After several challenging years, a report shows Iowa’s financial institutions are clearly on the mend and recovering well from the recession. John Sorensen, president and C.E.O. of the Iowa Bankers Association, says the report details how Iowa banks and savings institutions enjoyed steady growth and financial health in the fourth quarter of 2011.
“We’ve been helped by agriculture in Iowa and agriculture-related businesses,” Sorensen says. “Iowa banks are reaping the benefits of being relationship lenders, rather than lending indiscriminately. They know their customers and are working to meet the needs of their communities.” The report says total deposits in Iowa banks rose more than $55-billion in the fourth quarter.
That’s up a-billion from the third quarter and more than two-billion from the previous year. Sorensen says it shows people have more money to save and they’re saving it in Iowa banks, instead of risking it in the stock market. “People still enjoy the fact their deposits are federally-insured at an Iowa bank and they like that security right now, with the current market environment,” Sorensen says.
“We are starting to see some improvements in the economy and the markets are also reflecting that to some degree.” The report says more than 70% of Iowa’s financial institutions reported earnings gains for the second year in a row, and more than 95% were profitable at the end of 2011. He says Iowa’s banks weathered the recession of the past few years very well.
“We’ve only had two bank failures throughout the crisis,” Sorensen says. “The vast majority of our banks are in very solid financial health. Even if you look nationally, you’re starting to see a drop in the number of problem banks. I think we’re working our way out and that’s good news for both Iowa banks and for Iowans.”
The report also finds: Net income for all Iowa institutions improved by $271 million from the prior year to $685 million; Total earning assets also increased $2.1 billion to $63.4 billion; Iowa’s total loans and leases also showed steady improvement, reaching $42.7 billion, up $442 million from the third quarter.
The Iowa Bankers Association represents Iowa’s 345 banks and savings institutions.