Iowa banks reported net income of nearly $1.1 billion in the final quarter of 2018, up 16 percent from the same period last year.

“We’re continuing to see the benefits of the second longest economic expansion on record,” John Sorensen, president and CEO of the Iowa Bankers Association, said in a release. “Our community banks are benefiting from higher revenue and a lower effective tax rate, allowing them to keep a greater percentage of each dollar earned for local investment. This means Iowans are benefiting from a healthy, competitive banking industry.”

The bulk of profits, slightly more than $1 billion, was generated by banks with more than $100 million in assets. Loan volume increased to $62 billion at the end of the year, up from $59 billion in the fourth quarter of 2017, with loan quality remaining strong, according to a release. Net loan charge-offs were at 0.11 percent, compared with 0.15 percent the year prior. 

Noncurrent loans remained steady at 0.62 percent. Deposits increased 3.9 percent to $71.4 billion, yet have not kept pace with the increase in demand for loans. Return on assets, another indicator of overall bank performance, improved to 1.28 percent, compared with 1.15 percent in the year-ago period. Delinquencies in ag loans have risen along with a six-year decline in farm income, but remain relatively low, but remain relatively low, according to the release. 

Nationally, the Federal Deposit Insurance Corp. reported bank profits of $59.1 billion in the fourth quarter, up 133.4 percent or $33.8 billion from a year ago. The improvement in net income was led by higher net operating revenue and lower income tax expenses, the FDIC said. The number of banks on the FDIC’s Problem Bank List dropped to 60 from 71 in the fourth quarter, the lowest number since the first quarter of 2007.