FDIC Data: Strong Banks Support Iowa’s Economy

JOHNSTON, Iowa (Aug. 26, 2026) — According to Federal Deposit Insurance Corp. (FDIC) data released Tuesday, the banking industry finished the second quarter in a strong position with widespread, robust loan growth for several consecutive quarters. Iowa banks reported loan growth, stable deposits and a healthy loan-to-deposit ratio to support local economies.

 

“Despite ongoing inflationary pressure, Iowa’s banking industry remained strong through the first half of 2026,” said Adam Gregg, IBA president and CEO. “The strength of Iowa banks is directly tied to the strength of Iowa communities. Local deposits fuel local lending, and lending supports growth for businesses, homeowners and farmers alike.”

 

The 226 Iowa-domiciled banks saw an increase in loans this quarter to $88.1 billion. Total deposits for the second quarter were $106.8 billion, compared to $107.5 billion in both the prior year and previous quarter. Iowa banks had a strong loan-to-deposit ratio of 82.5%, putting deposits to work in local communities. Bank merger and acquisition activity in the state continues to impact data comparisons.

 

Loan quality remains strong with average net loan charge-offs at just 0.06%, which signifies strong loan portfolios. The noncurrent percentage of total loans at 0.64% for Iowa banks shows financial stability in the state, significantly lower than the nation’s 0.93%.

 

Total assets remain stable for Iowa banks this quarter at $128 billion, compared to $128.1 billion in the first quarter. Second quarter total assets were 0.8% lower than the same period in 2025.

 

Iowa banks had $909 million in net income through the second quarter. The average return on assets (ROA), an overall indicator of bank performance, at Iowa banks was 1.44% in the second quarter, a 31-basis-point increase from the year-ago quarter ROA.

 

The FDIC said Tuesday that the banking industry continued to show ongoing strength through the second quarter to support economic growth. The FDIC reported “the banking industry continued to maintain strong capital and liquidity levels, which support lending and protect against potential losses.”

 

Total deposits in the second quarter were $20.7 trillion, a slight increase from first quarter and a 5.4% increase from second quarter 2025. Domestic deposits increased for the eighth consecutive quarter. Community banks saw a $9.2 billion increase in domestic deposits this quarter.

 

The nation’s banks had loan growth of 1.8% from the prior quarter to $13.9 trillion. The FDIC reported that loan growth was widespread and rose 6.8% from the year-ago quarter. Community banks also reported broad-based loan growth, increasing by 1.6% from the prior quarter.

 

Asset quality metrics improved this quarter with both past-due and nonaccrual loans and net charge-off rates decreasing from the prior quarter. Total assets were $26.5 trillion in the second quarter, a 1.2% increase from the previous quarter and a 5.9% increase from second quarter 2025. Likewise, community banks saw growth in total assets from the year-ago quarter and prior quarter.

 

Quarterly net income was $90.1 billion for the nation’s banks, a 12% increase from the prior quarter. Community banks also reported an increase in net income to $8.7 billion, up 8.2% from the previous quarter. FDIC Chairman Travis Hill noted in his remarks that the industry reported an ROA of 1.37% which is close to the record high of 1.41% set in 1984.

 

There are 47 banks on the FDIC’s “Problem Bank List” as of the second quarter. Only 1.1% of total banks are considered “problem banks” which is within the normal range. Four banks opened and one bank failed in the second quarter.

 

The Deposit Insurance Fund (DIF) balance was $161.1 billion on June 30, an increase of $3.7 billion from the prior quarter. The DIF reserve ratio — the fund balance relative to insured deposits — increased by 5 basis points to 1.48%, above the statutory minimum of 1.35%.