West Michigan banks, credit unions rank among S&P’s list of best-performing in 2020

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Courtesy Northpointe Bank

A group of West Michigan-based financial institutions was recognized by S&P Global Market Intelligence for their outstanding performance last year.

S&P Global Market Intelligence this spring published its 2020 Community Bank & Credit Union Rankings, and four West Michigan institutions were among those included on the list.

The list was divided into three categories: community banks with assets between $3 billion and $10 billion, community banks with assets less than $3 billion and top-performing credit unions.

Banks

Grand Rapids Township-based Northpointe Bank was ranked eighth among the best-performing community banks with assets between $3 billion and $10 billion, and Grand Rapids-based Independent Bank Corp. was ranked 39th in the same category.

Chuck Williams, Northpointe Bank president and CEO, said the recognition comes after a record-breaking year for Northpointe, including the creation of over 261 jobs in the past 12 months. The bank also opened its new operations center in Cascade Township in March.

“We are very pleased to receive this accolade,” Williams said. “I want to emphasize that people are at the center of everything we do. We build trust and lifelong relationships with both our employees and the customers we serve.”

To compile the banks ranking, S&P Global Market Intelligence calculated scores for each bank based on six metrics, weighted: pre-tax return on tangible common equity (25%), efficiency ratio (15%), net interest margin (15%), operating revenue growth (20%), leverage ratio (15%), and nonperforming assets and loans 90 days past due as a percentage of totals assets, net of Paycheck Protection Program loans (10%). Each institution’s standard deviation from the industry mean was calculated for every ranking metric, then combined to derive a performance score. To help normalize the data and mitigate the impact of outliers, caps and floors were applied for each metric.

Based on the above, 168 top-tier banks were eligible for the ranking of top-performing banks with assets between $3 billion and $10 billion.

Credit unions

Grand Rapids-based Lake Michigan Credit Union ranked fourth on S&P’s list of best-performing credit unions of 2020, and Kalamazoo-based Consumers Credit Union ranked 59th.

To compile the ranking, S&P calculated scores for each credit union based on five metrics: member growth; average loans, net of Paycheck Protection Program loans, per member; net worth as a percentage of total assets; delinquent loans as a percentage of total loans; net of PPP loans; and return on average assets. Each institution’s standard deviation from the industry mean was calculated for every ranking metric, then combined to derive a performance score. To help normalize the data and mitigate the impact of outliers, caps and floors were applied for each metric.

Based on the above criteria, 1,727 credit unions qualified for the ranking.

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