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The Massachusetts Commissioner of Banks Mary Gallagher’s annual report noted that banks and credit unions could face some challenges in 2025.
The state’s banks’ total assets and deposits grew 12 percent last year, with deposits seeing a 26 percent increase. Also bank’s net income grew 11 percent in 2024 even though net profitability was negatively impacted by a 39 percent increase in provisions for credit losses, which jumped from $241.07 million in 2023 to $335.19 million in 2024..
This was partially offset by a 10 percent increase in total noninterest income.
“Faced with uncertain policy developments at the federal level, the Division remains committed to consistency and transparency in its operations,” Gallagher wrote in a cover letter to her report. “In turn, our supervised entities continue to exhibit strength by focusing on doing their jobs—adhering to fundamental risk management principles such as liquidity, earnings, capital, asset quality, succession planning, and cyber security—and ultimately serving well Massachusetts customers.”
Gallagher’s report notes that federal trade and economic policy could cause challenges, but banks in Massachusetts are in a good position to still be successful.
“In the year ahead, Massachusetts banks are well positioned to navigate the myriad challenges posed by changes to global trade policy, uncertain employment demand (both government and private sector), and potential monetary and/or rate actions from the Federal Reserve,” the report states.
Credit unions have the potential to be impacted more by potential rate actions, as they currently are dealing with interest rate challenges. Last year saw a 5 percent reduction in total assets for the state’s credit unions, as well as bottom line profitability declining 45 percent.
“In 2025, the Massachusetts state-chartered credit union industry will continue to face interest rate challenges, succession planning considerations, as well as broader macroeconomic uncertainty related to global trade policy and federal administration policy; nevertheless, Massachusetts credit unions remain ready to serve their members with products & services that improve their financial well-being,” the report states.
