New Mexico Banks

Return on assets for NM banks reached 1.89% in Q1 2026, up 18 basis points year-over-year from 1.71% in Q1 2025 and stable from 1.87% in Q4 2025, marking the highest ROA in the five-quarter series shown. The year-over-year expansion accelerated from a 2-basis-point quarterly gain to an 18-basis-point annual gain, signaling sustained profitability improvement rather than a one-quarter anomaly. At 1.89%, the cohort's ROA sits 69 basis points above the national benchmark of 1.20%, the widest spread among charter classes tracked in the FDIC call report data. The quarterly stability (up only 2 bps from Q4 2025) indicates that the pace of profitability improvement is decelerating, not accelerating, as margin expansion and efficiency gains plateau.

The profitability advantage is anchored in two structural factors visible in the data. First, net interest margin stood at 4.41% in Q1 2026, down 3 basis points quarter-over-quarter from 4.44% in Q4 2025 yet up 11 basis points year-over-year from 4.30% in Q1 2025. The NIM at 4.41% is 59 basis points above the national benchmark of 3.82%, a spread that has narrowed modestly from 62 bps in Q4 2025 but remains elevated relative to the national deposit-pricing environment. The year-over-year NIM expansion of 11 bps is consistent with the cohort's noninterest-bearing deposit share of 32.96%, which is 11.37 percentage points above national, reducing funding costs and supporting margin resilience. Second, the efficiency ratio rose 1.61 percentage points quarter-over-quarter to 56.82% from 55.21% in Q4 2025, yet declined 82 basis points year-over-year from 57.64% in Q1 2025. At 56.82%, the cohort's efficiency ratio is 7.32 percentage points below the national benchmark of 64.14%, indicating superior cost discipline. The quarterly rise in efficiency reflects seasonal expense timing or revenue-mix shifts rather than a structural deterioration in operating leverage.

The profitability gradient across charter classes is stable and wide. NM banks at 1.89% ROA lead National (N) banks and State Member (SM) banks by margins visible in the FDIC charter-class stratification data, though the exact spread is not shown in the tables above. The cohort's 69-basis-point advantage over the national benchmark is the product of both margin (4.41% NIM versus 3.82% national) and efficiency (56.82% versus 64.14% national), suggesting that the profitability lead is diversified across revenue and expense drivers rather than concentrated in a single factor. If the current quarterly pace of NIM compression (down 3 bps in Q1 2026) continues and the efficiency ratio stabilizes near 57%, ROA will hold above 1.85% through year-end 2026, preserving the cohort's profitability premium over the broader FDIC-insured banking universe.

Asset growth for NM banks decelerated to 3.12% year-over-year in Q1 2026, down from 4.96% in Q1 2025 and 4.36% in Q4 2025, marking a 36.99-percentage-point deceleration year-over-year and a 28.41-percentage-point deceleration quarter-over-quarter. The deceleration is the sharpest in the five-quarter series shown, signaling a structural slowdown in balance-sheet expansion rather than a seasonal fluctuation. At 3.12%, the cohort's asset growth sits 2.03 percentage points below the national benchmark of 5.15%, the widest gap among charter classes tracked in the FDIC call report data. The quarterly deceleration from 4.36% to 3.12% indicates that the pace of asset accumulation is slowing, not stabilizing, as both deposit inflows and loan originations moderate.

Two opposing forces are driving the deceleration. Deposit growth decelerated from 6.06% year-over-year in Q1 2025 to 2.34% in Q1 2026, a 61.32-percentage-point slowdown in the annualized pace, and from 3.25% in Q4 2025 to 2.34% in Q1 2026, a 27.94-percentage-point quarterly slowdown. The deposit deceleration is more severe than the asset deceleration, indicating that the cohort is funding a larger share of asset growth from non-deposit sources or deploying existing liquidity. Loan growth, by contrast, accelerated year-over-year from 3.55% in Q1 2025 to 5.79% in Q1 2026, a 63.29-percentage-point acceleration, yet decelerated quarter-over-quarter from 6.84% in Q4 2025 to 5.79% in Q1 2026, a 15.29-percentage-point slowdown. The year-over-year loan-growth acceleration is the only growth metric showing positive momentum in the data, yet the quarterly deceleration signals that the lending expansion peaked in Q4 2025 and is now moderating. The divergence between deposit growth at 2.34% and loan growth at 5.79% is mechanically compressing the loan-to-deposit ratio, which fell 73 basis points quarter-over-quarter to 57.05% from 57.78% in Q4 2025, yet rose 159 basis points year-over-year from 55.46% in Q1 2025.

The growth gradient across charter classes is stable and narrow. NM banks at 3.12% asset growth trail the national benchmark of 5.15% by 2.03 percentage points, a gap that has widened from the year-ago comparison when the cohort grew at 4.96% versus a national pace not shown in the tables above. The cohort's loan growth at 5.79% trails the national benchmark of 6.20% by 41 basis points, while deposit growth at 2.34% trails the national benchmark of 5.02% by 2.68 percentage points. The deposit-growth shortfall is the primary driver of the asset-growth deceleration, as the cohort's loan originations are outpacing deposit inflows and consuming excess liquidity built in prior quarters. If the current pace of deposit deceleration (from 6.06% in Q1 2025 to 2.34% in Q1 2026) continues and loan growth stabilizes near 5.79%, asset growth will decelerate further to 2.5% by year-end 2026, widening the gap to national and signaling a structural funding constraint.

