Minnesota community banks hit five-year highs in 3Q NIM, ROAA

The 293 Minnesota community banks on the QwickAnalytics Community Bank Index had a good third quarter, marking a number of five-year records.

Net interest margin at the end of the third quarter hit 3.96 percent, up 10 basis points from 2017 and the highest NIM in the last five years. (Nationwide, NIM was 3.45 percent for the quarter, as reported by the FDIC).

Median return on average assets hit 1.15 percent for the third quarter, up from 0.76 percent in third quarter 2017, QwickAnalytics reports. The 2018 figure also is a five-year high. Net charge-offs as a percentage of average loans dropped to 0, down from last year’s 0.03 percent and the lowest since before 2013.

Statewide, the FDIC reports Minnesota commercial banks earned $239 million in the third quarter, $52 million more than a year ago. Banks with fewer than $100 million in assets earned $20 million in third quarter 2018, the same as they earned third quarter 2017. The FDIC reports that for all Minnesota commercial banks in the third quarter, NIM was 3.93 percent, up from 3.80 a year ago, and charge-offs decreased to 0.07 percent from 0.10 percent in 2017.

Nationwide, FDIC-insured banks netted $68 billion in income during the third quarter while the 5,044 institutions defined by the FDIC as community banks earned $6.2 billion in that time.

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