Nebraska Banks

Return on assets rose to 1.34% in Q1 2026, up 13 bps from 1.20% in Q4 2025 and up 22 bps from 1.11% a year earlier—the strongest profitability in the series shown for NE banks. QoQ the gain was 13 bps; YoY 22 bps. The expansion is decelerating but remains positive. The current 1.34% sits 14 bps above the national benchmark of 1.20%, marking NE banks as above-average performers on this core profitability measure.

Two drivers account for the ROA improvement. First, the efficiency ratio fell 147 bps QoQ and 320 bps YoY to 60.11%, now 403 bps below the national 64.14%. The efficiency improvement is broad-based: Agricultural specialists posted 59.51% (-3.45 pp YoY), International specialists 57.89% (-2.15 pp YoY), and Commercial banks 64.09% (-2.91 pp YoY), per the specialization-movers table. Mortgage specialists are the outlier at 76.96%, 1,281 bps above national and rising. Second, net interest margin widened 23 bps YoY to 3.79%, though QoQ the move was only 5 bps, signaling deceleration. The current 3.79% sits just 3 bps below the national 3.82%, a near-parity position. Credit Card specialists command outsized NIM at 13.80% (999 bps above national), but represent only 0.2% of NE banks; the aggregate is driven by Commercial (56.1% of cohort, 3.92% NIM) and Agricultural (21.3% of cohort, 3.84% NIM) specialists.

Specialization gradients are wide on efficiency but narrow on NIM. The efficiency spread between Credit Card specialists at 54.43% and Mortgage specialists at 76.96% is 2,253 bps—and the gap is widening, per the YoY movers table showing Mortgage efficiency deteriorating (-5.43 pp) while Agricultural and Commercial improved. On NIM, the spread between Credit Card at 13.80% and International at 2.54% is 1,126 bps, but the Credit Card cohort is negligible (10 banks). Among the dominant specializations, Commercial at 3.92% and Agricultural at 3.84% cluster near the national 3.82%. If the efficiency ratio continues its current YoY pace of improvement (-320 bps), NE banks will reach the mid-50s range within three quarters, a level associated with high-performing regional cohorts.

Asset growth reached 5.43% YoY in Q1 2026, accelerating sharply from 5.21% in Q4 2025 (+4.15 pp QoQ) and from 4.84% a year earlier (+12.08 pp YoY). The current 5.43% sits 27 bps above the national benchmark of 5.15%, marking NE banks as modestly above-average on balance-sheet expansion. The YoY acceleration of 12.08 pp is the most significant move in the growth metrics shown, signaling a sustained upward trajectory in asset accumulation.

Two forces shaped the growth picture. Deposit growth accelerated to 5.29% YoY from 5.10% in Q4 2025 (+3.72 pp QoQ), driving the asset-growth acceleration. YoY, however, deposit growth decelerated sharply from 6.16% a year earlier (-14.21 pp), indicating the current 5.29% pace is well below the prior-year baseline. Loan growth decelerated to 5.79% YoY from 5.93% in Q4 2025 (-2.31 pp QoQ) and from 5.88% a year earlier (-1.55 pp YoY). The current 5.79% sits 41 bps below the national 6.20%, the only growth metric where NE banks trail the national benchmark. The mechanical result: deposit inflows are driving asset growth in the current quarter, while loan origination is slowing both QoQ and YoY.

The growth profile is mixed. Asset growth is accelerating on both timeframes, a positive signal for balance-sheet expansion. Deposit growth is accelerating QoQ but decelerating YoY, suggesting the current quarter's 5.29% pace is a recovery from a weak Q4 2025 but still below the robust 6.16% pace of a year earlier. Loan growth is decelerating on both timeframes, falling 231 bps QoQ and 155 bps YoY. The spread between deposit growth at 5.29% and loan growth at 5.79% is -50 bps (loans growing faster), but the QoQ momentum favors deposits (+3.72 pp) over loans (-2.31 pp). If loan growth continues to decelerate at the current QoQ pace, it will converge to the deposit-growth rate within two quarters, stabilizing the loan-to-deposit ratio near current levels.

