Financial Wellbeing Isn’t Marketing. It’s Strategy. Members don’t remember rates. They remember who helped them feel safer and more confident with money — creating the emotional connection that drives deeper engagement and participation. This is especially important in a K-shaped recovery. By embedding financial wellbeing into products and experiences, you can improve member outcomes, differentiate your brand, and fuel sustainable growth. It’s not messaging, it’s strategy. Learn more today.

The post The K-Shaped Recovery And An Economy Divided appeared first on CreditUnions.com.

Prudent savings and debt management habits have mildly improved the financial situation for households across the United States in the past year. Nationwide, fewer households are considered financially vulnerable. Still, past teachings suggest these gains can be swiftly reversed.

PERCENTAGE OF HOUSEHOLDS IN EACH FINANCIAL HEALTH TIER, BY YEAR
FOR U.S. HOUSEHOLDS
SOURCE: Financial Health Network

After years of distress, the past year’s mild decrease in household financial vulnerability suggests those struggling have some breathing room. Most promising, lower-income and lower-wealth households were less likely to be financially vulnerable in 2025 than in 2024, having decreased from 32% in 2024 to 28% in 2025, according to a September 2025 report from the Financial Health Network.

Despite this progress, the share of households that are financially healthy has not increased at a statistically significant level since 2021. Without focus and investment in the most vulnerable, progress is unlikely to last with each passing year.

Strategic Insights

• Year-over-year, the share of households that are financially healthy or financially coping has increased to 31% and 54%, respectively. Correspondingly, the financially vulnerable decreased to 15% during the same time period.
• Households without revolving credit card debt are more likely to be financially healthy. A quarter of households with revolving credit card debt are considered financially vulnerable.
• Only 56% of households are confident that their total insurance policies will provide enough support in an emergency, a meaningful decrease of 3% from 2024.
• Nationwide, 71% of households pay all of their bills on time, higher than pre-pandemic levels.
• Although still below pre-pandemic levels, 49% of households spent less than their income in the past year. This figure represents a meaningful rise from 2024.
• Geographically, the South has the highest share of financially vulnerable households whereas the West has the lowest. There is little difference between rural and urban households.
• The data from the Financial Health Network’s Trends Report was collected in the spring of 2025, from April to May. Since then, tariff policy and their impacts on prices could have adversely impacted households’ ability to spend less than their income. Similarly, layoffs in the labor market could hurt households’ status, increasing the share of financially vulnerable.
• Financial health is an objective metric, but that’s not the only thing that matters. People’s emotional connection to their financial situation is just as important. Gallup measures this as “Financial Wellbeing.”
• Financial wellbeing addresses a critical dimension in understanding the way someone’s financial situation impacts their life. Do they feel in control? Are they confident about their future? Do they believe they have a support structure they can count on?

It’s Time To Lead The Future Of Financial Wellbeing. Members stay when they feel seen, cared for, and confident in their credit union’s commitment to financial wellbeing. Credit unions who participate in the Member Engagement & Financial Wellbeing Consortium from Callahan & Associates and Gallup are already seeing behavior shifts and increased participation that improve wellbeing and drive sustainable growth. Will you join the next cohort?

The post Are U.S. Households Finally Catching A Break? appeared first on CreditUnions.com.

Although most top-level metrics are not signaling a recession, significant evidence points to a K-shaped economy, one in which some Americans — especially those tangential to the AI-fueled tech and finance sectors — are doing well while others — including middle- or low-income consumers most severely squeezed by tariff-driven inflation and government layoffs — struggle to make ends meet.

In times like these, members look to financial institutions they can trust, who look out for the best interest of accountholders, not shareholders. Third quarter data show credit unions are making steady, impactful progress in serving their members.

