Alabama Credit Unions

Member engagement deteriorated further in Q2 2026, with member growth decelerating to -0.98% from -0.18% in Q1 2026 — a 0.80 pp swing — and deepening from -0.42% recorded in Q2 2025 (a 0.56 pp YoY decline). This marks the third consecutive quarter of negative member growth, with the last positive reading of +0.16% occurring in Q3 2025. At -0.98%, Alabama credit unions now trail the national benchmark of -0.69% by 28 basis points, suggesting the state's membership contraction is outpacing broader industry headwinds. Reversing this trend is the cohort's most pressing strategic vulnerability.

Profitability was the clear bright spot in Q2 2026. ROA increased to 0.95% from 0.68% in Q1 2026, a gain of 0.27 pp quarter-over-quarter, and climbed 0.23 pp from 0.73% in Q2 2025 — placing Alabama credit unions 6 basis points above the national benchmark of 0.89%. Net interest margin held stable at 3.65%, edging up just 3 bps from Q1 2026 and 5 bps from Q2 2025, though it remains 9 bps below the national NIM of 3.74%. The ROA outperformance signals strong earnings discipline even as NIM lags the national average.

Balance sheet expansion accelerated in Q2 2026. Asset growth reached 3.44%, up from 3.32% in Q1 2026 (+0.13 pp QoQ) and sharply higher than 1.64% in Q2 2025 (+1.80 pp YoY), extending a positive streak now in its ninth consecutive quarter since Q2 2024 — and sitting 81 bps above the national 2.63%. Loan growth, while still positive at 0.45%, decelerated from 1.40% in Q1 2026 (-0.95 pp QoQ), though it accelerated from a near-flat 0.05% in Q2 2025 (+0.40 pp YoY). Loan growth has now been positive for five consecutive quarters since Q2 2025, outpacing the national 0.22% by 23 bps.

The risk profile is mixed in Q2 2026. Delinquency held stable at 0.82%, essentially unchanged from 0.84% in Q1 2026 (-2 bps) and meaningfully improved from 0.95% in Q2 2025 (-0.14 pp YoY), sitting 6 bps below the national 0.88%. Charge-offs, however, increased to 0.43% from 0.38% in Q1 2026, a rise of 5 bps quarter-over-quarter, now 5 bps above the national 0.38%. Net worth decreased to 15.43% from 15.82% in Q1 2026 (-0.39 pp QoQ) and from 15.81% in Q2 2025 (-0.39 pp YoY), yet remains a substantial 1.62 percentage points above the national 13.81%, providing a strong capital buffer.

Portfolio composition shifted modestly in Q2 2026. Share certificates rose to 21.79% from 21.33% in Q1 2026 (+0.46 pp QoQ) and from 20.42% in Q2 2025 (+1.36 pp YoY), now 1.77 pp above the national 20.02%, signaling sustained member preference for fixed-rate savings. First mortgage concentration edged down to 21.80% from 21.94% in Q1 2026 (-0.14 pp QoQ) but increased from 21.06% in Q2 2025 (+0.74 pp YoY), remaining just below the national 22.22%. Indirect auto held at 5.21%, up 6 bps from Q1 2026 but down 0.27 pp from Q2 2025, well below the national 7.71%.