowa bank assets reached $76.6 billion at the end of the first quarter, compared with $73.5 billion on March 31, 2014. Net income was $226 million in the first quarter, up from $202 million at the end of the first quarter of 2014.

Return on assets, another indicator of overall bank performance, held steady at 1.19 percent at the end of the first quarter of 2015, compared with 1.10 percent at the end of the first quarter of last year.

John Sorensen, president and CEO of the Iowa Bankers Association, said loan demand in real estate, farm, commercial and consumer segments all saw increases in the most recent quarter from the same period last year. Sorensen said loan quality also improved during the first quarter.

'Noncurrent loans were down to 0.63 percent of total loans from 0.81 percent the year prior,” Sorensen said in a news release. 'Nonperforming loans (those 90 days or more past due and not accruing interest) declined to 0.59 percent of total loans from 0.75 percent the year prior.

'Iowa bank capital also rose 2.7 percent from the year prior to $8.2 billion, principally reflecting investments from Iowans in local financial institutions.”

Nationally, bank net income for the first quarter increased to $39.8 billion from $37.2 billion a year ago, driven in part by stronger loan demand. The number of banks on the FDIC 'problem list” fell from 291 to 253 during the first quarter - the smallest number of banks on the list in six years.