Survey by Des Moines Register shows several Northeast Iowa banks are having problems with "nonperforming" loans

A survey by the Des Moines Register has shown than more than a third of Iowa's banks, 128 out of 367, had 2 percent or more of their loans listed as "nonperforming" as of December 31st, 2009. The newspaper studied figures released by the Federal Deposit Insurance Corporation.

"Nonperforming loans" are loans 90 days or more past due. Banks normally try to keep such loans to around 1 percent of their total loans, or at least less than 2 percent, experts say.

According to the newspaper's website, the Northeast Iowa bank with the highest percentage of nonperforming loans at this time is Security State Bank of New Hampton, which also has offices in Calmar and Ossian. 5.54 percent of its loans are listed as in default. Citizens State Bank of Decorah, Waukon and Postville had 7.18 percent of its loans in default as of June 30th, 2009, but the bank was sold to Fidelity Bank & Trust, which now lists 2.4 percent of its loans in default. The State Bank of Lawler says 4.19 percent of its loans are in default as of December 31st, while Northeast Security Bank, with an office in Decorah, says 2.22 percent of its loans are in default.

Banks with non-performing loan rates under two percent are Farmers & Merchants Savings Bank of Waukon and Decorah, with 1.85 percent nonperforming; Decorah Bank & Trust, with 1.15 percent nonperforming; Viking State Bank & Trust, with 0.98 percent nonperforming; and Citizens Savings Bank of Spillville, with 0.93 percent nonperforming. Bank of the West and Marine Credit Union, which have offices in Decorah, are headquartered out of state and did not file Iowa reports.

While several financial institutions have percentages of nonperforming loans above 2 percent, they also have large net assets, so they have funds to use even if some of the loans default. The FDIC report says Security State Bank has $171 million in assets; Fidelity Bank & Trust has $403 million in assets; State Bank of Lawler has $201 million in assets; and Northeast Security Bank has $113 million in assets.

FDIC reports by 367 banks in Iowa can be found at www.desmoinesregister.com/bankperformance.