Arkansas Credit Unions

Member engagement deteriorated materially in Q1 2026. Member growth decelerated to -1.65%, worsening from -0.68% in Q4 2025 — a 0.97 pp quarter-over-quarter decline. The year-over-year comparison is starker: in Q1 2025, member growth stood at a positive 2.49%, representing a 4.14 pp swing into contraction. The cohort now sits 1.00 percentage point below the national benchmark of -0.65%, meaning Arkansas credit unions are losing members at a faster rate than the industry average. Reversing this trajectory will require targeted outreach and value-proposition reinforcement.

Profitability delivered a mixed signal in Q1 2026. ROA decreased to 0.53% from 0.76% in Q4 2025, a 0.23 pp quarter-over-quarter decline, though it remains 0.07 pp above the 0.46% recorded in Q1 2025 — a modest year-over-year improvement. NIM decreased to 3.99% from 4.22% last quarter and from 4.24% a year ago, yet still sits 29 bps above the national 3.70%. The efficiency ratio is the sharpest concern, increasing to 83.55% from 79.45% in Q4 2025 and surging 19.07 pp above Q1 2025's 64.48%, now 4.47 pp worse than the national benchmark of 79.08%.

Growth decelerated across both assets and loans in Q1 2026. Asset growth decelerated to 1.35% from 1.51% in Q4 2025 — a 0.16 pp quarter-over-quarter slowdown — and marks a sharp deceleration from 8.19% in Q1 2025, a 6.84 pp year-over-year drop that leaves the cohort 1.29 pp below the national benchmark of 2.64%. Loan growth turned negative at -1.58%, decelerating 1.19 pp from Q4 2025's -0.39%, and now trails the national rate of 0.31% by 1.89 pp. Contracting loan balances alongside slowing asset growth signal constrained balance sheet momentum heading into mid-2026.

The risk profile showed genuine improvement in Q1 2026, offering one of the few constructive signals in the report. Delinquency decreased to 0.93% from 1.14% in Q4 2025, a 0.21 pp quarter-over-quarter decline, and fell further from 1.29% in Q1 2025 — a meaningful 0.36 pp year-over-year reduction. Despite this progress, the cohort remains 15 bps above the national benchmark of 0.78%, indicating continued credit stress relative to peers. Net worth decreased slightly to 17.13% from 17.36% in Q4 2025 but is essentially stable versus Q1 2025's 17.16% (-3 bps), and remains a strong 3.51 pp above the national 13.61%.

Portfolio composition shifted modestly in Q1 2026. First mortgage concentration increased to 9.04% from 8.90% in Q4 2025 (+0.14 pp QoQ) and from 8.08% in Q1 2025 (+0.96 pp YoY), yet remains far below the national benchmark of 22.15%, suggesting limited real estate lending exposure. Indirect auto concentration decreased to 2.36% from 2.47% in Q4 2025 (-0.11 pp QoQ) and from 3.06% a year ago (-0.70 pp YoY), well below the national 7.73%. Share certificate concentration dipped to 15.40% from 15.58% in Q1 2025 (-0.18 pp YoY), trailing the national 19.80%, indicating a relatively lower reliance on term deposit funding.