North Carolina Credit Unions

Member engagement deteriorated further in Q2 2026, with membership growth decelerating to -1.22% from -0.70% in Q1 2026 — now negative for two consecutive quarters after last turning positive in Q4 2025 at +0.08%. Year-over-year, the trend is equally concerning: membership contracted -1.22% compared to -0.69% in Q2 2025, a deceleration of 0.53 pp. The cohort now sits 53 basis points below the national benchmark of -0.69%, meaning NC credit unions are losing members faster than the industry average. Reversing this trajectory will require targeted acquisition and retention strategies.

Profitability improved sharply in Q2 2026. ROA rose to 0.82% from 0.58% in Q1 2026, a gain of 0.23 pp quarter-over-quarter, and surged 0.34 pp from 0.48% in Q2 2025 — a meaningful year-over-year recovery. The cohort now sits just 7 basis points below the national benchmark of 0.89%, a significant narrowing. Net interest margin remained stable at 3.95%, edging up just 5 bps from 3.90% in Q1 2026 and 3 bps from 3.92% in Q2 2025, while holding a 21 bps advantage over the national NIM of 3.74%. The NIM lead provides a durable earnings buffer.

Asset growth accelerated to 2.41% in Q2 2026, up from 1.60% in Q1 2026 (+0.81 pp QoQ) and from 1.67% in Q2 2025 (+0.73 pp YoY), marking six consecutive quarters of positive asset expansion since Q1 2025. The cohort trails the national asset growth rate of 2.63% by 22 basis points. Loan growth decelerated modestly to 0.51% from 0.70% in Q1 2026 (-0.20 pp QoQ), though it accelerated sharply from 0.05% in Q2 2025 (+0.45 pp YoY), extending a five-consecutive-quarter positive streak since Q2 2025 and outpacing the national loan growth of 0.22% by 29 basis points.

The risk profile is mixed but trending favorably on a year-over-year basis. Delinquency was stable at 0.97% in Q2 2026, essentially unchanged from 0.95% in Q1 2026 (+1 bps), but improved meaningfully from 1.25% in Q2 2025, a decrease of 0.29 pp — a clear positive signal. The cohort remains 9 basis points above the national delinquency benchmark of 0.88%. Net worth increased to 13.44% from 13.36% in Q1 2026 (+9 bps QoQ), though it decreased from 13.67% in Q2 2025 (-0.23 pp YoY) and trails the national benchmark of 13.81% by 37 basis points.

NC credit unions continued shifting toward first mortgage lending, with concentration rising to 31.60% in Q2 2026 from 31.33% in Q1 2026 (+0.28 pp QoQ) and from 29.44% in Q2 2025 (+2.16 pp YoY) — well above the national benchmark of 22.22%. Indirect auto exposure contracted to 4.64% from 4.91% in Q1 2026 (-0.27 pp QoQ) and from 5.27% in Q2 2025 (-0.63 pp YoY), remaining below the national 7.71%. Share certificate concentration edged up to 21.40% from 21.20% in Q1 2026 (+0.20 pp QoQ) and from 20.50% in Q2 2025 (+0.90 pp YoY), slightly above the national 20.02%.