Peer Data for New England Credit Unions: 2019 Q4
Attached is our compilation of financial information for New England credit unions. Click PEER REPORT to view the March 31, 2020 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, and capital adequacy ratios. We then break out certain ratios that we consider important in determining financial performance and long-term viability of credit unions. These key ratios are:
- Return on assets
- Net interest margin
- Ratio of 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. for 2020 and 2019, and the December 31, 2019 New England credit union information for comparison.
Some quick observations on the results are as follows:
New England credit union performance was negatively impacted by two items – 1) market value losses on marketable equity securities impacted investment yields (some credit unions had a negative yield on investments), ROA and the operating expense to income ratio and 2) allowance for loan losses build-up likely due to COVID-19 related anticipated loan losses which impacted the ROA. The average ROA was only eight basis points in 2020 compared to 43 in the Q4 2019. The national ratio for ROA also experienced a decline likely due to the same two factors going from 93 basis points in 2019 down to 52 basis points for the first quarter of 2020.
Credit quality remains very strong with the delinquent loans to total loans ratio at 1.02% and the net charge-off to total loans ratio at 0.30%. As mentioned above, we noted an allowance build-up likely due to COVID-19 with the ratio of the allowance to total loans going up from .72% as of December 31, 2019 to .81% as of March 31, 2020.
Capital and Liquidity
The data suggests that New England credit unions are in a position of strength going into the COVID-19 pandemic with an average capital ratio of 13.19% and a loan to share ratio of 67.23%.
This information is publicly available, so it may be shared with others in your credit union, including board members.
If you would like to discuss the information in further detail, we would be happy to assist.
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For more than two decades, our teams have worked with New England banks and credit unions.
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