The foundation of a prosperous bank is its financial health; our financial sustainability determines our ability to make loans that support the growth of other sustainable organizations. As of year-end 2016, the bank has enjoyed nearly five years of profitability.
We have earned the highest possible ratings from both the Global Impact Investing Rating System (GIIRS) and BauerFinancial, a rating of 5 out of 5, respectively. GIIRS assesses the social and environmental impact of companies and funds using an approach analogous to Morningstar investment rankings and Capital IQ financial analytics. BauerFinancial is an independent ratings agency that rates U.S. banks and credit unions based on their capital ratio, profitability trend, level of delinquent loans, community reinvestment rating, liquidity and other criteria.
New Resource celebrates steady growth year over year. In 2016 deposits grew by 19 percent and loans grew by 27 percent.
We exceeded our goals for deposit growth in 2016, with total deposits reaching $287.9 million. Our deposit growth reflects the continuing appeal of a bank with our unique mission. Gross loans totaled $244 million; however, our net loan growth of 27 percent does not give the complete picture of our success in sourcing loans. In 2016 we generated $52 million in new loans outstanding. However, we had payoffs and paydowns of $37 million due to the strengthening economy and the success of our portfolio companies. Some of those companies enjoyed rapid sales growth and were purchased, resulting in loan payoffs. Others were companies with real estate loans that sold the underlying real estate into a strong market.
The table below shows our net income and other key measures of financial health; more detailed financial data are available in the Investor Relations section of our website.
*Core deposits are all checking, savings, NOW, money market and CD accounts under $250,000 (excluding brokered CDs).
New Resource also measures financial performance against a peer group of similar sized California banks. Our financial ratios remain competitive and reflect our strength as a mission-driven bank. Measuring liquidity, our total deposits to total assets remains strong and on par with our peer group. We continue to outperform our peers in equity to total assets and nonperforming assets to total assets ratios. Our loan growth exceeded that of our peers, while our average ROA dropped below theirs.
The real economy is the portion of the economy that produces goods and services, as opposed to the financial economy, which consists of buying and selling financial instruments. New Resource is committed to serving the real economy and establishing long-term client relationships, guided by GABV’s sustainable banking principles.
At year-end 2016, 76 percent of our assets and 92 percent of our revenues were derived from the real economy, exceeding the GABV target metrics. At year-end 2016, 66% of our assets were committed to the triple bottom line, compared to 58% at the end of 2015.
GABV research shows that banks that make real economy investments not only better serve their communities, but also have higher levels of performance and resilience. In a 2015 report, the GABV outlines metrics that demonstrate how sustainability focused banks (SFBs) outperform Global Systemically Important Financial Institutions (GSIFIs). SFBs’ financial focus on the real economy is measured by their loans to assets and deposits to assets. They also show higher levels of capital, based on equity to total assets metric.
As with New Resource’s resiliency in the aftermath of the 2008 financial crisis, SFBs have shown greater stability and growth than GSIFIs when measuring financial returns. (The full report can be downloaded here.)