No. 1: Consumers Need Support Now More Than Ever

INDEX OF CONSUMER SENTIMENT
FOR 900-1,000 MONTHLY WEB INTERVIEWS | DATA AS OF MARCH 2026
SOURCE: UNIVERSITY OF MICHIGAN SURVEYS OF CONSUMERS

• After a brief rebound in early 2024, the Index of Consumer Sentiment declined steadily throughout 2025 and into 2026. The reading of 55 in March 2026 was even lower than the peak days of the COVID pandemic and signals genuine household anxiety rather than routine fluctuation. When consumer outlook is this uncertain, households often pull back on borrowing, delay major purchases, and prioritize liquidity.
• Of course, social media and the 24-hour news cycle can skew the perception of economic health away from household reality. Indeed, certain segments of the economy are doing OK; unfortunately, others are hurting. With this context, it’s important to remember that macroeconomic data represents the average and credit unions serve those on the lower end of that economic spectrum.
• For credit unions, today’s reality is both a warning and an opportunity. Members under financial stress are more likely to need guidance, restructuring options, and financial counseling. Institutions that show up proactively — rather than waiting for delinquencies to surface — will deepen loyalty when it matters most.

Watch Trendwatch on demand today. Did you miss this quarter’s live Trendwatch webinar? No worries! Catch it on demand. Learn about first quarter performance trends from industry experts and take note of the practical insights you can act upon today to strengthen strategy, serve members better, and perpare for what comes next. Watch Trendwatch today.

No. 2: Member Growth Is Historically Low; Confounding Factors Are At Play

ANNUAL MEMBER GROWTH
FOR U.S. CREDIT UNIONS
SOURCE: CALLAHAN & ASSOCIATES

• Membership growth remains sluggish despite a slight uptick in the first quarter. Much of the prior-year volume came from indirect lending — a channel that’s often expensive and ill-suited to building lasting relationships. Credit unions have pulled back from indirect lending and now must find new ways to tell their story and fill their lending pipelines.
• Membership growth is diverging by asset size — smaller credit unions are posting rates as low as -0.5%, whereas larger peers hold near 1.8%. Scale plays a role, but so does an education gap: younger members increasingly don’t know what they’re missing. Smaller credit unions have the opportunity to make the case for community finance to a generation that hasn’t heard it yet.
• On the bright side, relationships with existing members are deepening. Products per member and average relationship balances are up, as are most product penetration rates. In short, fewer new members might be joining the movement, but credit unions are still heavily supporting their core member base.

No. 3: First Mortgages Are Carrying Loan Growth

YEAR-TO-DATE LOAN ORIGINATIONS
FOR U.S. CREDIT UNIONS
SOURCE: CALLAHAN & ASSOCIATES

• Year-to-date loan originations hit $152.6 billion as of the first quarter of 2026; that’s a 13.6% increase from this time last year.  First mortgages have been doing the heavy lifting. As rate cuts filter through the housing market — and prices stabilize in many markets as wages partially catch up — demand for homebuying and refinancing is returning.  Credit unions with a strong mortgage infrastructure are well-positioned to capitalize on this trend, especially in the relationship-driven refinance space where credit unions historically thrive.
• Other real estate and commercial real estate categories contributed to loan growth to a lesser degree. Auto lending, which dominated origination activity in prior years, is notably absent as a growth driver — a reflection of the industry’s retreat from indirect lending, tariffs, elevated vehicle prices, tighter consumer budgets, and the continued hangover from pandemic-era buying behavior.

No. 4: Asset Quality Is Improving … Seasonally, At Least

ASSET QUALITY RATIO
FOR U.S. CREDIT UNIONS
SOURCE: CALLAHAN & ASSOCIATES

• Credit unions reported the typical first quarter improvement in the asset quality ratio. Net charge-offs and delinquencies ticked down from elevated year-end levels. Delinquency ratios came in at 0.81%, whereas net charge-offs settled at 0.84%, for a combined ratio of 1.65%. These numbers are better than the fourth quarter of 2025 but remain higher than pre-pandemic norms.
• First quarter seasonality is relevant. Tax refunds, holiday debt payoffs, and January financial resets temporarily reduce delinquency. The real test will come in the second and third quarters when the buffer fades and credit unions will see if consumer sentiment reflects repayment reality. The good news? The industry remains well-covered for delinquency and has a strong net worth on average. The cushion is there to help struggling members at a time when banks or other financial institutions might turn them away.

