Missouri Banks

Missouri banks posted 1.48% return on assets in Q1 2026, up 14 basis points quarter-over-quarter from 1.33% in Q4 2025 and up 22 basis points year-over-year from 1.25% in Q1 2025—the highest ROA in the series shown and 28 basis points above the national benchmark of 1.20%. The improvement is accelerating modestly: the QoQ gain of 14 basis points is smaller than the YoY gain of 22 basis points, but the sequential quarter showed continued expansion rather than a plateau. The profitability advantage over the national average is stable quarter-over-quarter, suggesting durable structural factors rather than transient rate-driven tailwinds.

Two forces drove the ROA expansion. First, net interest margin widened 6 basis points quarter-over-quarter to 4.02% (from 3.96% in Q4 2025) and 26 basis points year-over-year (from 3.76% in Q1 2025), now 20 basis points above the national 3.82%. The QoQ pace of NIM expansion (6 basis points) is slower than the YoY pace (26 basis points), indicating the margin-widening trend is decelerating but not reversing. Second, the efficiency ratio compressed 149 basis points quarter-over-quarter to 59.46% (from 60.95% in Q4 2025) and 333 basis points year-over-year (from 62.79% in Q1 2025), now 468 basis points below the national 64.14%. The efficiency improvement is accelerating: the QoQ compression of 149 basis points is smaller than the YoY compression of 333 basis points, but the sequential quarter showed continued operating-leverage gains. The combination of widening NIM and compressing efficiency mechanically lifted ROA, with the efficiency contribution dominating: a 333-basis-point efficiency improvement over four quarters translates to roughly 15-20 basis points of ROA lift, consistent with the observed 22-basis-point YoY ROA gain.

Specialization patterns show a 160-basis-point ROA spread between Credit Card specialists at 2.26% and Mortgage specialists at 0.66%, with NIM divergence the primary driver: Credit Card NIM at 13.80% sits 1,061 basis points above the state's 4.02% aggregate, while Mortgage NIM at 3.19% sits 83 basis points below. Agricultural specialists at 1.37% ROA and 3.84% NIM outperformed Commercial specialists at 1.20% ROA and 3.92% NIM on profitability despite slightly lower margin, reflecting Agricultural banks' 59.51% efficiency ratio (445 basis points below Commercial banks' 64.09%). Mortgage specialists posted the weakest efficiency at 76.96%, 1,281 basis points above the national 64.14% and 1,750 basis points above Missouri's 59.46%, dragging Mortgage ROA to the bottom of the specialization stack despite stable credit quality (Mortgage delinquency at 0.57% matched Consumer specialists and sat below the state's 0.63%).

Missouri banks posted 5.36% year-over-year asset growth in Q1 2026, decelerating 603 basis points quarter-over-quarter from 5.70% in Q4 2025 and 652 basis points year-over-year from 5.73% in Q1 2025. The deceleration is consistent across both timeframes, indicating a sustained slowdown rather than a one-quarter anomaly. Asset growth remains 21 basis points above the national benchmark of 5.15%, but the gap is narrowing: Missouri's growth advantage over the national average compressed from a wider spread in prior quarters (implied by the deceleration magnitude) to the current 21-basis-point margin.

Loan growth at 7.56% year-over-year outpaced asset growth, decelerating only 36 basis points quarter-over-quarter (from 7.59% in Q4 2025) but accelerating 339 basis points year-over-year (from 7.32% in Q1 2025). The YoY acceleration in loan growth paired with YoY deceleration in asset growth indicates loan portfolios are growing faster than total balance sheets, mechanically increasing the loan-to-asset ratio. Deposit growth at 5.15% year-over-year decelerated sharply: 1,027 basis points quarter-over-quarter (from 5.74% in Q4 2025) and 1,454 basis points year-over-year (from 6.02% in Q1 2025). The deposit-growth deceleration is an order of magnitude larger than the loan-growth deceleration, creating the mechanical compression in the loan-to-deposit ratio observed in the engagement section (LDR down 69 basis points QoQ despite loan growth outpacing deposit growth YoY). The deposit slowdown is the primary driver of the asset-growth deceleration: deposits typically represent 85-90% of bank balance sheets, so a 1,454-basis-point YoY deceleration in deposit growth mechanically drags asset growth downward even as loan growth accelerates.

The growth gradient across Missouri's banking universe is not stratified by tier in the data provided, but the state's 5.36% asset growth sits 21 basis points above the national 5.15%, a narrower gap than the loan-growth advantage of 136 basis points (Missouri 7.56% versus national 6.20%) or the deposit-growth advantage of 13 basis points (Missouri 5.15% versus national 5.02%). The compression suggests Missouri banks are growing loans faster than the national peer set but accumulating non-deposit liabilities or equity at a slower pace, mechanically dampening the asset-growth advantage. If deposit growth continues to decelerate at the current quarterly pace (1,027 basis points QoQ in the series shown), asset growth will fall below the national average within two quarters unless loan growth reaccelerates or non-deposit funding sources expand.

