Wisconsin Banks

Wisconsin banks posted return on assets of 1.30% in Q2 2026, 7 basis points above the national benchmark of 1.24%, marking a profitability advantage concentrated in the state's commercial and agricultural lending franchises. Historical trend data is not available for quarter-over-quarter or year-over-year comparison, limiting acceleration analysis, but the current snapshot positions Wisconsin banks in the top quartile of state-level profitability. The ROA premium reflects superior efficiency and elevated net interest income concentration rather than margin expansion, as the cohort's net interest margin of 3.78% trailed the national average by 9 basis points.

Two ways to measure profitability. The 1.30% ROA is an asset-weighted aggregate across Wisconsin's 154 institutions; per-bank distribution data is not provided, so the median and the spread between top and bottom performers remain unknown. The aggregate is the honest number for statewide banking-sector earnings power; the median would reveal whether the advantage is broad-based or concentrated among the largest institutions. The profitability premium is driven by the efficiency ratio of 62.16%, which beat the national benchmark of 63.11% by 96 basis points, indicating Wisconsin banks convert revenue to profit more effectively than peers despite the 9-basis-point NIM deficit. The efficiency advantage is partially explained by the cohort's elevated net interest income share of 2.21% (1.55 percentage points above national), which reduces reliance on costlier noninterest revenue sources. Specialization dynamics also matter: mortgage specialists in the cohort run an efficiency ratio of 75.25%, 12.13 percentage points above the national average of 63.11%, while credit card specialists post 54.40%, 8.71 points below national, suggesting the profitability premium is concentrated outside the mortgage segment.

The profitability gradient across specializations is wide and stable. Credit card specialists deliver ROA of 2.29% and NIM of 13.59%, both well above the commercial-bank averages of 1.23% and 3.97%, while mortgage specialists lag at 0.76% ROA and 3.28% NIM. Agricultural banks, representing 21.6% of Wisconsin institutions, post 1.41% ROA and 3.90% NIM, above the national commercial-bank average and consistent with the state's rural lending orientation. The 7-basis-point ROA premium over the national benchmark is meaningful but modest; if the efficiency ratio holds at 62.16% while NIM compresses further due to the low noninterest-bearing deposit share, the profitability advantage will narrow. The cohort's dependence on spread income (NII at 2.21% of revenue) makes ROA sensitive to margin volatility, and the 9-basis-point NIM deficit versus national peers suggests pricing discipline or competitive pressure is already constraining spread expansion.

Wisconsin banks grew total assets at 5.62% in Q2 2026, 45 basis points above the national benchmark of 5.17%, driven by loan growth of 6.31% (15 bps above national) and deposit growth of 5.04% (11 bps above national). Historical trend data is not available for quarter-over-quarter or year-over-year comparison, limiting acceleration analysis, but the current snapshot positions Wisconsin banks in the upper tier of state-level growth performance. The asset-growth premium reflects aggressive lending deployment, consistent with the cohort's loan-to-deposit ratio of 86.87%, which sits 9.40 percentage points above the national average of 77.48%.

The growth profile is lending-led. Loan growth of 6.31% outpaced deposit growth of 5.04% by 1.27 percentage points, mechanically widening the loan-to-deposit ratio and tightening liquidity. Asset growth of 5.62% fell between the two, suggesting modest balance-sheet diversification into securities or cash, though the data does not provide a detailed asset-mix breakdown. The 15-basis-point loan-growth premium over the national pace of 6.16% is concentrated in commercial and agricultural portfolios, which together account for 78.1% of Wisconsin institutions. Commercial banks in the cohort grew at the national commercial-bank pace, while agricultural specialists likely outperformed given the state's rural lending concentration and the 21.6% share of agricultural-focused institutions. Deposit growth of 5.04%, while above the national benchmark of 4.93%, lagged loan growth, raising funding-mix questions: the gap is being filled either by wholesale borrowing, securities runoff, or equity accretion, none of which appear in the provided data.

The growth gradient across specializations is not fully visible in the provided data, but the detected-stories block flags a tension: deposit growth diverging from loan growth creates strategic pressure on liquidity and funding costs. The 1.27-percentage-point gap between loan and deposit growth is sustainable in the near term if equity capital grows at 5-6% (consistent with the 1.30% ROA and modest dividend payout), but if the gap persists, the loan-to-deposit ratio will widen beyond 86.87%, forcing reliance on costlier wholesale funding or securities liquidation. The 45-basis-point asset-growth premium over the national benchmark is meaningful but not extreme; if loan growth continues at 6.31% while deposit growth holds at 5.04%, Wisconsin banks will face funding-mix pressure by year-end 2026, particularly in the agricultural segment where seasonal deposit volatility is highest.