No. 5: Now Is The Time To Build Capital And Invest Strategically

OPERATING EXPENSE RATIO VS. NET INTEREST MARGIN, ANNUALIZED
FOR U.S. CREDIT UNIONS
SOURCE: CALLAHAN & ASSOCIATES

• The gap between the net interest margin and the operating expense ratio is the widest it’s been in decades — a 0.33 percentage point spread that reflects the unusual and favorable environment credit unions have been operating in since rates began rising in 2022. For now, this margin cushion is providing real earnings flexibility.
• Even with slowing non-interest income revenue, and increasing provision expense, credit union ROA is up to 0.85% annualized. This is a relatively high return on assets, giving the industry some freedom to build allowance and net worth cushions.
• However, pressures are building from both directions. If rates ease, asset yields historically compress. Meanwhile, operating expenses rarely come down for long — technology investments, staff costs, and compliance burdens continue to climb with inflation. Credit unions that treat today’s margin environment as permanent could be caught off guard. In the meantime, the window to build capital, invest strategically, and reduce structural cost is still open. Effective investment in operational efficiency is a key way to manage expanding operating costs.

See the patterns behind this quarter’s trends. Trendwatch highlights key themes drawn from industrywide data. Peer Suite’s Premium level helps leaders evaluate their credit union’s performance across the same core metrics, using handpicked peer groups and deeper context to support understanding and discussion. Start your free 30-day trial.

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 second quarter of 2026.

The post 5 Takeaways From First Quarter Credit Union Performance Data appeared first on CreditUnions.com.

The latest credit union performance data is available now through Callahan’s FirstLook program, and Financial Performance Week on CreditUnions.com gives readers a look at the latest trends and their impact on your cooperative.

Backed by fresh Call Report data and Callahan’s peer-driven benchmarks, this week’s coverage goes beyond surface-level results to examine the forces reshaping balance sheets, member behavior, and long-term sustainability. The Callahan analyst team has been hard at work connecting 2025 performance outcomes to the strategic decisions credit unions will face in 2026, highlighting where pressure is building, where resilience is emerging, and what leaders should be watching most closely as conditions evolve.

In the days ahead, keep your eyes peeled for:

• How a declining interest rate environment could impact the credit union earnings model.
• Our two-part series on prices, including how affordability pressures are stifling household budgets and the direct impact that’s having on member behavior and the credit union bottom line.
• A look at the latest shifts in asset quality and one big, uncomfortable question: Are credit unions ready?

What about your credit union? What industry performance metrics are you keeping an eye on? Let us know how these trends are impacting your members and your credit union, and we might feature your story on CreditUnions.com.

The post The Numbers That Matter Most To Credit Unions appeared first on CreditUnions.com.

The first quarter of 2025 offered a sign that three years of gradual asset-quality deterioration could be slowing; however, subsequent quarters defied that narrative and moved asset quality squarely back into the spotlight for credit unions and regulators.

Although 2025 was not a record year for increases in delinquency, repayment rates did steadily worsen. The overall loan delinquency rate closed the year at 1.02%, the highest level since the third quarter of 2013.

It is not easy for credit unions to address worsening asset quality without making some tough decisions. Digging deeper into the delinquency and charge-off numbers reveals interesting dynamics in product performance by type. Some product repayment rates have stabilized; other products — including some not historically prone to delinquency — have risen in alarming fashion.

