Tennessee Credit Unions

Member engagement deteriorated in Q3 2025, with growth decelerating to -0.71% from -0.38% in Q2 2025, marking a significant decline from positive 1.47% growth a year ago. The current member loss rate of 0.71% trails the national decline of 0.61% by 10 basis points, indicating Tennessee credit unions face greater membership retention challenges than peers.

Profitability showed mixed signals with ROA remaining stable at 0.76% from 0.74% in Q2 2025, though down from 0.85% a year ago. Net interest margins strengthened to 3.85% from 3.79% quarterly and 3.68% annually, exceeding the national benchmark by 12 basis points. The margin expansion partially offset year-over-year ROA pressure from operational headwinds.

Growth momentum weakened across key metrics in Q3 2025. Asset growth decelerated to 2.22% from 2.91% in Q2, trailing the national rate by 33 basis points. Loan growth accelerated to -0.95% from -1.26% quarterly but remains deeply negative, lagging national growth of 0.20% by 115 basis points. Deposit growth decelerated to 1.62% from 2.29% quarterly.

Risk metrics showed deterioration with delinquencies rising to 0.88% from 0.82% in Q2 2025 and 0.70% a year ago, now 3 basis points above the national rate. Net worth ratios remained stable at 14.83% from 14.79% quarterly and strengthened from 14.71% annually, providing a 115 basis point capital cushion above national levels.

Portfolio composition shifted toward higher-yielding assets with certificate concentrations rising to 22.27% from 21.92% quarterly and 20.88% annually, exceeding national levels by 267 basis points. First mortgage exposure increased to 20.94% from 20.11% year-over-year, while indirect auto lending remained modest at 6.93%, below the national 7.90% benchmark.