The delinquency rate held at 0.31% in Q1 2026, stable from 0.31% in Q4 2025 (+1 bp QoQ) and down modestly from 0.34% a year earlier (-3 bps YoY). The current 0.31% sits 38 bps below the national benchmark of 0.70%, marking NE banks as significantly below-average on loan stress. The stability across both timeframes—flat QoQ, near-flat YoY—signals credit quality is neither improving nor deteriorating, a benign outcome in the current environment.

Two measures confirm the stable risk posture. The nonperforming-asset ratio held at 0.26% in Q1 2026, stable from 0.26% in Q4 2025 (+0 bps QoQ) and down 1 bp from 0.27% a year earlier. The current 0.26% sits 25 bps below the national 0.51%, a wide gap indicating NE banks carry fewer problem assets relative to total assets than the broader FDIC-insured universe. Tier 1 capital rose to 13.24% from 13.11% in Q4 2025 (+13 bps QoQ) and from 12.94% a year earlier (+30 bps YoY), marking gradual capital accumulation. The current 13.24% sits 102 bps below the national 14.26%, the only risk metric where NE banks trail the national benchmark. The capital gap is persistent but not widening—the YoY improvement of 30 bps suggests NE banks are building capital at a pace similar to the national cohort.

Specialization gradients on delinquency are modest. Credit Card specialists posted 2.57% delinquency, 187 bps above the national 0.70%, but represent only 10 banks (0.2% of cohort). Among the dominant specializations, Commercial banks posted 0.72% (2 bps above national), Agricultural 0.63% (7 bps below), and Mortgage 0.57% (13 bps below). The spread between Credit Card at 2.57% and Mortgage at 0.57% is 200 bps, but the Credit Card cohort is negligible. The risk profile is stable: delinquency and NPA ratios are flat and well below national benchmarks, while Tier 1 capital is rising gradually. If capital accumulation continues at the current YoY pace of 30 bps, NE banks will close the 102 bp gap to the national benchmark within four quarters.

The loan-to-deposit ratio fell to 79.63% in Q1 2026, down 323 bps from 82.86% in Q4 2025 but up 32 bps from 79.31% a year earlier. The sharp QoQ decline marks a shift in funding posture—deposit growth outpaced loan growth in the quarter. YoY the ratio remains modestly elevated, suggesting NE banks maintain a lending-oriented balance sheet relative to the prior-year baseline. The current 79.63% sits 326 bps above the national benchmark of 76.38%, indicating NE banks deploy a higher share of deposits into loans than the broader FDIC-insured universe.

Two forces drove the QoQ compression. Deposit growth accelerated to 5.29% YoY from 5.10% the prior quarter (+3.72 pp QoQ), while loan growth decelerated to 5.79% YoY from 5.93% (-2.31 pp QoQ). The mechanical result: deposits grew faster than loans in the quarter, reducing the LDR. YoY the picture inverts—deposit growth decelerated sharply (-14.21 pp to 5.29%) while loan growth decelerated modestly (-1.55 pp to 5.79%), allowing the LDR to edge up 32 bps. Noninterest-bearing deposit share fell 25 bps QoQ and 27 bps YoY to 17.92%, now 368 bps below the national 21.60%. The NIB erosion is gradual but persistent across both timeframes. Noninterest income as a percent of revenue fell 35 bps QoQ to 0.12%, though YoY the metric is stable (+0 bps).

NE banks' LDR at 79.63% reflects a more loan-intensive posture than the national average, but the QoQ compression signals a quarter of deposit inflows outpacing loan origination. The NIB share at 17.92% trails the national 21.60% by a wide margin, consistent with regional deposit-mix patterns where interest-bearing accounts dominate. If deposit growth continues to outpace loan growth at the QoQ pace shown, the LDR will converge toward the national 76.38% within two quarters.