ASSET QUALITY RATIO
FOR U.S. CREDIT UNIONS
SOURCE: CALLAHAN & ASSOCIATES

Dig Deeper Into The Credit Union Loan Portfolio

• First Mortgages — Delinquency has dropped slightly to 0.89%, but that’s still high enough to worry credit unions. Homeownership is the foundation of financial health for many U.S. households, and first mortgages are typically the last product to report higher delinquency.  When faced with tough budgetary choices, members usually opt to pay their mortgages before all other debts.
• Other Real Estate — Delinquency has increased to 0.78%. These loans are mostly HELOCs, which have dramatically increased in popularity in the past few years. Many homeowners have tapped into increased home equity to pay for purchases large and small or, more recently, to consolidate other debt. Other real estate net charge-offs remain microscopic, but they have increased 3 basis points annually to 0.05%.
• Commercial — Delinquency fell slightly on the quarter to 0.96%. This is down from last quarter but is 12 basis points higher than one year ago. Commercial lending might not be the priority of many credit union lending programs; however, it has grown as a percentage of credit union portfolios, which makes the rise in delinquency more troubling. Just as troubling is the multi-year increase in net charge-offs, jumping from a low of 0.02% in the first quarter of 2023 to 0.23% in the fourth quarter of 2025.
• Auto — On the brighter side, total auto delinquency held steady year-over-year at 0.96%, a welcome sign following the significant increases in auto delinquency that began in 2022. Although delinquency rates have not returned to pre-COVID levels, the fact total auto delinquency has increased just 6 basis points in the past two years is a welcome reprieve after it increased 48 basis points in the preceding two-year period.
• Credit Cards — Credit card delinquency stayed flat year-over-year, at 2.15%, a positive sign for credit unions and their members. Although steady credit card delinquency often suggests net charge-offs are increasing, this does not seem to be the case this time. Net charge-offs on credit cards have flatlined as well; beginning in 2024, they’ve held steady around 5.00%.

Ready To Read The Full Story? Callahan clients can access the full version of this article right now on the client portal. Read it today. Not yet a client but looking for expert insights to help you adapt to change, develop your organization’s leaders, and stay at the forefront of industry trends? Connect with our team to learn more. 

The post Asset Quality Takes An Uncomfortable Turn In 2025 appeared first on CreditUnions.com.

How did all of this play out in the fourth quarter? Watch Callahan’s quarterly Trendwatch webinar to find out. For now, here are a few highlights.

Takeaway 1: Loan Activity Is Picking Up

YEAR-TO-DATE LOAN ORIGINATIONS
FOR U.S. CREDIT UNIONS
SOURCE: Callahan & Associates

• Loan-origination activity is accelerating faster than balances, a sign that rate cuts are encouraging would-be borrowers to get off the sidelines. The 22.95% jump in first-mortgage originations (along with other real estate originations rising 15.46%) indicates borrower engagement is returning even before balances fully reflect it. This pattern typically appears when consumers anticipate lower rates ahead and begin acting on pent‑up demand.
• HELOC balances rising 15.99% and commercial loans up 11.59% signals that borrowers are selectively re‑leveraging where they see value or necessity. While some loan categories are growing, auto remains stagnant, underscoring how that segment remains rate‑sensitive and price‑constrained.

Takeaway 2: Members Are Prioritizing Liquidity

12-MONTH GROWTH IN SHARE SEGMENTS
FOR U.S. CREDIT UNIONS
SOURCE: Callahan & Associates

• Share certificates are losing momentum and may unwind rapidly in 2026. Despite 6.71% growth, certificates are weakening as falling rates and tighter household budgets reduce appetite for termed commitments. With 83.3% of certificates maturing within a year, credit unions face a potential remixing event in 2026 that could pressure funding costs and liquidity planning if members continue favoring short‑term options.
• Money market accounts (up 9.01%) and share drafts (up 7.83%) are capturing the bulk of new deposits, reflecting households’ desire for flexibility amid economic uncertainty. This shift also suggests that consumers are keeping cash accessible as they wait for clearer signals on rates, inflation, and employment.

Trendwatch 4Q25. Explore fourth 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 2026, watch Callahan’s quarterly Trendwatch webinar.

Takeaway 3: Margins Might Be Nearing A Turning Point

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

• • With interest rate cuts already underway, the industry is likely approaching the top of the margin cycle. Assuming rates drift lower in 2026, asset yields should begin to compress, though deposit costs may remain sticky, especially if liquidity preferences persist. The next year will test how well credit unions have positioned themselves for a cooling margin environment.
  • Net income is rebounding sharply as margins stabilize at elevated levels. A projected 31.60% increase in net income — after a decline last year — highlights how effectively credit unions have capitalized on higher loan yields throughout 2025. With ROA at 0.79% and NIM holding near 3.40%, the industry is enjoying a rare window where funding costs and operating expenses have plateaued, allowing more revenue to flow directly to the bottom line.

