Welcome to 2023. We have had a lot of uncertainty over the last couple of years and this year does not look like we are going to have a reprieve from the uncertainty. The future is always a bit murky.

While the future is not clear, there are some things that we can look at that will give us an indication of the way interest rates are trending. One of the key elements I like to review is the Treasury Yield Curve. In a normal rate environment, an investor would get a premium for locking in a rate for a longer period. Currently, that is not the case. Shorter-term investments are yielding a higher rate of return than longer-term investments. For example, as I write this, the 1-year treasury is 4.74% and the 5-year is 3.62%. This is known as an inverted yield curve which may indicate that the market is expecting rates to fall in the future. Unfortunately, this also may be an indicator of a slowing economy.

Looking back to 2022, it was another good year of growth for MTFCU. We had loan growth of over 28%, share/deposit growth of nearly 19%, and asset growth of almost 16%. We were able to have this phenomenal growth while still maintaining a Return on Assets of .69% and a Capital Ratio of 8.11%. Our delinquency ratio was one-half of our industry peer group while membership growth was double our industry peer group. So, MTFCU continues to perform very well.

We can’t do this without the support of our members and our employees. Both are critical to our success, and we are fortunate to have the best employees and loyal members. Our organizational goals include serving our members and it takes the right people to support this mission. Thank you to our members and employees for this success.

Looking forward, we would like to maintain measured growth. Strategically, it is important to keep moving in a positive direction. I have said growth for the sake of growth is not always good but having the size and scale to support new services and technology is very important.  Our members expect us to provide the services they need and want. Launching new technology is expensive, but we are dedicated to staying competitive with our services. So, for us, managing our size and scale is part of our strategic plan, so we are in a position to afford the new services and technology.

One of the newer uncertainties we hear about is cryptocurrency. Where does it fit in? I think this is years away from being stable enough to call it a currency. It reminds me a little of the dot com bubble, for those old enough to recall that time. I know that currency can become a commodity and be traded to make a profit, but the purpose of currency is to add liquidity to an economy to allow for the exchange of goods and services without having to barter.

Having said that however, the blockchain technology that is used in cryptocurrency is great.  There will probably be numerous uses for distributive ledger technology (DTL) that will transform the way information is handled.  Safety and soundness practices will evolve to protect personal information. So, I think there is some value in this. But for most people, cryptocurrency is not something to use for transactions.

One thing you can count on is Members Trust being here to serve our members as we have been doing since 1936.

BRIAN C. GILBERT
PRESIDENT/CEO