Takeaway 1: Member Growth Ticks Up

MEMBER GROWTH
FOR U.S. CREDIT UNIONS
SOURCE: Callahan & Associates

• Growing membership is the surest sign that credit unions are providing value to Americans. It shows the industry is offering in-demand products and services when for-profit institutions might be pulling back to reduce risk.
• Total industry membership growth rose to 2.2% in the third quarter, reversing a years-long trend of decelerating growth. Even more, the industry’s ongoing retreat from indirect lending suggests these additional members are poised to conduct extensive, engaged business with their institution.
• Indirect lending at credit unions dipped below 19.9% of total lending, the lowest since the end of 2021. Renewed mortgage demand helped this trend, but the drop still reflects a stronger “core” member base.

Key Takeaway 2: Loan Originations Rise Amid Rate Cuts

QUARTERLY LOAN ORIGINATIONS AND 10-YEAR TREASURY YIELD
FOR U.S. CREDIT UNIONS
SOURCE: Callahan & Associates

• The Federal Reserve cut rates in September and again in October, lowering the federal funds rate to 3.75% – 4.00%. In anticipation of these reductions, the 10-Year Treasury rate dropped and borrowing became cheaper.
• Members correspondingly increased borrowing in the third quarter. Originations in real estate, where lending was previously dormant, were up by 24.2% year-over-year.
• Lower rates tend to drive refinancing, an area in which credit unions thrive. As rates continue to drop, expect loan demand to further increase in that relationship-driven piece of the portfolio.
• Consumer loan originations were up 13.6% year-over-year; strong performance that increased tariffs and vehicle prices could be hindering.

Trendwatch 3Q25. Explore third quarter performance trends and learn about their impact on the industry today with Callahan & Associates. Callahan hosts and industry guest presenters highlight where credit unions are excelling, where challenges are emerging, and how peers are responding. Don’t wait to gain key benchmarks, strategic takeaways, and insights to navigate the rest of 2025. Watch On-Demand today.

Takeaway 3: Core Members Are Deepening Relationships

AVERAGE MEMBER RELATIONSHIP
FOR U.S. CREDIT UNIONS
SOURCE: Callahan & Associates

• • The average member relationship remained mostly flat in the third quarter.
  • Despite the fact the average share balance increased by $424, or 3.2%, year-over-year, it actually fell $38 quarter-over-quarter amid increased consumer spending.
  • The average loan balance increased $31quarter-over-quarter thanks mainly to a 6.0% uptick in mortgages as members took advantage of falling interest rates.
  • As more members join the movement, it can become difficult for credit unions to identify the needs of members at both the top and the bottom of the wealth bracket. Credit unions would do well to work with members on an individual basis to uncover the right opportunities.

Takeaway 4: Delinquency Rises Across All Product Types

DELINQUENCY BY PRODUCT TYPE
FOR U.S. CREDIT UNIONS
SOURCE: Callahan & Associates

• Following fairly normal seasonality patterns, total delinquency rose 4 basis points in the third quarter to reach 0.94%.
• Credit card delinquency exceeded 2% for the first time in 2025; still, it is lower than where it was in the third quarter of 2024. A similar pattern is evident in used auto, where delinquency has risen during the year but is lower than the third quarter of 2024. Trends in consumer loan repayment indicate members are struggling but showing resiliency in the face of tariffs and inflation.
• In commercial and residential real estate, delinquency has inched up from this time last year. This is particularly worrying in residential real estate, which is a traditionally stable loan type. The bump could be signaling a return to post-2008 behavior, when borrowers walked away from their mortgage loans before others.
• Net charge-offs fell 2 basis points quarterly to 0.76%. First mortgage net charge-offs remained almost non-existent as credit unions work with members around these mortgages.
• A drop in asset quality suggests rockier roads for members and provides an opportunity for credit unions to guide and support.

