For the first time since December 2008, Iowa’s state-chartered banks reported an average return on assets that meets industry criteria for healthy institutions.

The state’s 305 state banks reported a return on assets of slightly more than 1 percent for the quarter ended March 31.

“That is back to an overall average return on assets that has traditionally been an industry benchmark of adequate return,” said John Sorensen, president and CEO of the Iowa Bankers Association.

Banks reported net income of $135 million for the quarter, an increase of $21 million from the same quarter last year. Total assets as of March 31 were $52.4 billion, up from $50.8 billion last year, and earning assets increased nearly $8 billion to $48.5 billion.

Deposits also increased, to $42.4 billion from $40.5 billion a year ago.

“All the right things are happening that are indicative of an improving economy,” Sorensen said. “We’d like to see the economy improve more rapidly.”

Sorensen said banks still are not making enough loans but are becoming more aggressive in attempting to do so.

That situation could change as the state continues to show a reduction in mortgage foreclosures.

A report last week from the Mortgage Bankers Association showed that initial foreclosure actions dropped about 14 percent in the first quarter from the same quarter last year.

“That’s the kind of statistic we need in order to regain a healthy home building and home purchasing environment,” Sorensen said.

Iowa ranked 43rd in the number of foreclosures initiated in the quarter.