Wisconsin-based banks saw their net income increase in 2024, the first improvement in bottom-line profitability for the full year since 2021, according to data from the FDIC.
Net income across 159 institutions in the state rose 11.1% to $1.54 billion. Nearly 72% of banks saw earnings gains during the year, up from around 37% in 2023. Just six banks were unprofitable, down from nine banks in 2023.
Banks saw their total assets increase 4.6%, compared to an increase of 1.9% in 2023. Earning assets increased 4.8% for the year.
Total deposits were also up 5.1% to almost $129 billion, compared to growth of just 2% in 2023 and 1.4% in 2022. For the fourth quarter, deposits grew 2.6% compared to the end of the third.
“The fourth-quarter FDIC numbers show the year 2024 ended on a solid note with Wisconsin’s banks in a strong position,” said Rose Oswald Poels, president and CEO of the Wisconsin Bankers Association. “Residential real estate loans increased as the state’s housing market saw activity in the last two months of the year despite low inventory. Commercial lending also saw an increase while farm loan demand held steady as farmers work through commodity prices, weather challenges, and high operational costs. Wisconsin’s banks continue to meet the lending and deposit needs of their communities.”
The yield on earning assets was 5.66%, up 52 basis points from 2023. The increase was smaller than the 139-basis point increase in 2023.
The cost of funding earning assets was 2.44%, a 50-basis point increase over 2023.
As a result, net interest margin for the year was 3.22%, up 2 basis points from 2023.
Net interest income for the year was up 4.4% to $4.62 billion. Noninterest income increased 17.8% for the year to $3.18 billion.
Noninterest income for the year was 2.05% as a percentage of average assets, a 25-basis point increase from the previous year.
Noninterest expense for the year was 3.59% of average assets, a 20-basis point increase from the prior year.
As for where banks grew their assets, net loans and leases increased 4.4% year-over-year to $114.6 billion. That growth included a slight 0.15% increase in the fourth quarter compared to the third.
Residential real estate loans increased 15.5% for the year to $39 billion, including a 17.2% increase from the end of the third quarter.
Commercial and industrial loan growth was less robust with a 3.7% increase for the year to $18.5 billion, including a 0.55% increase since the end of the third quarter.
There was a year-over-year increase of 14.8% in the amount of assets in nonaccrual status, reaching $580 million. However, that figure was down 2.2% from the end of the third quarter.
