America’s Mutual Banks Announces Annual Financial Analysis of the Mutual Thrift Industry: Commitment to Community, Stable Earnings and High Capital
May 09 2024 - 11:00AM
America’s Mutual Banks, a national association of prominent mutual
banks, announced today the release of its annual comparative
financial report on the state of the mutual thrift industry by R.
P. Financial Co. The report, commonly known as the AMB Dashboard,
compared 313 mutual thrift institutions (“Mutuals”) in three asset
size classes to other peer financial institutions including public
mutual holding companies, stock thrifts, commercial banks and
credit unions.
The Report found that mutuals continue to have greater capital
levels generally reflecting a more conservative risk profile.
Compared to “all non-mutuals,” the average Tier 1 Leverage ratio
for Mutuals in the three asset size classes ranged from 60 to 240
basis points greater. Smaller Mutuals had higher capital ratios in
comparison to larger Mutuals.
The mix of 1-4 family mortgage loans to total loans for Mutuals
in each size class exceeded peer averages by 28.7 to 46.9
percentage points. Since commercial relationship banking is a key
source for demand deposits, the deposit mix for Mutuals reflects a
higher proportion of retail time deposits, thus resulting in their
higher cost of deposits.
The R.P. Financial Analysis accompanying the report stated;
Mutuals are not compelled to provide shareholder returns in the
form of market level ROEs and cash dividends. Given their different
business model relative to non-mutual financial institutions,
Mutuals continue to provide greater benefit to customers in the
form of interest advantages to depositors and borrowers and to the
communities served in the form of greater engagement.
The report further found that number of Mutuals and peer
financial institutions has slightly declined over the last five
years but the Dashboard comparisons are virtually unchanged to
those at year end 2018. Mutuals have remained committed to
maintaining stronger capital and providing home ownership financing
consistent with their charter. The biggest difference over the last
five years is that Mutuals in each asset size class have reduced
their reliance on funding with retail time deposits without
increasing the commercial loan mix. This is in stark contrast with
some large commercial banks that have linked their lending
relationships to demand and non-insured accounts.
About America’s Mutual Banks
America’s Mutual Banks is an association of like-minded mutual
banks dedicated to preserving and advancing the mutual banking
form. America’s Mutual Banks is headquartered at 701 8th Street NW,
Suite 700, Washington, D.C. 20001. Please visit
www.americasmutualbanks.com or contact Douglas Faucette, Locke Lord
LLP, at 202-220-6961 with any questions or requests for additional
information on America’s Mutual Banks.
Contact: Douglas Faucette Locke Lord LLP T:
202-220-6961dfaucette@lockelord.com