Takeaway 4: Softer Membership Growth Could Preview Bigger Challenges

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

• Industrywide, growth has slowed to 2.01%, down from year end 2024, indicating credit unions are struggling to attract new members at the pace needed to sustain long term expansion. This deceleration raises questions about competitive positioning, digital acquisition strategies, and the industry’s ability to appeal to younger demographics.
• Slower member growth may limit future balance sheet momentum. To overcome this, credit unions may need to lean more heavily on deepening existing relationships rather than relying on new member inflows.

Takeaway 5: Asset Quality Is Still Troubling

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

• Delinquency has reached its highest level since 2013, signaling mounting household financial stress. Overall delinquency stands at 1.02%, a decade high threshold, reflecting the cumulative strain of inflation, high borrowing costs, and stagnant wage growth.
• Revolving credit is emerging as the pressure point, with credit card losses climbing. Credit card delinquency at 2.15% and net charge offs at 4.99% show that unsecured credit is absorbing the brunt of financial stress. Even with rate relief on the horizon, the data indicates that many households are already operating at the edge of their financial capacity.

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.

The post 5 Takeaways From Trendwatch 4Q25 appeared first on CreditUnions.com.

The Innovation Series is celebrating 2026 with a diverse slate of finalists whose breakthroughs are reshaping member experience, data and business intelligence, lending, employee engagement, fraud prevention, and digital member engagement — all with the power to help credit unions thrive in a rapidly evolving marketplace. Register for the Innovations In Reimagining The Lending Experience webinar  on Thursday, March 12th at 2PM EST.

Read on to learn more about this year’s finalists in lending:  Cloudvirga, Enable Technologies, Fuse, Suntell.

Cloudvirga:

Describe your Innovation:

Tropos is a configurable loan point-of-sale (POS) platform that sits in front of the loan origination system, connecting the core and third-party services through a unified, API-driven experience. The platform manages borrower and sales staff interactions, data intake, document collection, and real-time validations while seamlessly passing clean, structured data into the LOS. By acting as an intelligent engagement and integration layer, Tropos improves data quality, reduces rework, and enables credit unions to deliver faster, more consistent digital lending experiences without modifying their core or downstream systems.

What opportunity or challenge does it address?

Credit unions face increasing pressure to deliver modern, digital-first lending experiences while operating on fragmented legacy systems that were not designed to work together across all loan types (residential mortgage, consumer, auto, etc). Disconnected cores, LOS platforms, and third-party services often create inconsistent member experiences, duplicate data entry, and operational inefficiencies that slow decisioning and funding. Tropos addresses this challenge by acting as a flexible point-of-sale layer that unifies borrower and staff interactions, standardizes data capture, and integrates seamlessly with existing systems — allowing credit unions to modernize lending experiences, improve data quality, and scale efficiently without costly core or LOS replacements.

How does it increase member value?

Tropos increases member value by removing friction from the lending experience and giving members a faster, more transparent path from application to funding. By unifying data capture, document collection, and third-party integrations within a single point-of-sale experience, Tropos reduces repetitive questions, minimizes errors, and shortens turnaround times. Members benefit from intuitive digital interactions, real-time status visibility, and fewer follow-ups — while credit unions deliver a consistent, high-quality experience that reinforces trust, loyalty, and long-term member relationships.

What differentiates this innovation from competitors?

Tropos is differentiated by its role as a true system-agnostic point-of-sale layer that decouples the member experience from the underlying LOS, core, and third-party providers. Unlike POS solutions that are tightly coupled to a single LOS or require time-consuming and expensive customization, Tropos uses easily configurable workflows, API-driven integrations, and real-time customizations to adapt to each credit union’s existing ecosystem. This allows credit unions to modernize the member experience, maintain flexibility to change downstream systems, and avoid vendor lock-in—while preserving control over data, compliance, and operational processes.

Enable Technologies:

Describe your innovation.

