If first quarter data are predictive of future performance, 2021 will be among the most challenging years in recent memory for mutual management teams and directors. Balance sheet management strategies are confronted by the combined headwinds of historically low interest rates, double-digit deposit growth (fueled by government stimulus payments) and declining loan balances (with prepayments ranging from 30-50 percent at many mutuals).

First quarter ’21 data show that loan totals (annualized) declined across the board for mutuals in Ohio (-2.6 percent) and in the Midwest (-1.3 percent). Nationwide, mutuals eked out modest growth of less than one percent for the quarter. Deposits surged during the first quarter, increasing at an annualized rate of more than 15 percent for mutuals in Ohio, the Midwest and Nation. [See Table 3.1 for balance sheet data.]

ROAA’s during the quarter ranged from 0.35 percent (Ohio), to 0.40 percent (Midwest) and 0.55 percent (Nation). The nexus trend of asset size and profitability continues unabated as mutuals with total assets exceeding $500 million generally outperforming those with less than $100 million by as much as 40-70 basis points. [See Table 3.2 for profitability metrics.]

For a more comprehensive view of first quarter 2021 data, see the attached links for detailed balance sheet, income, expense and other performance metrics. If you would like a customized report for your mutual institution comparing your results with regional and national peers, contact: Paul Simoff at psimoff@probank.com.