U.S. Credit Union Industry 2025 Review: Margin Recovery Meets Credit Normalization

Margin Recovery Drives Earnings Improvement

Earnings performance reached a clear inflection point in 2025 for U.S. credit unions (CU) above $1 billion in assets, as the sector transitioned from a period of sustained margin pressure to one of meaningful recovery. Median return on assets (ROA) increased to 0.72% in 2025 from 0.57% in 2024, while median net interest margin (NIM) was a key contributor, expanding to 3.49% from 3.16%. The generally asset-sensitive nature of CU balance sheets played a central role in this improvement, supported by favorable earning-asset repricing dynamics, continued loan growth, and moderating funding cost pressures.

As strong loan growth generated during the low-rate environment of 2021 and 2022 ran off, refinanced, or was replaced with new production at higher coupons, median average earning-asset yields increased 21 basis points (bps) to 5.34% in 2025, even as benchmark rates eased. In 4Q25, the sector faced moderate pressure on earning-asset yields,…