Data through September 30, 2023 . All figures reflect the universe of 4,745 federally insured credit unions reporting for the quarter. Income-based ratios (ROAA, NIM, NCO ratio) are annualized from 9-month YTD figures (×4/3). Growth rates are quarter-over-quarter.
Where the industry stands as of 9/30/2023:The credit union system reached $2.25 trillion in assets at the end of Q3 2023, up a modest 0.52% quarter-over-quarter — the second-weakest quarterly asset growth in the dataset (rank 28/29). The balance sheet is being pulled in opposite directions: loans grew 1.82% as origination activity held, but deposits declined for the second consecutive quarter (-0.07%), forcing institutions deeper into wholesale funding. Borrowings surged to $130.3 billion — up $9.9 billion in a single quarter and $48.6 billion (60%) above the year-ago level. NIM held steady at 2.99% annualized, unchanged from Q2, suggesting the margin compression that began in Q3 2022 may be stabilizing. But the credit quality picture is darkening: the 60+ day delinquency ratio jumped 9 basis points (bps) to 0.72%, the second-largest quarterly increase in the dataset, and the net charge-off ratio has now risen for seven consecutive quarters.
170 bps above the 7.00% well-capitalized threshold; second lowest in the dataset
Capital under continued pressure from unrealized losses:The system-wide net worth ratio edged down to 8.70% as of 9/30/2023, down 8 bps from 8.78% in Q2 and the second-lowest reading in the dataset (only Q3 2022's 8.55% was lower). Total equity declined $0.8 billion during the quarter as the Q3 bond market selloff (10-year Treasury yield rose from 3.81% to 4.57%) pushed unrealized losses on available-for-sale investment portfolios deeper. This is the mirror image of the investment gain recovery that would drive the Q4 2023 capital surge — but the system doesn't know that yet.
The over-$10B cohort sits at 8.05%, the thinnest in the system and only 105 bps above the well-capitalized threshold. The $500M–$1B tier at 8.59% is also uncomfortably close. Credit unions under $100M carry 12.02% — comfortable, but even this cohort has seen its ratio compress from the 13%+ levels of 2019.
Up 9 bps QoQ — second-largest quarterly increase in the dataset
The credit normalization accelerates:The 60+ day delinquency ratio climbed to 0.72% in Q3 2023, up 9 bps from 0.63% in Q2 — the second-largest quarterly jump in the dataset. This marks the second consecutive quarterly increase after the seasonal Q1 dip. Year-over-year, delinquency is up 19 bps from 0.53% in Q3 2022. The pace of the normalization from the 0.42% post-pandemic floor (Q1 2022) is now unmistakable: 30 bps of deterioration in six quarters, with no sign of plateau.
The over-$10B cohort crossed the 1.00% threshold at 1.03%, making these 22 institutions the first cohort in the dataset to breach that level. The spread between the over-$10B cohort and the system average widened to 31 bps. NCO (annualized) reached 0.54%, the seventh consecutive quarterly increase — a streak that now stretches from the 0.26% floor in Q3 2021. The NCO trajectory confirms that the delinquency pipeline is converting to realized losses at an accelerating rate.
NIM holds steady as asset repricing catches up to deposit costs:Annualized NIM printed at 2.99% in Q3 2023, unchanged from Q2. After six quarters of compression from the 3.13% peak in Q2–Q3 2019, the margin has stabilized — not yet recovering, but no longer contracting. The mechanism: newly originated loans at higher market rates are beginning to offset the repricing of the deposit base that has been compressing NIM since the Fed's hiking cycle began. ROAA continued its decline, falling to 0.75% annualized (down 4 bps QoQ), as provision expense and operating costs consumed the stabilizing margin.
Year-to-date net income of $12.6 billion through nine months trails the $14.0 billion reported through Q3 2022 by 10.0%. The earnings shortfall is structural: the rate environment repriced funding costs faster than asset yields could adjust, and credit costs are rising in parallel. The over-$10B and $1B–$10B cohorts lead ROAA at 0.76%, while the $500M–$1B tier lags at 0.65% — caught between the scale advantages of larger institutions and the lower cost structures of smaller ones.
The $1B–$10B tier's NIM of 2.79% is the system's weakest — 20 bps below the system average. This segment faces the most intense competitive pressure on both sides of the spread: deposit pricing pressure from larger institutions and online banks, and loan pricing pressure from banks and fintechs in the consumer and auto segments.
