JOHNSTON, Iowa (Feb. 26, 2025) — The Federal Deposit Insurance Corp. (FDIC) data released Tuesday showed the banking industry’s strength and ability to withstand economic uncertainty and interest rate risk. Iowa banks experienced steady growth throughout the year and expect continued strength in 2025 to support Iowa’s robust economy.
“This year-end data highlights the need for a strong banking system in our state,” said Adam Gregg, president and CEO of the Iowa Bankers Association. “Iowa banks continued to see growth throughout 2024 despite the uncertainties that still exist in the market. Iowans continue to benefit from the state’s competitive banking sector, and Iowa banks continue to fuel the state’s economy as a trusted source of financial services for consumers and businesses.”
Iowa Banking Results
Iowa banks continued to see steady deposit and loan growth in the fourth quarter. Banks experienced deposit growth of 4.4% year-over-year and 1.7% from the third quarter, ending 2024 with $107 billion in deposits. Loan growth was 4.1% from the prior year and 1.3% from the previous quarter. Two hundred thirty-four Iowa-domiciled banks provided nearly $88 billion in loans to support the economy, up from $84 billion in 2023. The quality of these loans was unchanged from the previous quarter with average net loan charge-offs at 0.09%. The non-current percentage of total loans was 0.53%, up slightly from 0.48% in 2023. This is an indication of the financial health of Iowa borrowers. The average loan-to-deposit ratio at Iowa banks was 82%. This healthy balance highlights the strength of Iowa’s banking industry.
Total assets for Iowa banks exceeded $127 billion at year-end, an increase of 3% from the prior year. Banks saw continued asset growth for two consecutive quarters.
The competitive interest rate environment continued to have an impact with Iowa banks reporting a slight decrease in net income year-over-year. Net income for 2024 was $1.1 billion compared to $1.2 billion in 2023. The net interest margin for Iowa banks continued to be below the national number – Iowa banks finished the year at 2.8%, 38 points below the national net interest margin at year-end. Iowa’s competitive banking sector continued to provide benefit to consumers and businesses. The average return on assets (ROA), an overall indicator of bank performance, was 0.91% at year-end, an increase from 0.86% in the third quarter.
National Banking Results
The FDIC reported on the strength of the banking industry in its fourth quarter 2024 performance results noting, “With strong capital and liquidity levels to support lending and protect against potential losses, the banking industry continued to support the country’s needs for financial services while navigating the challenges presented by elevated unrealized losses, asset quality weakness in certain portfolios, and volatility in market interest rates.”
Total deposits increased by 0.8% from the third quarter to $19.2 trillion in the fourth quarter. Domestic deposits increased by $214.4 billion in the fourth quarter. Savings and transaction deposits led the growth, while brokered deposits and time deposits decreased. Most community banks saw an increase in deposits in the fourth quarter.
The banking industry ended 2024 with three straight quarters of loan growth. Total loans grew to $12.7 trillion, an increase of 0.8% from the previous quarter and 2.1% from the prior year. The FDIC data showed national quarterly loan growth was impacted by reclassifications, credit card loans and loans to non-depository financial institutions. Community banks continued to have broad-based loan growth in the fourth quarter, with an increase of 1.3% from the third quarter. Total loans and leases at community banks grew 5.1% year-over-year.
The FDIC reported that asset quality metrics were favorable overall, but the industry continued to see deterioration in commercial real estate loans and credit card portfolios through year-end. Past-due and nonaccrual loans were 1.6% of total loans to end the year, which is still 34 basis points below the pre-pandemic average. Total assets fell slightly from the previous quarter to $24.1 trillion but increased by 1.8% from 2023. Community banks also saw asset growth of 3.7% totaling $98.1 billion year-over-year.
The industry saw year-over-year increases in both net income and ROA. 2024 net income was $268.2 billion, an increase of 5.6% from the prior year. ROA increased slightly from year-end 2023 to 1.12% in 2024. The FDIC reported, “The increases in net income and ROA occurred primarily because one-time events in 2023 and 2024 led to lower noninterest expense, higher noninterest income, and lower realized securities losses in 2024.” Quarterly net income and ROA for the nation’s banks also increased due to higher net interest income.
Community banks reported a 2.4% full-year net income decline from the prior year to $25.9 billion in 2024. According to the FDIC, higher noninterest and provision expenses drove the decline in community bank earnings. Community bank ROA at year-end was 0.95%.
The number of banks on the FDIC’s “problem bank list” decreased by two to 66 banks. In a statement from Acting Chairman Travis Hill, the FDIC noted for the first time since 1990, it would no longer disclose the aggregate assets of banks on this list. The FDIC reported one bank failure during the quarter and one after quarter-end.
The Deposit Insurance Fund (DIF) balance was $137.1 billion on Dec. 31, 2024, an increase of $4 billion from the end of the third quarter. The DIF reserve ratio — the fund balance relative to insured deposits — increased by 3 basis points in the fourth quarter to 1.28%. According to the FDIC, “the reserve ratio remains on track to reach 1.35% by the statutory deadline.”
About the Iowa Bankers Association
The Iowa Bankers Association represents Iowa banks and savings institutions. Iowa bankers are committed to the values of honesty, hard work and community service, and have been a trusted resource for Iowans for more than 135 years. Iowa banks offer FDIC insurance and lend nearly $88 billion to help individuals, business owners and agriculture. Nearly 40,000 Iowans work at an Iowa bank, and bank employees volunteer more than 300,000 hours to support local communities each year. To learn more, visit www.iowabankers.com.