JOHNSTON, Iowa (Feb. 24, 2026) — The Federal Deposit Insurance Corp. (FDIC) data released Tuesday showed the banking industry’s strength through continued economic uncertainty. Iowa banks experienced steady loan growth throughout the year and expect continued growth in 2026 to support Iowa’s robust economy.
“Iowa banks continue to be the backbone of our communities,” said Adam Gregg, president and CEO of the Iowa Bankers Association. “Banks use deposits to make loans in their communities, and this data highlights just how important those dollars are. Iowa banks fuel Iowa’s economy by providing loans – local deposits multiply and support local lending. The strength and stability of Iowa’s banking system continue to support homeowners, farmers, business owners and families.”
Iowa Banking Results
Iowa banks continued to see steady deposit and loan growth in the fourth quarter. Banks experienced deposit growth of 3.6% year-over-year and 1.8% from the third quarter, ending 2025 with $110.8 billion in deposits. Loan growth was up 4.7% from the prior year and 1.6% from the previous quarter. The 229 Iowa-domiciled banks provided nearly $92 billion in loans to support the economy, up from $87.8 billion in 2024. The quality of these loans was unchanged from the previous quarter with average net loan charge-offs at 0.10%. The noncurrent percentage of total loans was 0.58%, up slightly from 0.53% in 2024. The average loan-to-deposit ratio at Iowa banks was 83%. This healthy balance highlights the strength of Iowa’s banking industry.
Total assets for Iowa banks exceeded $132 billion at year-end, an increase of 3.9% from the prior year. Iowa banks saw continued asset growth through 2025.
Iowa banks reported a slight increase in net income year-over-year. Net income for 2025 was $1.6 billion compared to $1.1 billion in 2024. The net interest margin for Iowa banks continued to be below the national number – Iowa banks finished the year at 3.21%, 9 basis 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 1.21% at year-end, an increase from 1.17% in the third quarter.
National Banking Results
The FDIC reported on the strength of the banking industry in its fourth quarter 2025 performance results noting loan growth acceleration, favorable asset quality metrics, and strong capital and liquidity levels. FDIC Chairman Travis Hill highlighted in his remarks, the banking industry has “now had fairly robust loan growth for three consecutive quarters after two years of little to no loan growth.”
Total loans grew to $13.5 trillion, an increase of 2% from the previous quarter. “The industry’s loan growth rate in the fourth quarter was 5.9 percent, the fastest annual growth rate in 11 quarters.” The majority of community banks had loan growth in the fourth quarter, with nonfarm nonresidential commercial real estate loans leading quarterly growth. Total loan and lease balances at community banks grew 5.4% from the year-ago quarter.
Total deposits increased by 1.7% from the third quarter to $20.1 trillion in the fourth quarter, with domestic deposits rising for the sixth consecutive quarter. Most community banks saw an increase in total domestic deposits in the fourth quarter, and domestic deposit growth for community banks was 5% from the year-ago quarter.
The FDIC reported asset quality metrics were favorable overall, but the industry continued to see deterioration in past-due and nonaccrual loans through year-end. Past-due and nonaccrual loans (loans that are 30 or more days past due or in nonaccrual status) rose from the previous quarter to 1.56%. Total assets grew slightly from the previous quarter to $25.3 trillion, an increase of 4.8% from 2024. Community banks saw quarterly asset growth of 1.5%, increasing total assets to $2.8 trillion at year-end.
The industry saw year-over-year increases in both net income and ROA; however, net income declined 2% in the fourth quarter from the prior quarter. ROA increased slightly from the year-ago quarter to 1.24% in fourth quarter 2025. The FDIC noted quarterly net income decline was driven by higher noninterest expense and non-recurring items at several larger firms.
Community banks reported a $5.5 billion full-year net income increase from the prior year to $29.9 billion in 2025. Quarterly net income decreased by 3.8% from the prior quarter. According to the FDIC, higher noninterest expense and securities losses drove the decline, offsetting the increases in net income. Community bank pretax ROA at year-end was 1.35%.
The number of banks on the FDIC’s “Problem Bank List” increased by three in the fourth quarter to 60 total banks – representing only 1.4% of total banks. According to the FDIC, “One bank opened during the quarter; four banks were sold to non-FDIC-insured institutions; two banks closed voluntarily and liquidated their assets; 36 institutions merged with other banks; and no bank failed during the fourth quarter.”
The Deposit Insurance Fund (DIF) balance was $153.9 billion on Dec. 31, 2025, an increase of $3.7 billion from the end of the third quarter. The DIF reserve ratio — the fund balance relative to insured deposits — increased by 2 basis points in the fourth quarter to 1.42%, which is 14 basis points higher than year-end 2024, and 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 nearly $92 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.