With the NCUA’s September 30, 2025 Call Report, Catalyst ALM experts now have a clear picture of the credit union industry’s performance through the third quarter. As of September 30, 4,401 call reports have been submitted, down slightly from 4,460 on June 30.

CU balance sheets

Looking at the trends over 2025, asset and deposit growth continues to soften.  After a strong first quarter, both have steadily slowed as the year has progressed. 

•  Asset growth for 2025 declined from an annualized pace of 10.95% on March 31 to 5.79% on September 30. 
• Deposit growth fell from an annual pace of 13.07% to 5.62% over the same period. 
•  External funding (i.e., borrowings and non-member deposits) grew 5.22%, notably below 2023–2024 levels.

Loan growth 

Loan growth, however, has strengthened throughout the year, rising from 2.57% in March to an annualized rate of 5.20% at the end of Q3, just below the pace of deposit growth. Real estate loans, first lien, second lien and commercial, are leading the advance. Net worth growth of 7.69% exceeded asset growth of 5.79%, which increased the industry’s net worth ratio to 11.19%. 

Liquidity

Liquidity remains solid. External funding has  eased, while cash and short-term holdings remain healthy at 11.93% of assets as of September 30, down from 13.42% in March but still strong. This allocation may place downward pressure on earnings as the FOMC lowers the Fed funds rate and markets anticipate further cuts in the next year. Although loan growth is advancing, it remains below deposit growth, further alleviating liquidity concerns. 

Loan quality

Delinquencies have edged lower from 0.99% at year-end 2024 to 0.96% on September 30, though still higher than 0.80% in Q1. Net charge-offs continue to improve, falling from 0.82% in March to 0.77% in Q3. Overall, loan performance remains stable and well within manageable levels.

Earnings

Earnings improved over the course of 2025, with ROA rising to 0.81%, compared to 0.76% in Q2 and 0.67% in Q1. Asset yields have steadily advanced in both investment and loan yields, while the cost of funds has remained steady near 1.84%. Provision expense rose a mere three basis points since March 31 to 0.59%. This has been offset in equal magnitude by the three basis point decline in net operating expense to 1.98%. 

Looking Ahead

Catalyst ALM experts are helping credit unions interpret these trends and position for a shifting rate environment.

Turn today’s data into tomorrow’s strategy, contact our ALM team to  get started.