JOHNSTON, Iowa (May 27, 2026) — According to data released Wednesday by the Federal Deposit Insurance Corp. (FDIC), the banking industry continued to show resiliency and strong performance through ongoing economic uncertainty and inflationary pressures.
“Market uncertainties continue to affect consumers and the industry. Iowa banks remain committed to supporting the strength and vitality of local communities,” said Adam Gregg, president and CEO of the Iowa Bankers Association. “The first quarter results show Iowa’s banking industry remains stable and resilient, while continuing to prioritize the financial needs of consumers, farmers and business owners, and contributing to a stronger economy.”
Iowa Banking Results
Iowa’s banking industry reported modest declines in both loans and deposits during the first quarter. Recent bank merger and acquisition activity in the state had an impact on the quarterly data. Total loans were $88 billion as of March 31, a 0.6% decrease from first quarter 2025. Similarly, deposits fell by 1.2% year-over-year. Total deposits for the first quarter were $107.5 billion, compared to $108.8 billion the prior year. The average loan-to-deposit ratio at Iowa banks was 82%, consistent with the prior year.
Loan quality remains exceptionally strong with average net loan charge-offs at just 0.05%. The noncurrent percentage of total loans held steady at 0.62%, unchanged from first quarter 2025. This data indicates the financial health of borrowers remains strong.
First-quarter total assets were $128.1 billion, a 0.6% decrease compared to the same period in 2025. Iowa banks had $429 million in net income in the first quarter. The competitive interest rate environment and market volatility continue to have an impact on net interest income. The average return on assets (ROA), an overall indicator of bank performance, increased to 1.35% in the first quarter from 1.21% at year-end 2025.
National Banking Results
The FDIC reported that the nation’s banking industry had a strong start to the year with modest loan and deposit growth. According to the FDIC, “The banking industry continued to maintain strong capital and liquidity levels, which support lending and protect against potential losses.”
Total deposits rose this quarter to $20.5 trillion, a slight increase from both year-end and first quarter 2025. Domestic deposits continued to grow for the seventh straight quarter, this quarter by $389.7 billion. Community banks saw an increase of $28 billion in domestic deposits this quarter with approximately 69% of community banks reporting an increase in deposit account balances.
The Quarterly Banking Profile reported the nation’s banks had a loan growth rate of 7.1% from the year-ago quarter – the fastest annual growth rate since second quarter 2023. Total loans increased by 1.6% from the previous quarter to $13.7 trillion. Community banks reported loan growth of 0.8% this quarter, an increase of $16.1 billion from the previous quarter, with the strongest growth in nonfarm nonresidential commercial real estate loans. The FDIC noted, “growth was broad-based across all major portfolios except agricultural production and auto loans.”
Asset quality metrics remain favorable, with the past-due and nonaccrual (PDNA) loan ratio declining by 3 basis points to 1.53% this quarter. Weaknesses still exist in some portfolios – specifically PDNA rates remain elevated for multifamily commercial real estate loans, non-owner-occupied commercial real estate loans, credit card portfolios and auto loans. Total assets were $26.1 trillion in the first quarter, an increase of 6.6% from the prior year. Community banks saw a 1% increase in assets quarter-over-quarter to $2.8 trillion – an increase of 4.8% year-over-year.
Net income increased 3.6% from the previous quarter to $80.5 billion in the first quarter, largely due to higher noninterest income at larger institutions. Community banks reported a 3.9% increase in net income from the previous quarter to $8.1 billion.
The number of banks on the FDIC’s “Problem Bank List” decreased by six to 54 banks. Only 1.3% of total banks are considered “problem banks” which is within the normal range. Three banks opened, 54 banks merged with other banks, and there was one community bank failure in the first quarter.
The Deposit Insurance Fund (DIF) balance was $157.4 billion on March 31, an increase of $3.6 billion from year-end. The DIF reserve ratio — the fund balance relative to insured deposits — increased by 1 basis point to 1.43%, above the statutory minimum of 1.35%.
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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 $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.