Takeaway 5: Net Interest Margin Growth Outpaces Operating Expense Growth

NET INTEREST MARGIN VS. OPERATING EXPENSE RATIO
FOR U.S. CREDIT UNIONS
SOURCE: Callahan & Associates

• Credit union margins took a sizable jump, hitting 3.38% on net, driven by a rise in interest income while expenses held flat. The rise in income came mainly from increased lending demand as credit unions converted more shares into higher-yielding mortgages. The cost of funds held steady 2.06%.
• Operating expenses grew slightly to 3.11%, mirroring the pace of the past few years as inflation hits the costs of doing business. All told, ROA is healthy at 0.81%
• High margins, driven by rate repricing, provide credit unions with a clear operational advantage in the near term. Interest margins have not outpaced operating expenses by such a large gap in this millennium.
• Credit unions have flexibility to help struggling members without risking long-term stability; however, rate cuts are likely to bring down interest margins in the mid-to-long term while operating costs continue an inflation-driven upward trend.

Let’s Review Your Credit Union Performance Data Together. Join a Callahan advisor for a complimentary 1:1 session to analyze your performance reports. We’ll benchmark your credit union against two to three peer groups of your choice and provide a detailed report of our findings at the end of the session to help your team make informed strategic decisions. Request your free session today.

See You Next Quarter! CreditUnions.com updates this page with the freshest FirstLook credit union data every quarter, so don’t forget to come back for insights into the fourth quarter of 2025.

The post 5 Takeaways From Trendwatch appeared first on CreditUnions.com.

This year, the 2025 World Series features a classic battle royal between the Los Angeles Dodgers and the Toronto Blue Jays. The introduction of a Canadian team presents a new challenge for determining a statistical standout, but the analysts at Callahan & Associates are eager to take a swing.

Using credit union performance data from cooperatives in the Greater Los Angeles region to represent the Dodgers and Niagara and Erie counties in New York to represent the Blue Jays, Callahan analysts have chosen a home run hero. Data from credit unions across the United States is also weighing in to represent impartial observers everywhere. “Impartial,” truly.

GAME 1: Efficiency Ratio

Like most sports, baseball is about finding an edge in the margins. How can a team most effectively spend its dollars? Finding a diamond in the rough who turns into a regular contributor can give a team a serious edge.

Credit unions are no different, maximizing efficiency per dollar spent is key to success. The observation peer group (and Toronto) holds the edge here, spending $0.70 per every dollar earned.

EFFICIENCY RATIO
FOR U.S. CREDIT UNIONS
SOURCE: Callahan & Associates

Although the Dodgers’ hefty payroll isn’t exactly the epitome of Moneyball, the team has found value in Japanese-born players such as closer Roki Sasaki and starting pitcher Yoshinobu Yamamoto. It also has a guy who can hit and pitch at an elite level — looking at you, Shohei Ohtani.

On the other hand, the Blue Jays has enticed production from star players like Vladimir Guerrero Jr. as well as enjoyed great postseason success from lesser names like third baseman Ernie Clement. And according to the data, the impartial observers outperform both regions in efficiency.

Go ahead and mark that against the Dodgers.

SCORE: Toronto 1, Los Angeles 0

GAME 2: Revenue Per FTE

Unlike other sports, one player cannot take over a baseball game. A great starting pitcher can go a long way, but they still need their bullpen to close it out.

Similarly, a great hitter needs their teammates to get on base and drive in their run. Thus, depth is important. Credit unions are no different, it takes a well-rounded staff to achieve success.

REVENUE PER FTE
FOR U.S. CREDIT UNIONS
SOURCE: Callahan & Associates

Credit unions in the greater Los Angeles region bring in more revenue per full time employee than those in the Toronto tag team. Chalk this one up for the mighty Dodgers.

SCORE: Toronto 1, Los Angeles 1

GAME 3: Average Dividend Per Member

Every die-hard fan of any team wants their organization to spend top dollar on the best players, but there are different ways to build a roster. Ultimately, what matters is the return fans get from attending games, buying merch, sharing on socials, and more.

Similarly, credit unions want to reward their members’ loyalty.