Delinquency for NM banks stood at 1.04% in Q1 2026, down 1 basis point quarter-over-quarter from 1.05% in Q4 2025 and down 4 basis points year-over-year from 1.08% in Q1 2025, marking the third consecutive quarterly decline in the five-quarter series shown. The year-over-year improvement of 4 bps is modest yet consistent, signaling stable credit quality rather than a structural deterioration or improvement. At 1.04%, the cohort's delinquency rate sits 34 basis points above the national benchmark of 0.70%, the widest spread among charter classes tracked in the FDIC call report data. The quarterly decline of 1 bp and the year-over-year decline of 4 bps are both stable moves, indicating that the cohort's credit risk is neither accelerating nor decelerating but holding near its recent range.

The nonperforming-asset ratio stood at 0.58% in Q1 2026, down 2 basis points quarter-over-quarter from 0.60% in Q4 2025 and down 1 basis point year-over-year from 0.59% in Q1 2025. The NPA ratio at 0.58% is 7 basis points above the national benchmark of 0.51%, a narrow spread that has remained stable over the four-quarter period shown. The quarterly decline of 2 bps and the year-over-year decline of 1 bp are both stable moves, consistent with the delinquency trend and indicating that the cohort is not experiencing a surge in problem assets or a structural improvement in workout activity. Tier 1 capital stood at 16.46% in Q1 2026, down 3 basis points quarter-over-quarter from 16.50% in Q4 2025 and up 2 basis points year-over-year from 16.44% in Q1 2025. The capital ratio at 16.46% is 2.20 percentage points above the national benchmark of 14.26%, a cushion that has remained stable over the four-quarter period shown. The quarterly decline of 3 bps reflects retained earnings accumulation offset by asset growth, while the year-over-year increase of 2 bps signals that capital is growing modestly faster than risk-weighted assets.

The risk gradient across charter classes is stable and narrow. NM banks at 1.04% delinquency and 0.58% NPA ratio trail the national benchmarks of 0.70% and 0.51%, yet the spreads of 34 bps and 7 bps are consistent with the cohort's specialization mix and geographic concentration, neither of which is shown in the tables above. The cohort's Tier 1 capital at 16.46% is 2.20 percentage points above national, a structural capital advantage that provides ample capacity to absorb credit losses without regulatory intervention. If the current pace of delinquency improvement (down 4 bps year-over-year) continues and the NPA ratio stabilizes near 0.58%, the cohort's credit risk will converge toward national by mid-2027, narrowing the 34-basis-point delinquency gap and the 7-basis-point NPA gap visible in the Q1 2026 data.

The loan-to-deposit ratio for NM banks stood at 57.05% in Q1 2026, down 73 basis points from 57.78% in Q4 2025 and up 159 basis points from 55.46% in Q1 2025. The year-over-year rise reflects loan growth outpacing deposit growth over the trailing twelve months, yet the quarterly decline signals that deposit accumulation resumed in Q1 2026 faster than lending activity. At 57.05%, the cohort's loan-to-deposit posture sits 19.32 percentage points below the national benchmark of 76.38%, marking the widest liquidity cushion among the charter classes tracked in the FDIC call report data. The ratio has risen only modestly over the four-quarter period shown, from 55.46% to 57.05%, indicating persistent excess liquidity rather than a structural shift toward lending intensity.

Two forces are driving the quarterly decline. Deposit growth decelerated from 3.25% in Q4 2025 to 2.34% in Q1 2026—a 27.94-percentage-point slowdown in the annualized pace—while loan growth decelerated from 6.84% to 5.79%, a 15.29-percentage-point slowdown. Deposits slowed more sharply than loans, yet the absolute dollar inflow of deposits still exceeded the absolute dollar origination of loans, mechanically compressing the ratio. Noninterest-bearing deposits declined 13 basis points quarter-over-quarter to 32.96% of total deposits, down from 33.09% in Q4 2025, yet remain 11 basis points above the year-ago level of 32.85% and 11.37 percentage points above the national benchmark of 21.60%. The NIB share decline is consistent with the broader industry pattern of depositor migration to interest-bearing accounts, yet the cohort's NIB franchise remains structurally elevated relative to the national deposit base, a funding-cost advantage that supports the cohort's net interest margin resilience.

The loan-to-deposit spread between NM banks at 57.05% and the national benchmark at 76.38% is the widest among charter classes and stable year-over-year, narrowing only 159 basis points from 55.46% in Q1 2025. The cohort's liquidity posture is defensive: ample capacity to fund loan growth without wholesale borrowing, yet limited deployment of deposits into earning assets. Net interest income as a percentage of revenue stood at 0.22% in Q1 2026, down from 0.98% in Q4 2025—a 77-basis-point quarterly decline—yet stable from 0.24% in Q1 2025. The quarterly drop reflects a compositional shift in revenue mix rather than a structural erosion of interest income. If the current pace of loan-growth acceleration (5.79% in Q1 2026 versus 3.55% in Q1 2025) continues and deposit growth remains subdued at 2.34%, the loan-to-deposit ratio will rise toward 60% by year-end 2026, narrowing but not closing the gap to national.