Enable is redefining origination by bringing deposits and loans together on a single, AI-driven platform. We’ve built a unified experience that works seamlessly across digital, branch, and call center channels, powered by AI that guides both end users and frontline staff in real time. It’s not incremental improvement but rather it’s a fundamental shift in how financial institutions originate full long-lasting relationships.

What opportunity or challenge does it address?

For years, credit unions have been forced to operate with fragmented systems. One for deposits, another for lending, whereby creating friction for members, staff, and operations teams. Enable eliminates that disconnect. We address the growing need for speed, simplicity, and intelligence while helping institutions keep pace with rising expectations, compliance complexity, and competition from larger banks and fintechs.

How does it increase member value?

Members and business owners get faster decisions, fewer handoffs, and a more intuitive experience whether they’re opening an account, applying for credit, or bundling products in a single journey. Behind the scenes, AI helps surface the right products, answers questions instantly, and reduces errors which ultimately translates into better service, stronger relationships, and higher satisfaction.

What differentiates this innovation from competitors?

Most platforms still treat deposits and loans as separate workflows. Enable was built from day one as a unified platform with AI embedded at the core – not bolted on. As a member of the executive leadership team, I’ve had the great privilege of seeing Enable evolve rapidly alongside our amazing client partners — such as Nuvision Federal Credit Union ($3.9B, Huntington Beach, CA) and Meriwest Credit Union ($2.1B, San Jose, CA) — incorporating real-world feedback into smarter automation, conversational AI, and flexible configuration. That pace of innovation and our ability to deliver value quickly is what truly sets Enable apart. What further differentiates Enable is the experience behind the platform. Our founders and executive leadership team bring decades of hands-on experience partnering with more than 50+ credit unions with a proven track record of delivering on commitments and turning vision into reality. That history of execution exellence and the long-standing trust we’ve built with innovative credit union partners is something we take great pride in and continue to earn every day.

Fuse:

Describe your Innovation:

Fuse is an AI native loan origination system (LOS) and account opening (AO) for credit unions and other consumer lenders. Fuse is backed with $25M+ from the top-tier investors behind Chime and Alloy, being used by 100+ institutions including Navigant Credit Union ($4.1B, Smithfield, RI) and is the one LOS that FIS re-sells to top 50 banks (selected after reviewing 10+).

Credit unions need to automate to compete with the fintechs and top 10 banks. All traditional LOSs say their platform can deliver “up to 100% automation,” but since that has not materialized in decades, credit unions are rightfully skeptical. This is why Fuse sells its proactive automation money-back guarantee:

• Proactive: Many CUs stall on automation because their staff is overwhelmed with the needs of the day to day. We know people are 71% more likely to go to the gym if there’s a personal trainer nudging them, and Fuse implemented a similar nudge. Every two weeks, the CU meets with a Fuse automation specialist who showcases the automation opportunities identified by our Proactive AI Lending Copilot, and the aligned automations get implemented by either Fuse’s team or the CU. The goal is to get 1%+ more automated every week, leading to >60% true improvements year on year.
• Money-Back Guarantee: CUs are skeptical of being promised opportunities that then do not materialize. That is why Fuse implemented the first industry money-back guarantee in both product capabilities and company practices. Our contract incorporates guarantees so they do not need to rely on salesmanship or nice words. Some examples:
  • Product Capabilities: The system is able to decision on 100% of their core data and board 100% clean applications to their core without post-boarding clean up. The system can lead to 100% auto-decision based on any field or source of data.
  • Company Practices: Integrations are free forever (install and maintain), can be self-built by the client in a 100% open ecosystem or built by Fuse with a guarantee of delivery in under one month, and can be bought directly from partners rather than through mark-ups of up to 2x.
  • Implementation risk coverage: Fuse deploys its own team to run the full implementation rather than relying on CU staff, and assumes the risk on timelines by tying commercial commitments to agreed go-live dates, including covering additional costs from the prior LOS if those contracts need to be extended.
  • Ongoing improvements: After go-live, Fuse contractually commits to meeting every two weeks to review and implement new automation opportunities and provides real-time chat support with short SLAs and an assigned team that knows the institution’s configuration and can unblock issues quickly.

What opportunity or challenge does it address?