AVERAGE DIVIDEND PER MEMBER
FOR U.S. CREDIT UNIONS
SOURCE: Callahan & Associates

Much like Dodger fans, credit union members in the Greater Los Angeles region enjoy a nice return on their financial investment. Credit unions there returned $333 in annual dividends per member. That’s greater than both the Niagara and Erie region and the rest of the country.

Can the Dodgers be stopped?

SCORE: Los Angeles 2, Toronto 1

GAME 4: Total Auto Loan Growth

Although major leaguers mostly fly from city to city, baseball is still a game of miles. In the minors, being a mighty road warrior that can grind through long bus rides, packed schedules, and gritty transit days is integral to season success.

No matter the method of transportation, travel time provides players the opportunity to sharpen their minds and grow closer as a team. These intangible off-the-field benefits should not be ignored when determining a winning season.

Travel is an integral part of most members’ lives, too, particularly in the United States’ automobile-driven society. Credit unions know this. Auto lending isn’t just a number on a balance sheet; it’s an indication of how the institution is helping members move through life’s journey.

AUTO LOAN GROWTH
FOR U.S. CREDIT UNIONS
SOURCE: Callahan & Associates

Here, credit unions as a lending block demonstrate more resilience in their portfolios, with auto lending decreasing at a slower pace than in the individual regions. Credit unions in Niagara and Erie counties, too, offer a reminder that endurance, on the road or in the data, is what makes a true contender.

With that, Toronto ties the series up!

SCORE: Los Angeles 2, Toronto 2

GAME 5: Total Loan Delinquency

When a hitter steps to the plate, they need to have good timing. Swing too early or too late and they’ll miss entirely or hit a foul.

Likewise, credit unions rely on good timing in loan repayments. If a member goes too long without making a payment, they’ll fall into delinquency. Just like a mistimed swing can cost a batter the game, missed payments can cost a member their financial health. For the credit union, delinquencies can throw off their lending rhythm and strike their financials.

TOTAL LOAN DELINQUENCY
FOR U.S. CREDIT UNIONS
SOURCE: Callahan & Associates

Toronto takes the cake here, just barely edging out the Greater Los Angeles area. Credit unions in Niagara and Erie counties pull through with an impressive 0.67% total loan delinquency — the lowest of the three peer groups represented.

SCORE: Toronto 3, Los Angeles 2

And with that, Callahan predicts a great upset: The Toronto Blue Jays will edge out the Los Angeles Dodgers by the thinnest of margins.

EDITOR’S NOTE: Ignore our author’s bias and that the World Series is a best-of-seven. Fact check our math by tuning into Game 1 of the World Series on Oct. 24 and (if necessary) a Game 7 on Nov. 1.

The post Can Credit Union Performance Data Predict A World Series Victory? appeared first on CreditUnions.com.

Amid industry consolidation, the average credit union size has jumped 186% in the past 10 years, growing from $188.2 million to $538.2 million as credit unions chase the efficiencies that come with scale.

Mergers are growing in scale, too. As of June 30, 2025, the average asset size for a merged credit union was $66.3 million. By comparison, 65% of all credit union mergers since 2019 included institutions with less than $20 million in assets. Even larger mergers are on the horizon, with plans in motion from:

• Wings Financial Credit Union ($9.5B, Apple Valley, MN) and Ent Credit Union ($10.3B, Colorado Springs, CO).
• Digital Federal Credit Union ($12.7B, Marlborough, MA) and First Tech Federal Credit Union ($17.1B, San Jose, CA).
• CommunityAmerica Credit Union ($5.4B, Lenexa, KS) and Unify Financial Federal Credit Union ($3.5B, Allen, TX).

On the bank front, seven credit unions in 2025 have reached an agreement to acquire a bank, down from 17 in 2024. Although the boards have approved these mergers, the agreements still need to clear regulatory approval.

