iStock illustration
A majority of Massachusetts credit unions had double-digit loan growth last year, but the state’s credit unions continued to see one of the lowest returns on average assets in the U.S., according to data released this month by the National Credit Union Administration.
The NCUA Quarterly Map Review showed that 75 percent of Massachusetts’ federally insured credit unions had positive net income for the full year of 2022, below the U.S. rate of 85 percent. In 2021, 74 percent of Massachusetts credit unions had positive net income compared to 84 percent nationwide.
Membership had declined at a majority of Massachusetts credit unions by the end of 2022 when compared to the end of 2021. The state’s median membership growth rate was -0.3 percent, meaning that half of the state’s approximately 140 credit unions saw membership decline by 0.3 percent or more. At the median, membership nationwide was flat in 2022, while 24 states saw declines in membership. Washington, D.C., had the largest median decline at -2.8 percent, followed by New Hampshire at -2.3 percent.
The U.S. credit unions with falling membership tended to be small, the NCUA said, with more than 60 percent having less than $50 million in assets. Credit unions headquartered in Alaska and Idaho had the highest median membership growth rates of 5.3 percent and 4 percent, respectively.
Massachusetts credit unions had median year-over-year asset growth of 0.8 percent in 2022 compared to the U.S. median of 1.3 percent. The state’s credit unions in 2021 had seen year-over-year asset growth of 6.4 percent compared to the U.S. median of 8.8 percent.
Only New Jersey and Nebraska had a lower median than Massachusetts for annualized year-to-date return on average assets in the fourth quarter. The state’s credit unions had median annualized ROAA in the fourth quarter of 35 basis points, lower than the U.S. median of 51 basis points. The median annualized ROAA in 2021 had been at 29 basis points compared to the U.S median of 50 basis points.
While a majority of the state’s credit unions continued to see deposit balances increase, the pace of growth has slowed. The median 2022 deposit growth was 0.3 percent in Massachusetts compared to the U.S. median of 0.9 percent. Massachusetts in 2021 had median year-over-year deposit growth of 8 percent, while the U.S. median that year was 9.6 percent.
Massachusetts credit unions saw loan growth in 2022 after a decline in outstanding balances in 2021. The median year-over-year loan growth rate at the end of 2022 was 11.8 percent compared to the U.S. median of 12.7 percent. In 2021, a majority of Massachusetts credit unions had seen loans decline, with a median loan growth rate of -0.9 percent compared to the U.S. median in 2021 of 3 percent. The state does continue to have a lower median delinquency rate at 30 basis points compared to the U.S. fourth quarter median of 47 basis points.
