Community Credit Unions

Member engagement showed mixed signals in Q4 2025. Member growth decelerated quarter-over-quarter from 0.79% to 0.57% but accelerated year-over-year from 0.26%, positioning Community CUs 1.27 percentage points above the national benchmark of -0.69%. However, the 0.57% average masks significant internal divergence, with 40% of institutions losing members while 60% post growth. This bifurcation suggests engagement strategies are working for the majority but failing to reach universal effectiveness across the tier.

Profitability strengthened meaningfully in Q4 2025. ROA remained stable quarter-over-quarter at 0.69% but increased substantially from 0.49% a year ago, reflecting 20 basis points of year-over-year improvement. NIM held steady at 3.42% from the prior quarter while climbing 26 basis points year-over-year from 3.16%. Community CUs lead the Large tier on NIM by 42 basis points (3.42% vs. 3.00%), though they trail the national average of 3.72%, though this premium raises questions about whether elevated margins reflect pricing power or reduced competitive intensity for growth-oriented members.

Growth momentum accelerated across key metrics in Q4 2025. Asset growth surged to 5.02% from 4.04% quarter-over-quarter and 2.17% year-over-year, outpacing the national benchmark by 1.91 percentage points. Loan growth accelerated to 4.63% from 4.36% in the prior quarter, significantly exceeding the national rate of 0.52%. Deposit growth remained stable at 4.80%, up marginally from 4.77% quarter-over-quarter and well above the national average of 2.57%. The strong growth trajectory demonstrates Community CUs' ability to expand despite competitive pressures.

Risk metrics remained well-controlled in Q4 2025. Delinquency rates held stable at 0.83%, up minimally from 0.79% quarter-over-quarter and 0.82% year-over-year, maintaining a 7 basis point advantage over the national benchmark of 0.90%. Net worth ratios stayed flat at 11.01% quarter-over-quarter but improved from 10.90% year-over-year. While risk management appears sound, the 2.66 percentage point gap below the national net worth average of 13.68% provides less capital cushion than peers for strategic investments or economic volatility.

Portfolio concentrations shifted modestly in Q4 2025. First mortgage exposure increased to 33.90% from 33.57% quarter-over-quarter and 33.17% year-over-year, significantly exceeding the national concentration of 21.97%. Certificate deposits reached 27.27%, down from 27.46% quarter-over-quarter but up from 26.87% year-over-year, well above the national level of 19.80%. Indirect auto lending decreased to 16.12% from 17.17% year-over-year while remaining above the national average of 7.78%. The elevated certificate concentration poses 2026 repricing risk as these deposits mature.