Impact of Corona Virus Economy Emerges in 2Q Mutual Data

As noted in last quarter’s mutual peer data report, the impact of the economic shutdown was unlikely to be revealed until at least the second or third quarter financial reports of mutuals throughout the nation, as well as in Ohio and the Midwest.  Balance sheets of mutuals universally ballooned during the second quarter of 2020 as deposits and total assets increased at double digit rates (YTD).  Mutuals nationwide and in Ohio experienced healthy increases in total loans while Midwest mutuals grew loans at more modest levels (YTD).  Through the first quarter of 2020, deposits grew within a range of 3-5 percent while loans increased at a rate of 1-2 percent across all three regions.  The chart below highlights the most recently available data.

Balance Sheet Growth Metrics – Q2 2020 (% YTD)

Region Assets Deposits Loans
Nationwide 15.3 17.0 6.5
Midwest 12.3 12.0 2.2
Ohio 12.4 13.9 8.3

Net income for the quarter, measured by return on average assets, increased modestly within each of the regions.  Gain on sale totals for Ohio mutuals (as a percentage of average assets) more than doubled from first quarter results, increasing to 0.22 percent from 0.10 percent.

Median Return on Average Assets

Region Median ROAA YE 2019 Median ROAA Q1 2020 Median ROAA Q2 2020
Nationwide 0.55 0.36 0.39
Midwest 0.40 0.36 0.38
Ohio 0.41 0.35 0.37

 

The impact of the economic slowdown does not appear to be fully reflected in second quarter asset quality metrics.  Nonperforming loans to total loans increased in all three regions as noted in the following chart.  However, loan loss reserve totals were virtually unchanged as were charge-off’s (not shown below) compared with first quarter results.

Asset Quality Metrics

NPLs/Total Loan

LLR/Total Loans

Region Q2 2020 Q1 2020 Q2 2020 Q1 2020
Nationwide 0.59 0.53 0.87 0.86
Midwest 0.60 0.58 0.78 0.78
Ohio 1.20 1.16 0.86 0.89

 

See the peer data tables for additional financial performance details.  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 - JUNE 30, 2020