Like the overall U.S. banking industry, mutual banks continued to grow multifamily loans in the second quarter while lowering the delinquency ratios on those portfolios.

Operating mutually owned banks held $11.11 billion in multifamily loans at June 30, up 3.4% on a linked-quarter basis and 17.8% from a year earlier. The broader sector experienced growth rates of 2.1% and 9.1%, respectively, across the same time periods.

The multifamily delinquency ratio for operating mutuals was 0.35% at June 30, up 2 basis points from March 31 but down 11 basis points from the year-ago period. Delinquencies for the U.S. banking aggregate came in at 0.26% of total multifamily loans.

San Rafael, Calif.-based First Federal Savings and Loan Association of San Rafael has by far the highest multifamily concentration among mutual banks, at 81.5%, as of June 30. First Federal is the lone mutual based in California. The most recent conversions in the state were completed by Covina, Calif.-based Simplicity Bancorp Inc.: a second-stage deal in 2010 and a mutual holding company deal in 2004.

Of the 25 mutuals with the highest multifamily-loan concentrations, Rutherford, N.J.-based Boiling Springs Savings Bank has the highest growth rate for multifamily balances in the year ended June 30, at 36.5%. Based on one-year Gap to assets, Boiling Springs is one of the most liability-sensitive conversion candidates. The Gap ratio represents assets maturing or repricing within one year minus liabilities maturing or repricing within one year as a percentage of total assets.

Bogota, N.J.-based Bogota Savings Bank is another liability-sensitive mutual, according to the one-year Gap ratio. Its multifamily loans are up 172% during the last three years compared to gross loan growth of just 21%.

Two of the top multifamily lenders, PDL Community Bancorp unit Ponce De Leon Federal Bank in Bronx, N.Y., and FFBW Inc. unit First Federal Bank of Wisconsin in Waukesha, Wis., are undertaking MHC conversions. The offerings for both deals have expired and are awaiting final regulatory approval.

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