Decelerating from 2.21% in Q2 — ranks 23/29 in the dataset
Loan growth decelerates but outpaces deposit growth by a wide margin:System loans grew 1.82% QoQ in Q3 2023, a deceleration from Q2's 2.21% but still positive — and far above the anemic deposit growth that is forcing the funding mismatch wider. The over-$10B cohort led at 2.43%, followed by the under-$100M tier at 1.94%. The $500M–$1B and $1B–$10B cohorts posted 1.46% and 1.64% respectively.
The loans-to-assets ratio reached 71.26%, the second-highest reading in the dataset and up 92 bps from Q2. When loans grow at nearly 2% per quarter but assets barely grow at 0.52%, the balance sheet becomes increasingly loan-heavy — reducing the liquidity buffer available for unexpected deposit outflows or credit losses.
Up $9.9B QoQ and $48.6B (60%) YoY — the funding model under strain
Deposits decline again as the wholesale funding dependency deepens:Shares and deposits fell 0.07% QoQ — the second consecutive quarterly decline and the third decline in the last four quarters. The deposit drought is forcing institutions to lean harder on wholesale funding: borrowings surged to $130.3 billion, up $9.9 billion from Q2 and $48.6 billion (60%) above the year-ago level. FHLB advances, the NCUA Central Liquidity Facility, and brokered deposits are substituting for the member deposit growth that historically funded the credit union balance sheet.
The funding mismatch is the defining structural challenge of 2023. Loans continue growing at 1.5–2.5% per quarter while deposits are flat to negative. Every incremental dollar of loan funding must come from borrowings — which carry higher costs than member deposits and introduce rate-reset risk as short-term advances roll over at elevated rates.
The over-$10B cohort's loans-to-assets ratio of 73.29% is the highest in the system. The $1B–$10B tier at 72.82% is close behind. Both cohorts are operating near the upper bound of their historical range, leaving minimal liquidity flexibility for credit losses or unexpected deposit outflows.
Key CAMELS-aligned metrics by asset-size cohort for the quarter ending September 30, 2023. Income-based ratios annualized from 9-month YTD figures (×4/3). Growth rates are single-quarter (QoQ).
Standardized Data Table — CAMELS Metrics by Asset-Size Cohort, Q3 2023
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Standardized Data Table — CAMELS Metrics by Asset-Size Cohort, Q3 2023
This table is optimized for interactive viewing and is not included in the PDF. View the full data at finasense.com or in the accompanying spreadsheet.
Watch: Delinquency acceleration — The 60+ day ratio jumped 9 bps to 0.72%, the second-largest quarterly increase in the dataset. The over-$10B cohort breached 1.00% for the first time, reaching 1.03%. NCO has risen for seven consecutive quarters.
Watch: Wholesale borrowings surge past $130B — Borrowings rose $9.9 billion in a single quarter to $130.3 billion — up 60% YoY. Deposits declined for the second consecutive quarter (-0.07%), deepening the funding mismatch.
Watch: NIM stabilizes at 2.99% — After six quarters of compression from the 3.13% pre-pandemic peak, NIM held flat QoQ. Asset repricing is beginning to offset deposit cost increases. Whether this is a stabilization or a pause before further compression is the key question entering Q4.
Watch: Capital remains near dataset lows — Net worth ratio at 8.70% is the second-lowest in the dataset, as unrealized investment losses continued to weigh on equity. The over-$10B cohort at 8.05% sits only 105 bps above the well-capitalized threshold.
Watch: Loans-to-assets at second-highest in dataset — At 71.26%, the balance sheet is more loan-heavy than at any point except Q4 2018 (71.76%). Limited liquidity buffer as deposit growth remains negative.
This report is provided for informational and educational purposes only and does not constitute investment, legal, regulatory, or examination advice, nor should it be relied upon as the basis for any decision.
FINASENSE is not affiliated with the National Credit Union Administration (NCUA). Financial data is sourced from NCUA 5300 Call Report filings as submitted by individual credit unions and is not guaranteed as to accuracy or completeness. Ratio definitions and account classifications reference the NCUA Financial Performance Report (FPR) Chart of Accounts. All aggregation, analysis, and derived metrics are independently computed by FINASENSE and may differ from NCUA-published figures. Interpretations reflect the views of FINASENSE and not those of the NCUA.
This report does not consider the specific circumstances of any individual credit union and is not tailored advice. FINASENSE has no financial relationship with, and receives no compensation from, any institution referenced.
All information is provided "as is," without warranty of any kind, and FINASENSE disclaims liability for any decisions made in reliance on this report. Historical metrics are not indicative of future financial condition. This report is proprietary to FINASENSE, a publication of IP Foundries, LLC (Arizona), and may not be reproduced, distributed, or reused without prior written consent.