MERGER NUMBERS AND RATE
FOR U.S. CREDIT UNIONS
SOURCE: Callahan & Associates

MERGERS COMPLETED BY QUARTER
FOR U.S. CREDIT UNIONS
SOURCE: Callahan & Associates

ASSETS OF MERGED CREDIT UNIONS
FOR U.S. CREDIT UNIONS
SOURCE: Callahan & Associates

AVERAGE ASSET SIZE OF MERGED CREDIT UNIONS
FOR U.S. CREDIT UNIONS
SOURCE: Callahan & Associates

CREDIT UNION MERGERS
FOR U.S. CREDIT UNIONS
SOURCE: Callahan & Associates

CREDIT UNION BANK ACQUISITION BY YEAR
FOR U.S. CREDIT UNIONS
SOURCE: Callahan & Associates

AVERAGE ASSET SIZE AND CHARTER COUNT
FOR U.S. CREDIT UNIONS
SOURCE: Callahan & Associates

CHARTER COUNT BY ASSET SIZE
FOR U.S. CREDIT UNIONS
SOURCE: Callahan & Associates

Mergers Made Smarter. Callahan’s Peer Suite has built-in merger functionality that allows credit unions to combine the 5300 Call Report data of two reporting credit unions to scenario plan a merger and gauge the financial impact using pre-built charts for lending, deposits, income, expenses, capital, staffing, members, infrastructure, electronic offerings, member metrics, and more. Learn more today.

The post Credit Union Mergers Are On The Rise appeared first on CreditUnions.com.

Operating expenses at U.S. credit unions have been on the rise as cooperatives reward staff, invest in technology, and pay for strategic guidance. Unfortunately, this has come at the expense of stronger earnings.

Operating expense has jumped nearly 7% annually in the past five years. It has risen as a percentage of average assets for 13 consecutive quarters as inflation makes its mark on employee compensation, office operations, and professional services. Smaller credit unions, which typically do not benefit as much from returns of scale, have been hit particularly hard.

Currently, the rise in the net interest margin has more than offset the rise in operating expense; however, net interest margins are currently benefitting from the elevated interest rate environment. If rates come down, expect net interest margins to drop, too.

OPERATING EXPENSE RATIO
FOR U.S. CREDIT UNIONS
SOURCE: Callahan & Associates

Increased spending is not inherently bad — in fact, strong operations are a crucial part of quality member service. Credit unions must invest in their operations to remain competitive in the marketplace and give members the financial experience they deserve. The key, however, is efficient expenses. Are the increased costs generating proportional returns and value for members?

U.S. INFLATION AND CREDIT UNION OPERATING EXPENSES
FOR U.S. CREDIT UNIONS
SOURCE: Callahan & Associates

Diving Into OpEx Trends

Inflation peaked at 7% in 2021 and has hovered around 3% since 2023. Today, rising prices have trickled into compensation, travel, office costs, and more, yet the efficiency ratio — calculated as operating expenses divided by operating income — at U.S. credit unions improved for the first two quarters of 2025 and stood at 70.79% as of June 30. Although this is promising, a rate cut from the Fed would dig into interest income and erode the efficiency ratio.

OPERATING EXPENSE COMPOSITION
FOR U.S. CREDIT UNIONS
SOURCE: Callahan & Associates

At 52.6%, employee compensation and benefits constitute the majority of a credit union’s expenses. To retain and reward experienced talent, credit unions have increased average salaries 7.8% per year for the past 10 years.

A happy staff is one of the keys to superior member service, but in addition to monetary compensation, it is important to provide appropriate resources, which come at a cost, too. In the past decade, costs for professional and outside services have risen faster than other expenses and comprise more of the operating expense budget with each passing year. Investing in these services, particularly new technologies, is essential. It would be costly, inefficient, or downright impossible for a credit union to provide many of them in-house, yet they are necessary in today’s competitive, commoditized financial services market. What’s less necessary is physical office space. Although office operation costs have remained fairly flat the past few years, office occupancy has declined. This is likely the result of post-pandemic adjustments in response to realigned office space needs.