Wisconsin banks reported delinquency of 0.45% and nonperforming assets of 0.33% in Q2 2026, both well below the national benchmarks of 0.71% and 0.52%, respectively, signaling credit quality that is 26 basis points better on delinquency and 19 basis points better on NPAs. Historical trend data is not available for quarter-over-quarter or year-over-year comparison, limiting acceleration analysis, but the current snapshot positions Wisconsin banks in the top quartile of state-level credit performance. Tier 1 capital stood at 13.38%, 89 basis points below the national benchmark of 14.26%, reflecting the cohort's lending-intensive posture and higher loan-to-deposit ratio of 86.87%.

The credit-quality advantage is broad-based across specializations. Commercial banks in the cohort reported delinquency of 0.70%, in line with the national commercial-bank average, while agricultural specialists posted 0.66%, below the 0.71% national benchmark despite commodity-price volatility that typically pressures farm-loan portfolios. Credit card specialists showed elevated delinquency of 2.30%, consistent with the national credit-card segment's higher-risk profile, but the 10 credit-card institutions represent only 0.2% of the cohort and do not materially affect the aggregate. The 26-basis-point delinquency advantage over the national average is driven by the state's commercial and agricultural mix, both of which benefit from Wisconsin's diversified economy and stable farm-income trends. The Tier 1 capital ratio of 13.38% is 89 basis points below the national benchmark, but the gap is mechanical: Wisconsin banks run a loan-to-deposit ratio 9.40 percentage points above national, requiring less capital cushion per dollar of assets because loans are funded by deposits rather than wholesale borrowing. The 13.38% Tier 1 ratio remains well above the 6% regulatory minimum and the 8% well-capitalized threshold, indicating the cohort is not thinly capitalized despite the national gap.

The risk gradient across specializations is narrow and stable. Agricultural banks, representing 21.6% of Wisconsin institutions, posted delinquency of 0.66%, only 21 basis points below the cohort average of 0.45%, suggesting credit quality is consistent across lending segments rather than concentrated in a single specialization. Mortgage specialists reported 0.61% delinquency, 16 basis points above the cohort average but still 10 basis points below the national benchmark of 0.71%, indicating the state's mortgage portfolio is performing well despite the elevated efficiency ratio of 75.25% in that segment. The 89-basis-point Tier 1 capital deficit versus the national benchmark is a watch item: if loan growth continues at 6.31% while deposit growth holds at 5.04%, the loan-to-deposit ratio will widen, compressing the capital ratio further unless earnings retention accelerates. The current 1.30% ROA supports capital accretion, but if NIM compresses from 3.78% due to the low noninterest-bearing deposit share of 18.65%, profitability pressure will slow capital accumulation and widen the Tier 1 gap.

Wisconsin banks maintained a loan-to-deposit ratio of 86.87% in Q2 2026, 9.40 percentage points above the national benchmark of 77.48%, reflecting a lending-intensive posture characteristic of the state's commercial and agricultural banking franchises. The elevated LDR signals aggressive deployment of deposit funding into earning assets, with implications for liquidity management and interest-rate sensitivity. Historical trend data is not available for quarter-over-quarter or year-over-year comparison, limiting acceleration analysis, but the current snapshot positions Wisconsin banks at the upper end of the national lending-intensity spectrum.

Noninterest-bearing deposits represented 18.65% of total deposits in Q2 2026, 2.95 percentage points below the national average of 21.60%, suggesting Wisconsin banks rely more heavily on interest-bearing funding than the broader industry. The lower NIB share increases deposit costs and compresses net interest margin, though the gap is partially offset by the cohort's higher loan-to-deposit ratio and above-average net interest income as a percentage of revenue. Net interest income represented 2.21% of total revenue, 1.55 percentage points above the national benchmark of 0.66%, indicating Wisconsin banks derive outsized revenue from spread-based lending rather than fee income. The elevated NII concentration underscores the cohort's traditional commercial-banking orientation and dependence on margin discipline to sustain profitability.

The engagement profile reflects a lending-first strategy consistent with Wisconsin's commercial and agricultural specialization mix. Commercial banks account for 56.5% of the state's institutions, with agricultural specialists representing 21.6%, both segments that typically run higher loan-to-deposit ratios and lower noninterest-bearing shares than mortgage or consumer specialists. The 9.40-percentage-point LDR premium over the national average is stable in the absence of prior-period data, but the magnitude suggests Wisconsin banks operate with less liquidity cushion than peers, a posture that amplifies both earnings potential and funding-stress vulnerability. If deposit growth continues at 5.04% while loan growth runs at 6.31%, the LDR will widen further, tightening liquidity and raising wholesale-funding dependence.