Iowa conditions sound; reg burden concerns bankers

Iowa banks — which generally didn't suffer the earnings trouble that banks in other parts of the country did during the last four years — are getting stronger, Superintendent of Banking James Schipper told 270 people gathered in downtown Des Moines April 26. The top concern for most of the state's bankers, he said, is growing regulatory burden..Schipper, who has been Iowa's top bank regulator for 15 months, hosted the 19th annual Day with the Superintendent at the Embassy Suites Hotel..After examinations, Iowa Division of Banking personnel conduct a survey. One of the questions asked is: "what concerns do you see over the next five years?"."Almost all say regulatory burden," Schipper said..Schipper said his own concern is the turnover that is imminent at the Iowa Division of Banking. As the regulatory responsibilities grow, the Division of Banking will increasingly be relying on younger, less-experienced examiners. "Replacing a 30-year examiner with an entry-level examiner is going to have impact," he said. Schipper said money has been added to his budget to train several new examiners, which are expected to be hired in the coming months as veteran examiners retire..Iowa has 93 banks rated one on the CAMELS scale, compared to 151 with that rating in 2001. The state has 174 two-rated banks; 25 three-rated banks; six four-rated banks and two five-rated banks. In general, Schipper said Iowa banks are growing stronger. "Fifteen months ago, we had 47 banks rated three, four or five; this week we have 30," he said..Iowa has 313 state chartered banks with $54.1 billion in assets, giving the average state chartered bank $179 million in assets. Most of the banks have less than $500 million in assets, with nine banks having more than $1 billion in assets, and nine more having assets between $500 million and $1 billion..Only two Iowa banks have failed since 2008, and only 43 Iowa banks have failed since 1982, with 34 failing between 1985 and 1988 at the heart of the agricultural crisis. "We've been fortunate," Schipper said. "That's attributable to you," he told the bankers.