In addition to the right tools, the right messaging goes a long way in winning over members. Although educational and promotional budgets comprise a small part of operating expenses, their impact can be outsized. Getting the word out about a credit union’s purpose is one way to draw in existing as well as potential new members and efficiently deepen relationships down the road.

Bottom Line

Unchecked operating expenses hurt a credit union’s ability to grow and return maximum value to members, yet keeping up with currents needs and expectations comes at a cost. Whether today’s investments pay off will depend on how well credit unions can leverage new resources to deliver meaningful benefits for members.

For now, credit unions must ensure investments in necessary services don’t constrain their ability to fulfill their member-driven missions. It’s a difficult balance, but credit unions have a secret weapon: their purpose. If they can clearly communicate why they exist, consistently deliver on that promise, and prove themselves to be trusted financial partners, they can build lasting loyalty rooted in strategy and service.

The post Unpacking The Surge In Credit Union Operating Expenses appeared first on CreditUnions.com.

WORK VS. RETIRE
FOR 1,000 REGISTERED VOTERS | DATA AS OF APRIL 2025
SOURCE: BlackRock Redefining Retirement

In today’s economic environment, saving is more important than ever, yet, many Americans have trouble doing so. The latest data underscores a growing sense of retirement insecurity and highlights key opportunities for credit unions to support savers at every stage of life.

Strategic Insights

• The closer people are to retirement, the more they tend to worry about their savings. In the BlackRock survey, 47% of respondents between the ages of 45 and 54 reported worrying about their retirement savings at least once a day; half between the ages of 55 and 64 check the performance of their retirement savings on a monthly basis at least. This continues into retirement, when 76% wished they had saved more money for retirement.
• IRA and Keogh plans are an optimal offering to help members actively plan for retirement, as such accounts offer potential tax benefits for individuals as well as self-employed or small-business owners. Among U.S. credit unions, 72% offer at least one IRA/Keogh account; however, IRA/Keoghs account for only 4% of the credit union share portfolio.
• Given the power of compounded savings, it’s better for members to plan ahead and start their retirement savings earlier rather than later. But, how does compounded savings work? How early should members start saving? How much might they need to retire comfortably? These are all common questions that credit unions can easily address through financial education programs.
• Even better — consider offering different programs for different member needs. Financial education programs geared toward smart retirement are a good way to coax younger members into thinking about how to manage their personal finances now to be better prepared down the road, whereas programs developed for older members might focus more on claiming Social Security benefits and the details of living on a fixed income.
• Abound Credit Union ($2.5B, Radcliff, KY) has partnered with Western Kentucky University since 2021 to give high school students a week of college experience learning about basic savings, budgeting, and lending. Read more about that in “School’s Out For Summer, But Financial Education Continues.”
• In 2022, InTouch Credit Union ($835.9 Plano, TX) expanded services for those nearing or in retirement, and in 2025, Golden 1 Credit Union($20.3B, Sacramento, CA) was named No. 1 on Money.com’s “Best Banks and Credit Unions for Seniors” thanks in part to its personal, proactive, and comprehensive approach. Read more in “Credit Unions Make Retirees’ Golden Years Brighter.”

Want to dive deeper into retirement data? Check out “Americans Aren’t Ready For Retirement. Credit Unions Can Help” and “What Does The Data Say About Financial Wellness?” on CreditUnions.com.

The post The New Retirement Reality Reveals Startling Facts appeared first on CreditUnions.com.

How Does Your Asset Quality Compare? Book a free 1:1 session to benchmark your credit union against two to three peer groups of your choice. You’ll receive a detailed report with key insights to guide your team’s decision-making. With Callahan, it’s never been easier to leverage industry data to assess credit union performance, uncover new opportunities, and strengthen your strategic initiatives. Book now.

The post Credit Union Asset Quality In 1Q 2025 appeared first on CreditUnions.com.