Iowa construction and development loans up
BPC Staff Nov 25, 2015 | 9:12 pm
1 min read time
318 wordsAll Latest News, Banking and Finance, Real Estate and DevelopmentConstruction and land development loans led an 8.4 percent increase in lending in the third quarter over the same time last year, according to the Iowa Bankers Association.
Iowa banks provided more than $51.5 billion in loans in the third quarter, compared with $47.5 million in the year-ago period.
Demand for construction and land development loans saw the biggest increase, up 16.8 percent from the prior year, according to the IBA. However, demand was up for real estate, farm, commercial, consumer and all other lending categories.
Fewer banks were making the loans. IBA President and CEO John Sorensen blamed the Dodd-Frank Wall Street Reform and Consumer Protection Act for the demise of banks that could not keep pace with regulatory requirements. There were 315 state-chartered banks at the end of the third quarter, down from 360 in 2010. The sweeping legislation was passed in 2010 in response to the 2008 recession.
“The pace of loan growth has been hampered by excess regulations,” Sorensen said in a release. “Congress has an opportunity to fix some of the negative provisions of this law — and its 13,000 pages of implementing regulations — before we close out 2015. We urge them to do so.”
State banks also saw the quality of loans improve, with noncurrent loans at 0.61 percent of all loans, down from 0.78 percent in the third quarter of 2014, and nonperforming loans at 0.55 percent, down from 0.7 percent a year ago.
More than 98 percent of state banks reported a profit at the end of the third quarter. Total assets were $77.4 billion, up from $74 billion last year. Return on assets improved to 1.2 percent and surpassed the national average of slightly more than 1 percent.
Banks reported profits of $237.5 million for the third quarter, up 9.5 percent from a year ago. Nationally, net bank profits were $40 billion, up from $38 billion last year.
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