Net Incomes Decline for Mutuals Nationally During First Quarter 2020

First quarter 2020 mutual financial performance data presents a new chapter in the evaluation of peer metrics for mutual institutions throughout the U.S.  The closing down of entire sectors of the nation’s economy beginning in February, unprecedented spikes in unemployment, an influx of PPP loans impacting balance sheets and many more after-effects (some of which have yet to be revealed) certainly had a profound impact on first quarter results.

Normalized performance metrics are unlikely to re-emerge until the third or fourth quarter of 2020, if not later into 2021.  With all this as a backdrop, following are a few noteworthy results for the first quarter of 2020 for mutuals in Ohio, the Midwest and U.S.

Net income, as measured by the median return on average assets, for mutuals across the U.S., Midwest and Ohio mirrored each other at approximately 0.35 percent.  The closely tracking ROAA’s geographically is a departure from more recent trends where mutuals nationally generally earned 10-15 basis points more than counterparts in the Midwest and Ohio.  Moreover, the median ROAA’s for mutuals in each geographic region declined from YE 2019 totals by as much as 19 basis points (for mutuals nationally).  The chart below compares the median ROAA for mutuals nationally, in the Midwest and Ohio for YE 2019 and first quarter of 2020.

Region                                Median ROAA YE 2019                    Median ROAA Q1 2020

Nationwide                                        0.55                                                        0.36

Midwest                                             0.40                                                        0.36

Ohio                                                   0.41                                                         0.35

Overall balance sheet growth of approximately five percent for mutuals in all three geographically regions during the first quarter were buoyed by overall increased in deposits ranging from 3-5 percent.  Loans increased for mutuals nationally by 2.1 percent compared with 1.5 percent for mutuals headquartered in the Midwest and 0.8 percent for Ohio-based mutuals.  Additional data are provided in the comprehensive first quarter report.  For a complementary customized report comparing your institution’s results with those of mutual peers, contact Paul Simoff, senior consultant, psimoff@probank.com.

 

MUTUAL RANKING - MARCH 2020