The core issue is automation skepticism arising from failed vendor promises, forcing CUs into costly manual processes that hinder staff focus and member experience. Fuse counters this with an AI-native LOS platform offering proactive automation with a money-back guarantee. This shifts risk to Fuse, ensuring guaranteed, measurable improvements in efficiency, staff utilization, and member satisfaction through modern technology.

How does it increase member value?

• Streamlined process with no rekeying: Fuse pulls data directly from the core, so members are not asked to enter the same information twice.
• Flexible channel hopping: Members can start an application online and finish it in the branch, or the other way around, without losing progress.
• More valuable staff interactions: With staff work reduced two- or three-fold, employees can focus their time and energy on sharing advice and cross-promotions.

What differentiates this innovation from competitors?

• • Model: Legacy LOS deliver a system, then rely on tickets and internal bandwidth. Fuse takes ownership for automation outcomes, not just feature delivery.
  • Technology: Our AI copilot continuously scans underwriting and funding workflows in production to surface concrete automation opportunities. Institutions can move toward near-total automation while setting their own pace and risk thresholds.

• Operating cadence: Every two weeks, our team meets with the credit union, reviews real data and brings specific rule, workflow and integration changes, then helps implement them so improvements actually go live.
• Alignment with credit unions: We do not charge for integrations and keep an open ecosystem, so credit unions can use the partners and tools they prefer without extra friction or hidden costs.

Suntell:

Describe your Innovation:

Square 1 Credit Suite is Suntell’s purpose-built credit lifecycle platform for member business lending at credit unions. It was designed specifically to help institutions bring MBL in-house and scale it responsibly, rather than relying on adapted bank systems, outsourced workflows, or external decisioning models.

Square 1 standardizes how business credit is evaluated, documented, and reviewed, allowing lending teams to make faster loan decisions while maintaining consistent credit standards. By creating clarity across lenders, reviewers, and leadership, credit unions are better able to explain decisions, support exam expectations, and deliver a more predictable experience for business members.

The innovation behind Square 1 is its focus on credit discipline as a growth enabler. Credit unions retain ownership and control of their lending process, enabling them to modernize MBL operations in a way that strengthens member relationships rather than outsourcing them.

What opportunity or challenge does it address?

Credit unions face increasing demand for member business lending, but many struggle to grow MBL without slowing decisions or losing consistency. Manual processes, fragmented tools, and lender-to-lender variability often lead to longer turnaround times and difficulty clearly explaining outcomes to members, boards, and examiners.

To manage this complexity, institutions often rely on manual workarounds, spreadsheets, email-driven processes, or disconnected systems to bridge gaps in the lending process. While these approaches can help in the short term, they can limit control, reduce transparency, and make it difficult to scale MBL in a sustainable way.

Square 1 addresses this challenge by giving credit unions a structured framework to manage business credit internally. The opportunity it unlocks is responsible growth. Institutions can move faster, maintain disciplined credit standards, and deliver more consistent experiences for business members without introducing unnecessary complexity.

How does it increase member value?

Square 1 increases member value by improving how credit unions respond to business lending requests. By standardizing credit analysis and credit file content, lending teams reduce rework and delays, resulting in faster loan decisions and clearer communication with members.

For business members, this creates a more predictable and transparent experience. Decisions are based on consistent credit standards rather than individual interpretation, which builds trust and confidence in the credit union as a reliable financial partner. Members spend less time waiting for updates and more time focusing on their businesses.

By enabling credit unions to manage member business lending internally, Square 1 also strengthens long-term relationships. Credit unions maintain direct ownership of decisions and outcomes, allowing them to support local businesses with dependable access to credit while staying true to their cooperative mission.

What differentiates this innovation from competitors?

Square 1 is differentiated by how it aligns with the operational reality of member business lending at credit unions. In many institutions, MBL teams operate with distinct workflows and priorities that differ from enterprise-wide banking systems.

Square 1 was designed to deliver value within that environment by providing a cohesive credit lifecycle framework for underwriting, credit file consistency, and portfolio oversight. Institutions are able to improve credit discipline and decision speed without first undertaking complex, enterprise-scale integration projects.

