Iowa Superintendent of Banking, Tom Gronstal, told the House Commerce Committee that Iowa's 319 state chartered banks are generally still in good shape.  The condition of a bank is measured by Capital adequacy, Asset risk, Management, Earnings, Liquidity, and Sensitivity to risk, the so-called CAMEL rating.

With one being the best CAMEL rating and five the worst, 123 Iowa banks are rated one, 180 rated two, 15 rated three or four, and none are rated five.

1. Capital:  Capital to asset ratios remain strong, averaging 9.6%, with 98% of banks well-capitalized and 2% adequately capitalized.

2.  Assets:  The 12 month average of classified assets was 27% of capital on December 31, 2008, up from 17% a year earlier.  Loans grew 5% in 2008 through September 30th, but loan loss reserved increased a bit to 1.2%, compared to a 1.77% national average.

3.  Earnings:  Only 16 of 391 banks did not show a profit for 2008, as of September 30th.  Asset return was 1.05%, the weakest since 1.07% in 2000, but still pretty good. 1.42% of all loans were 90 days past due or nonperforming, twice the 2006 level and the worst since 1992.

4.  Liquidity:  There is more reliance on noncore funding--sources sensitive to interest rates (high rate Cd's, borrowing, etc.) as opposed to core deposits.

Iowa Mortgage Loans

Data from the Mortgage Bankers Association shows 361,715 Iowa mortgage loans, as of the third quarter of 2008.

• 5.37% were delinquent, compared to 7.29% nationally.
• 3.49% were seriously delinquent (over 90 days or in foreclosure), compared to 5.17% nationally.
• 8.0% (26,000) were sub prime loans, compared to 13.5% nationally.
• 17% of sub prime loans are seriously delinquent. compared to 19.56% nationally.

Information from the Statehouse News  February 5, 2009 - www.iowahouse.org