First Quarter Report, 2022 Peer Data for New England Credit Unions
Attached is our compilation of financial information for New England credit unions. Click PEER REPORT to view the March 31, 2022 data. In the data, each New England state has its own tab, and there is a final tab that includes all New England credit unions.
The data includes several key credit quality, performance, liquidity, and capital adequacy ratios. We then break out certain ratios that we consider important in determining the financial performance and long-term viability of credit unions.
These key ratios are:
- Return on assets.
- Net interest margin.
- Ratio of operating expenses to gross income.
- Loans to shares.
From there, we rank the credit unions across each of these key ratios and determine an overall ranking based on the average of all these ratios.
On the “all New England” tab, we have included comparable ratios for all credit unions in the U.S. and comparable prior period ratios for New England credit unions.
Some quick observations on the results are as follows:
ROA for all U.S. credit unions took a slight dip in Q1 of 2022 but remains high, with an ROA of 87 basis points in Q1 2022 compared to an ROA of 106 basis points in Q4 of 2022. ROA for New England has been very consistent over the last five quarters and continues to lag the rest of the country with a ROA of 32 basis points in Q1 of 2022 up slightly compared to 30 basis points in Q4 of 2021.
Margins have increased in Q1 of 2022 for New England and the rest of the country. New England margins increased significantly from 2.52% in Q4 of 2021 up to 2.92% for Q1 of 2022. Nationally, margins are up from 2.71% in Q4 of 2021 to 3.11% for Q1 of 2022.
Credit quality remains very strong; the New England delinquent loans to total loans ratio improved again in Q1 2022 compared to Q4 of 2021, going down five basis points to .68%. This ratio for the U.S. is down seven basis points over the same period. Charge-offs continue to be close to zero in New England at 13 basis points in Q1 of 2022 compared to nine basis points for Q4 of 2021. On a national level, net charge-offs continue to be much higher at 28 basis points but also stable compared to prior quarters.
Capital and Liquidity
Credit unions in New England and on a national level have seen a loan to deposit ratio in a tight range for the last five quarters after trending down in 2020 due to the COVID-19 related run-up in deposits.
With the loans to deposits ratio remaining unchanged, capital ratios have also remained in a tight range for the last five quarters.
This information is publicly available, so it may be shared with others in your credit union, including board members. Please send us the email address of others that are interested in being added to our mailing list.
If you would like to discuss the information in further detail, we would be happy to do so.
A QUICK NOTE ON THE NEW ALLOWANCE FOR LOAN LOSSES REQUIREMENTS KNOWN AS CECL – Credit unions should have already started planning for adoption. Calendar year-end credit unions must adopt on January 1, 2023.
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