Wisconsin Banks Report Continued Loan Growth and Enhanced Profitability in Q3 2025
By Arthur Thomas, November 25, 2025
Wisconsin-based banks demonstrated robust financial performance in the third quarter of 2025, exhibiting sustained growth in loans and deposits alongside notable improvements in profitability metrics, according to recently released Federal Deposit Insurance Corporation (FDIC) data.
Loan and Deposit Growth
In Q3 2025, total net loans and leases for Wisconsin banks increased by 4.75% compared to the same quarter in 2024. Deposits also rose by a healthy 5.2% year-over-year, underscoring strong customer confidence and liquidity in the region’s banking sector.
Quarter-over-quarter comparisons show net loans and leases grew by 1.35%, while deposits increased by 2.06% relative to Q2 2025. Although loan growth exhibited a modest deceleration from previous quarters, it remained at levels higher than those seen in late 2024 and early 2025. Meanwhile, the deposit increase marked the strongest quarter-over-quarter expansion since the end of 2024. ### Profitability Improvements
Wisconsin banks also posted significant gains in profitability for the first three quarters of 2025. Aggregate net income across all state-based banks reached $1.59 billion, an 18.3% uptick from the comparable period last year.
Key profitability indicators reflected this positive trend:
- Net interest income increased by 14.5%.
- The net interest margin improved to 3.46%, a rise of 28 basis points compared to 2024.
- Yield on earning assets edged up by 7 basis points to 5.71%.
- Cost of funding earning assets declined by 21 basis points to 2.25%.
- Noninterest income as a percentage of average assets increased by 19 basis points to 2.28%.
- Noninterest expense rose modestly by 22 basis points to 3.78%.
Loan Portfolio Composition
An analysis from the Wisconsin Bankers Association highlighted shifts within specific loan categories:
- Commercial and industrial loans decreased slightly by 1.46% quarter-over-quarter to $19.3 billion but remained up 4.93% year-over-year.
- Residential real estate loans fell 6.63% from Q2 to $35.3 billion but showed a robust 15.05% increase compared to the previous year.
- Farm loans rose by 4.81% over the quarter to $5.45 billion, marking a 5.3% increase year-over-year.
Nonperforming assets, reflected in nonaccrual loan status, totaled $633 million—an increase of 0.28% from Q2 and 2.34% from the previous year.
Industry Outlook
Rose Oswald Poels, President and CEO of the Wisconsin Bankers Association, commented on the results:
“The third quarter FDIC numbers continue to highlight the strength of Wisconsin banks, which are well positioned to help their customers and communities heading into 2026. With inflation considerations still top of mind, Wisconsin consumers and business owners can continue to rely on their banks as a source of trusted financial partnership and a safe place to deposit their money.”
The data affirms that Wisconsin’s banking institutions are maintaining a solid foundation amid evolving economic conditions, supporting regional businesses and individuals alike.
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