iStock illustration

While nearly three-quarters of Massachusetts credit unions had positive net income in the first three quarters of 2022, 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 week by the National Credit Union Administration.

The NCUA Quarterly Map Review showed that 73 percent of Massachusetts’ federally insured credit unions had year-to-date positive net income as of Sept. 30, below the U.S. average of 83 percent. In the second quarter, 69 percent of the state’s credit unions had positive net income compared to the national average of 79 percent.

Membership declined at a majority of Massachusetts credit unions in the third quarter when compared to the third quarter of 2021. The state’s median membership growth rate was -0.6 percent, meaning that half of the state’s approximately 140 credit unions saw membership decline by 0.6 percent or more. The U.S. median rate was -0.2 percent. Washington, D.C., had the largest median decline at 1.5 percent, followed by Pennsylvania at 1.3 percent.

The NCUA said about 52 percent of U.S. federally insured credit unions had fewer members at the end of the third quarter compared to the same quarter in 2021. 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 4.6 percent and 3.3 percent, respectively.

Massachusetts credit unions had a median year-over-year asset growth of 1.3 percent compared to the U.S. median of 3.4 percent. The state’s credit unions in the second quarter had seen year-over-year asset growth of 2.9 percent compared to the U.S. median of 4.2 percent.

Only New Jersey, Maryland and Nebraska had a lower median than Massachusetts for annualized year-to-date return on average assets in the third quarter. Massachusetts had median ROAA of 29 basis points compared to the U.S. median of 50 basis points. In the second quarter, the median annualized year-to-date ROAA had been at 19 basis points, below the U.S median of 42 basis points.

While the state’s credit unions continued to see deposit balances increase, the pace of growth has slowed. The median year-over-year deposit growth was 2.3 percent in Massachusetts compared to the U.S. median of 3.7 percent. Massachusetts in 2021 had a median year-over-year deposit growth of 8 percent, while the U.S. median that year was 9.6 percent.

After seeing loans decline in 2021, Massachusetts’ credit unions had year-over-year loan growth for the third straight quarter. Massachusetts’ median year-over-year loan growth rate was 7.7 percent, below the U.S. median for the third quarter of 10.1 percent. In 2021, Massachusetts had been one of six states that saw loans decline for the year. The state’s median delinquency rate in the third quarter was 32 basis points, better than the U.S. median of 40 basis points.