The U.S. credit union industry exhibited its flexibility and strength to serve members in first-quarter 2025 as liquidity borrowings normalized, deposit growth started trending up, loan growth slowed, non-interest income declined, and return on assets (ROA) remained in a narrow range.

This week’s Callahan and Associates’ TrendWatch webinar revealed these and additional trends. You can view the presentation slides here or the recording/recap video here.

From March 31, 2024 – March 31, 2025 (year-over-year unless otherwise noted), U.S. credit unions experienced the following loan, deposit, investment, asset, liquidity, capital, and earnings activity that industry leaders can use as they strategically operate within the current environment:

U.S. Industry Highlights (Annualized)

By the first quarter of 2025:

• Deposits reached $2.04 trillion (a new record), rising 4.6 percent (compared to 2.4 percent in the year-ago period prior).
• Assets reached $2.4 trillion (a new record), rising 2.7 percent (compared to 4.3 percent in the year-ago period prior).
• Loans reached a record $1.67 trillion, rising 3.4 percent (compared to 4.6 percent in the year-ago period prior).
• Investments (including cash) reached $615 billion, rising 0.4 percent (compared to 2.5 percent in the year-ago period prior).
• Capital (retained earnings for net-worth purposes) rose to $259 billion, increasing 10.3 percent (compared to 8.6 percent in the year-ago period prior).
• Membership reached a record 144.8 million, rising 2.2 percent (compared to 2.7 percent in the year-ago period prior).

Deposit Trends (Annualized)

In the first-quarter 2025 (bold) versus first-quarter 2024:

• 10.4 percent versus 43 percent (certificates of deposit).
• 4.4 percent versus -3 percent (checking).
• 2 percent versus 3.2 percent (IRA/Keogh).
• 5.6 percent versus -9.9 percent (money market).
• -0.4 percent versus -9.6 percent (savings).
• All deposit categories combined (total): 6 percent versus 2.4 percent (total annualized deposit change).
• Deposit growth nearly doubled while member growth remained slow.
• Deposit growth is trending back up, though still below historical averages.
• Core deposits are once again contributing to total deposit growth.
• Core deposit balances are rising as growth in certificates of deposits (CDs) slows.
• Members are putting more savings into short-term deposit options.

Loan Trends (Annualized)

In the first-quarter 2025 (bold) versus first-quarter 2024:

• 17.9 percent versus 22.1 percent (combined HELOCs/home equity loans).
• 11.5 percent versus 11.4 percent (business/commercial loans).
• 3.8 percent versus 8.9 percent (credit cards).
• 3.6 percent versus 3.2 percent (first mortgages).
• -0.6 percent versus 1.1 percent (used autos).
• -4.7 percent versus -2.7 percent (new autos).
• All loan categories combined (total): 4 percent versus 4.6 percent (total annualized loan change).
• This was the highest quarter for consumer lending since third-quarter 2023.
• Americans purchased vehicles to get ahead of U.S. trade tariffs.
• Larger credit unions are driving the industry’s total loan growth.
• Loan growth slowed in most products versus one year ago.
• Members are managing credit as HELOCs remain in demand, credit card utilization drops (members pay down holiday balances), and asset quality improves (delinquency falls).
• Net charge-offs are up slightly.

Earnings, Capital Trends, and Expenses (Annualized)

In the first-quarter 2025 (bold) versus first-quarter 2024:

• Liquidity has normalized.
• The industry’s loan-to-deposit ratio is following a pattern of decline in the first quarter.
• Liquidity borrowings have fallen back to 2022 levels as liquidity improved.
• Cash balances rose to 9.1 percent of assets.
• The industry’s interest margin widened as loan yields rose and the cost of funds declined.
• The net interest margin reached its highest level since 2009.
• The industry’s margin increase outpaced the rise in the operating expense ratio (OpEx).
• Non-interest income declined significantly as investment gains waned.
• The industry’s loan loss provision expense is up slightly from one year ago. Credit unions are reserving $1.64 for every $1 of delinquent loans.
• Return on assets (ROA) remained in a narrow range.
• A higher asset yield was offset by lower non-interest income and higher operating expenses (OpEx).
• Total capital and net worth ratios moved higher.

Important Takeaways

Additional thoughts:

• Credit unions are starting 2025 on a positive note as their members add to deposit and loan balances.
• Uncertainties remain on the economic, legislative, and regulatory fronts. Credit unions need to be ready to adapt to changing conditions while continuing to focus on the long-term. Are there lessons from the COVID-19 pandemic that can be applied?
• Credit union members are looking for support amid financial constraints and uncertainty. Credit unions can be their trusted advisor and build long-term relationships. It starts with listening to member concerns and questions.
• Industry averages are dominated by larger credit unions’ performance. The 20 largest credit unions (over $10 billion in assets) hold 24 percent of industry assets. The mean/average credit union in the country has $533 million in assets. Median = “middle” credit union performance for each metric. This is not always an accurate picture of performance for many credit unions. There are 4,455 active charters today, with the median credit union in the country having approximately $62 million in assets. 

The First Quarter 2025 TrendWatch webinar was presented by Washington, D.C.-based Callahan and Associates CEO Jon Jeffreys and Chief Collaboration Officer Jay Johnson.