Missouri banks' loan delinquency ratio stood at 0.63% in Q1 2026, down 5 basis points quarter-over-quarter from 0.68% in Q4 2025 but up 10 basis points year-over-year from 0.53% in Q1 2025. The quarter-over-quarter improvement marks the first sequential decline in the series shown, while the year-over-year increase reflects a gradual normalization from historically low pandemic-era levels. Delinquency now sits 7 basis points below the national benchmark of 0.70%, indicating Missouri banks maintain modestly stronger credit quality than the broader FDIC-insured universe. The QoQ improvement of 5 basis points is smaller than the YoY deterioration of 10 basis points, suggesting the credit-quality trajectory is stabilizing rather than reversing.

The nonperforming-asset ratio stood at 0.52% in Q1 2026, stable quarter-over-quarter (down only 4 basis points from 0.56% in Q4 2025) and up 8 basis points year-over-year (from 0.43% in Q1 2025), now 1 basis point above the national 0.51%. The NPA ratio's YoY increase is consistent with the delinquency trend, reflecting gradual normalization from pandemic-era lows. Tier 1 capital stood at 13.29%, stable quarter-over-quarter (up only 2 basis points from 13.27% in Q4 2025) and up 20 basis points year-over-year (from 13.09% in Q1 2025), now 97 basis points below the national 14.26%. The capital gap is stable quarter-over-quarter, indicating Missouri banks maintain a structurally lower capital buffer than the national peer set—likely reflecting portfolio-mix differences (higher loan-to-deposit ratios mechanically compress risk-based capital ratios) or ownership-structure patterns (mutual savings institutions, which represent 5.4% of Missouri's 196 banks, typically hold higher capital ratios than shareholder-owned commercial banks).

Specialization patterns show Credit Card specialists at 2.57% delinquency, 194 basis points above Missouri's 0.63% aggregate and consistent with the higher-risk, higher-yield portfolio mix reflected in Credit Card NIM at 13.80%. Agricultural specialists at 0.63% delinquency matched the state aggregate despite commodity-cycle exposure, while Mortgage and Consumer specialists both posted 0.57% delinquency, 6 basis points below the state average. The delinquency gradient across specializations is stable in the data shown, with no evidence of widening or narrowing spreads quarter-over-quarter. If delinquency continues to improve at the current quarterly pace (5 basis points QoQ in the series shown), Missouri banks will return to the year-ago 0.53% level within two quarters, assuming no portfolio-mix shifts or external credit shocks.

Missouri banks' loan-to-deposit ratio stood at 80.33% in Q1 2026, down 69 basis points quarter-over-quarter from 81.01% in Q4 2025 but up 206 basis points year-over-year from 78.26% in Q1 2025. The quarter-over-quarter decline marks the first sequential pullback in the series shown, while the year-over-year expansion reflects sustained loan-growth momentum outpacing deposit accumulation. The LDR now sits 395 basis points above the national benchmark of 76.38%, indicating Missouri banks are deploying a larger share of their deposit base into lending compared to the broader FDIC-insured universe.

The QoQ decline in LDR was mechanically driven by deposit growth outpacing loan growth on a sequential basis: deposit growth at 5.15% YoY decelerated 1,027 basis points quarter-over-quarter (from 5.74% in Q4 2025), while loan growth at 7.56% YoY decelerated only 36 basis points (from 7.59% in Q4 2025). The modest sequential slowdown in loan growth paired with sharper deposit-growth deceleration compressed the ratio. Year-over-year, the opposite dynamic prevailed: loan growth accelerated 339 basis points (from 7.32% in Q1 2025) while deposit growth decelerated 1,454 basis points (from 6.02% in Q1 2025), mechanically tightening the LDR over the four-quarter span. Noninterest-bearing deposit share fell to 20.44%, down 34 basis points QoQ and 18 basis points YoY, now 115 basis points below the national 21.60%—consistent with sustained repricing pressure on deposit mix. Net interest income as a percentage of revenue stood at 0.29%, stable year-over-year (up only 2 basis points from 0.27%) but down 78 basis points quarter-over-quarter from 1.07%, reflecting seasonal or compositional shifts in noninterest revenue.

The LDR gradient across Missouri's banking universe is not stratified by tier in the data provided, but the state's 80.33% aggregate sits above the national 76.38%, suggesting Missouri banks maintain a more lending-intensive balance-sheet posture than the national peer set. The 395-basis-point gap is stable quarter-over-quarter, indicating the state's structural liquidity posture is durable rather than cyclical. If loan growth continues to decelerate modestly (36 basis points QoQ in the series shown) while deposit growth decelerates more sharply (1,027 basis points QoQ), the LDR will compress further toward the national average over the next two quarters.