The president of the Iowa Bankers Association says a new federal report shows Iowa’s banks outperformed the banks in virtually all other states nationwide last year. John Sorensen says it’s a clear sign Iowa was hurt less severely by the country’s economic downturn of the past few years and that Iowa’s recovered more quickly.
“Total earnings for 2010 approximated $487-million,” Sorensen says. “That is a 23-percent increase over the prior year. From a long-term perspective, when you look at annual earnings, it just moves us closer to what we normally expect from the industry.”
He says Iowa’s financial institutions have weathered the nation’s financial turmoil very well. During the past year, Iowa banks made nearly $43-billion in consumer, agricultural and business loans. Sorenson says that’s just four-percent below the record set in 2008.
“The good news is that 93% of Iowa’s 360 bank and thrift charters were profitable,” Sorensen says. “That reflects sound loan underwriting and a commitment from our financial institutions to providing our customers with the right product at the right time.”
The FDIC says Iowa’s 93% profitability rate for last year compares very favorably to the national rate of 79%. While many states saw multiple bank failures during the recession, Sorensen says Iowa only had one bank fail about two years ago. Iowa banks are still growing, he says, as bank deposits grew by three-percent last year.
Sorensen says that shows Iowans continued to appreciate the value of federal deposit insurance and the benefits of doing business with their local bank. “We need these institutions to be profitable,” Sorensen says. “Typically, that profitability represents the economic activity that’s taking place in the community. The health of our financial institutions is very important to their ability to serve the credit needs of businesses and consumers and support our communities.”
He says banks with charters in Iowa now manage more than $53-billion in Iowans’ deposits. Learn more at: “www.iowabankers.com“.