Third Quarter Report, 2023

Below is our summary of financial data for New England credit unions. 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.
• Yield on loans less cost of funds.
• Ratio of operating expenses to gross income.
• Loans to shares.

From there, we rank the credit unions across each of these key ratios as well as total assets 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:

Performance

ROA for all U.S. credit unions remains high with an ROA of 76 basis points in Q3 2023, decreasing for the third consecutive quarter. In contrast, ROA for New England remained flat at 73 basis points after increasing for four consecutive quarters.

Credit Quality

Credit quality remains very strong, however are higher than they’ve been over the past two years; the New England delinquent loans to total loans ratio increased 7 basis points to .90% while this ratio for the U.S. increased 4 basis points over the past quarter to .72%. Chargeoffs, however were nearly unchanged compared to Q2 2023 in New England and for all U.S. credit unions, with annualized rates of .29% and .55%, respectively.

Capital and Liquidity

Credit unions in New England and on a national level have seen a loan to share ratio in a tight range for the last several quarters after trending downward in 2020 due to the COVID-19 related run-up in deposits.

The loans to shares ratio increased for New England Credit Unions from 67% in Q2 2023 to 69% in Q3 2023, however on a national level, where the ratio has been significantly higher, the loans to shares increased from 77% in Q2 2023 to 85% in Q3 2023. Capital ratios have also remained in a tight range for the last two years, with all U.S. credit unions having a capital ratio of 11%, and New England credit unions with 12.4%.

Click PEER REPORT to view the September 30, 2023 data.

Linked below is our compilation of peer financial information for the nine months ended September 30, 2023. Consistent with past quarters, each New England state has its own tab, and there is a final tab that consolidates all the banks in New England.

The data includes a number of key credit quality, performance, and capital adequacy ratios. We also include simple averages for each state and comparable ratios for all FDIC-insured institutions in the $100 million to $1.0 billion and $1.0 billion to $10.0 billion ranges.

For community banks nationally:

• Net income fell from a quarter ago and one year ago
• The net interest margin decreased for the third straight quarter
• Unrealized losses on securities increased from the prior quarter
• Loan growth remained positive and was broad-based across loan categories
• Total deposits increased quarter over quarter
• Asset quality metrics remained favorable overall

In New England, for the 9-month period in 2023 as compared to the 6-month period in 2023:

• Net interest margins declined slightly
• Net loan charge-offs were stable and lower than national averages
• Non-performing loans to total loans increased slightly, consistent with national averages

Click HERE for the full report.

As always, feel free to contact us with any questions.