Kentucky Credit Unions

Member engagement remains the cohort's most persistent challenge. In Q2 2026, member growth stood at -0.68%, marking the eighth consecutive quarter of negative membership since Q3 2024, when the last positive reading of +0.14% was recorded in Q2 2024. That said, the trajectory is improving: the rate accelerated from -1.27% in Q1 2026 (QoQ) and from -0.78% in Q2 2025 (YoY). The cohort is now essentially in line with the national benchmark of -0.69%, trailing by just 1 basis point — a notable narrowing relative to recent quarters.

Profitability surged in Q2 2026, with ROA rising to 0.86% from 0.60% in Q1 2026 — a 0.26 pp quarterly gain — and up 7 bps from 0.79% in Q2 2025, placing Kentucky CUs just 3 bps below the national benchmark of 0.89%. Net interest margin held stable quarter-over-quarter at 3.65% versus 3.61% in Q1 2026 (a modest 4 bps uptick), while improving 8 bps year-over-year from 3.57% in Q2 2025. NIM remains 9 bps below the national 3.74%, suggesting continued room for margin optimization as the rate environment evolves.

Asset growth remained steady in Q2 2026 at 2.62%, virtually unchanged from 2.67% in Q1 2026 (stable, -5 bps QoQ) and extending a positive streak now nine consecutive quarters since Q2 2024. Year-over-year, however, asset growth decelerated from 3.19% in Q2 2025, a -0.56 pp slowdown. The cohort tracks nearly identically to the national benchmark of 2.63%, trailing by just 1 bp. Loan growth of 0.49% is stable QoQ from 0.51% in Q1 2026 but has accelerated sharply from -1.65% in Q2 2025 — a 2.15 pp swing — now in its second consecutive positive quarter and outpacing the national 0.22% by 28 bps.

The risk profile showed meaningful deterioration in Q2 2026. Delinquency rose to 0.87% from 0.68% in Q1 2026 — a 0.20 pp quarterly increase — and climbed 0.17 pp from 0.71% in Q2 2025, now essentially at the national benchmark of 0.88%. Offsetting this, net worth strengthened to 13.72% from 13.53% in Q1 2026 (+0.19 pp QoQ) and 13.58% in Q2 2025 (+0.14 pp YoY), though it remains 9 bps below the national 13.81%. The combination of rising delinquency and improving capital buffers presents a mixed but watchful risk picture heading into the second half of 2026.

Portfolio composition shifted notably in Q2 2026. Share certificates climbed to 23.06% from 22.79% in Q1 2026 (+0.27 pp QoQ) and from 21.84% in Q2 2025 (+1.22 pp YoY), standing 3.04 pp above the national 20.02% — signaling a pronounced member preference for rate-sensitive deposits. First mortgage concentration edged down to 22.86% from 23.43% in Q1 2026 (-0.56 pp QoQ) but rose 0.45 pp from 22.42% in Q2 2025, slightly above the national 22.22%. Indirect auto declined to 7.61% from 7.72% in Q1 2026 and from 8.07% in Q2 2025 (-0.46 pp YoY), modestly below the national 7.71%.