This allows credit unions to strengthen member business lending without overengineering their technology environment. Teams can focus first on credit consistency, decision quality, and adoption, while maintaining flexibility to evolve processes and integrations over time as needs change.

Check Out The Other Innovation Series Categories

• Employee Enablement
• AI-Powered Member Experience
• Data And Decision Intelligence
• Fraud Prevention And Resolution
• Digital Member Engagement

The post Meet The Finalists For The 2026 Innovation Series: Reimagining The Lending Experience 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.

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Chief financial officers, revenue gurus, budget hawks, numbers guys and gals — this week’s for you.

Credit union leaders take a close look at the numbers every day, but it’s not always easy to see the forest for the trees. That’s where Callahan comes in.

This week is Financial Performance Week on CreditUnions.com, presented by the analysts at Callahan & Associates. This series helps leaders interpret data to drive smarter decisions and uncover new approaches to measure performance. We’re taking a wide-angle look at industry performance in the days ahead. Data, numbers, analysis — we’ve got it all. Keep your eyes peeled for:

• What’s behind the slowest member growth in more than a decade.
• The factors behind rising operating expenses.
• A deep dive on asset quality. Spoiler alert: First quarter gains might have been more mirage than momentum.
• How to interpret competing economic narratives about the broader U.S. economy.
• Plus, updates to Callahan’s quarterly market snapshot and more.

Now it’s your turn. What data are you following most closely? What factors are you watching as you consider how to best manage the balance sheet and position your shop for growth? Drop us a line, and we might feature your story on CreditUnions.com.

The post Calling All CFOs 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 At Mid-Year 2025 appeared first on CreditUnions.com.

Takeaway 1: Member Growth Lags Prior Quarters

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

• Credit union member growth slowed to 2.0% in the second quarter. After pumping the brakes on indirect channels, credit unions are redirecting limited resources to attract members organically. As such, member growth has dipped to a level not recorded in more than a decade.
• Credit unions have pulled back from indirect lending, which shrunk 1.2% year-over-year. It comprised just 20.2% of the loan portfolio at midyear, down from a high of 22.4% two years ago.

Key Takeaway 2: Member Growth Is Weak In Pockets

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

• Slowing member growth was not as weak across the nation as it was in select regions. The Midwestern Rust Belt states of Ohio, Indiana, and West Virginia reported weaker membership growth.
• Meanwhile, the South is uneven, with states like South Carolina and Alabama losing membership even as states like Florida and Tennessee added them. The West was also particularly strong. Utah, Oregon, Idaho, and California all reported above-average membership growth.

Trendwatch 2Q25. Explore second 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 today.

Takeaway 3: Core Members Are Deepening Relationships

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

• • Core members have gradually brought more to their credit union relationship, especially in shares. During the past calendar year, members increased their average balances $435, or 3.2%.
  • Second quarter data, however, tells a story about member relationships and loans. Although the average share balance fell $24 in the past three months, the average loan balance jumped $134. Notably, mortgages grew 25.5% year-over-year and credit unions originated more this quarter than any since the third quarter of 2022.

Takeaway 4: Share Growth Trends Reflect New Needs

SHARE GROWTH AND PERSONAL SAVINGS RATE
FOR U.S. CREDIT UNIONS
SOURCE: Callahan & Associates

• The personal savings rate picked up again in the second quarter. At 4.5%, it was the highest savings rate in the U.S. economy in a year. Meanwhile, credit union members have socked away shares in their cooperative at a rate not recorded since the third quarter of 2022.
• Increased savings is a positive attribute of personal finance; however, it portends a shaky time for the U.S. economy. Facing a weakening job market and increasing anxiety levels, a savings cushion should help members weather any potential headwinds.

Takeaway 5: Income Grows As Expenses Stay Flat

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

• Credit union margins in the second quarter jumped mightily and hit 3.32% on net. Why? Interest income increased to 5.15% of average assets yet interest expenses stayed roughly the same — 1.83%. Cost of funds also was relatively calm. That stood at 2.06% in the second quarter.
• At the same time, operating expenses continued the steady climb of the past three years. As a result, return on assets increased 8 basis points quarter-over-quarter to land at 0.75%.

Let’s Review Your Credit Union Performance Data Together. Join a Callahan consultant 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.

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