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ABA Mutual Bank Survey: More Examiners Understand Mutuality.

WASHINGTON: The American Bankers Association annual survey of mutual institutions showed that an increasing number of bankers believe regulatory examiners understand the mutual model. According to the survey - released at the ABA Mutual Community Bank Conference in Washington today - 81 percent of mutual banks reported that their exam teams understand the concept of mutuality compared to 66 percent in 2013.

"We believe this improvement is a direct result of ABA's advocacy, outreach by the agencies and concerted efforts by mutual bankers to build stronger relationships with their regulators," said Robert Davis, ABA executive vice president. "Mutual institutions remain a remarkably strong component of the community banking system."

Most of the 119 respondents, 63 percent with assets less than $500 million, expect asset growth and higher profitability in 2016. About two-thirds expect commercial loan activity and residential mortgage lending to increase, while only 2 percent and 11 percent expect declines in these categories, respectively.

Seventy-four percent felt they would achieve earnings growth primarily through traditional businesses in which their institutions had expertise, and an additional 23 percent expected earnings growth to come from new and traditional business lines combined.

Forty-four percent considered merger options in 2015, down 22 percent from last year. Forty-five percent said a merger is not likely in the next three to five years, while 34 percent indicated a 50-50 chance.

Ninety-two percent of mutual banks say they differentiate themselves from their competitors based on their mutuality.

With a deep tradition of consumer-oriented community banking, these organizations include 549 mutual, community-based institutions, including banks in 167 mutual holding companies. These banks held $263.9 billion in assets as of December 31, 2015.

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Publication:Daily the Pak Banker (Lahore, Pakistan)
Date:Mar 25, 2016
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