California Credit Unions

Member engagement deteriorated further in 2026-Q1. Member growth decelerated to -0.52% from -0.39% in 2025-Q4 — a -0.13 pp QoQ slide — and represents a dramatic reversal from the +3.02% recorded in 2025-Q1, a -3.55 pp year-over-year decline. The editorial read is clearly negative: California CUs are losing members at an accelerating pace on both timeframes. The one relative bright spot is that the cohort's -0.52% still stands 12 basis points above the national benchmark of -0.65%, suggesting industry-wide headwinds are at play, but California is not immune.

Profitability delivered a mixed signal in 2026-Q1. ROA decreased to 0.46% from 0.57% in 2025-Q4 — a -0.11 pp quarterly drop — though it held near the 0.47% recorded in 2025-Q1, marking a stable year-over-year picture with only a -0.008 pp change. NIM improved in both timeframes, rising 7 bps QoQ from 3.32% and 17 bps YoY from 3.22%, reaching 3.39% — yet still 31 bps below the national 3.70%. Fee income fell sharply, decreasing from 145.40% to 128.35% QoQ, though it remains 12.17 percentage points above the national 116.17%. Margin expansion has yet to translate into sustained earnings improvement.

Growth dynamics in 2026-Q1 were bifurcated. Asset growth decelerated to 2.17% from 3.00% in 2025-Q4 (-0.83 pp QoQ), though it accelerated dramatically versus the 0.07% recorded in 2025-Q1 (+2.10 pp YoY), remaining slightly below the national 2.64%. Loan growth accelerated to 1.67% from 1.54% in 2025-Q4 (+0.13 pp QoQ), outpacing the national benchmark of 0.31% by a substantial 1.36 percentage points. The deceleration in assets alongside robust loan expansion suggests California CUs are deploying capital productively, though sustaining this pace amid membership contraction will require careful management.

The risk profile of California CUs improved modestly in 2026-Q1 on most fronts. Delinquency decreased to 0.55% from 0.64% in 2025-Q4 (-0.09 pp QoQ), a meaningful improvement, though it is essentially stable versus the 0.51% in 2025-Q1 (+0.04 pp YoY). At 0.55%, the cohort sits a favorable 23 bps below the national 0.78%. Net worth was stable QoQ at 11.94% versus 11.95% in 2025-Q4 (-0.01 pp), but increased 0.52 pp from 11.42% in 2025-Q1. Despite year-over-year capital accumulation, net worth remains 1.68 percentage points below the national 13.61%, a structural gap warranting attention.

California CUs carry a distinctly mortgage-heavy portfolio. First mortgage concentration stands at 32.84% in 2026-Q1, up 0.38 pp year-over-year and nearly 10.69 percentage points above the national 22.15%, reflecting the state's elevated housing market exposure. Indirect auto concentration edged down 0.79 pp YoY to 9.02%, modestly above the national 7.73%, suggesting a deliberate pullback from that channel. Share certificate concentration rose 0.64 pp YoY to 21.63%, now 1.83 percentage points above the national 19.80%, indicating members are locking in rates — a deposit mix shift with potential cost implications as the rate environment evolves.