Wisconsin banks experience ongoing loan growth and better profitability in the third quarter.

Wisconsin Banks Experience Loan Growth and Profitability in Q3

Wisconsin banks report a 4.75% increase in total net loans and leases, while deposits rose by 5.2% in the third quarter when compared to the same period in 2024, based on recent FDIC data. There was also a 1.35% growth in net loans and leases and a 2.06% uptick in deposits compared to the previous quarter. While the growth rate for loans has shown a slight slowdown from earlier in the year, the figures remain significantly stronger than what was seen in late 2024 and early 2025. Notably, deposits have experienced their highest quarter-over-quarter growth since late 2024.

Bank profitability metrics showed improvement during this quarter. Total net income for Wisconsin banks reached $1.59 billion in the first three quarters of 2025, marking an 18.3% increase over 2024. Additionally, net interest income rose by 14.5%, and the year-to-date net interest margin increased to 3.46%, which is 28 basis points higher than last year. Yields on income-earning assets went up by 7 basis points to 5.71%, while the cost of financing for those assets decreased by 21 basis points, landing at 2.25%. Furthermore, non-interest income as a percentage of average assets climbed 19 basis points to 2.28%, although non-interest expenses went up by 22 basis points to 3.78%.

Analyzing specific loan categories, the Wisconsin Bankers Association revealed some trends:

Commercial and industrial loans fell by 1.46% from the second quarter, totaling $19.3 billion but showed a 4.93% increase from the same period last year.

Residential real estate loans saw a decrease of 6.63% since the last quarter, now at $35.3 billion, but remained up by 15.05% from the previous year.

Agricultural loans increased to $5.45 billion, rising by 4.81% from the last quarter and 5.3% compared to last year.

The WBA noted that $633 million in total assets are in accrued status, reflecting a 0.28% rise from the second quarter and a 2.34% increase from 2024. Rose Oswald Pauls, president and CEO of the Wisconsin Bankers Association, expressed that “the third quarter FDIC numbers continue to highlight the strength of Wisconsin banks, which are well-positioned to support their customers and communities as we move into 2026.” She emphasized the need to consider inflation, reassuring Wisconsin consumers and business owners that banks remain a trusted source for financial partnerships and a secure place for their assets.