The Cohort Earnings Divergence — Q3 2026

Nine Months

Asset-size tiers place each credit union by its total assets at quarter-end, and the smallest holds those under $100 million. At September 30, 2026, 2,414 of the credit unions that had filed were in it, 57.7% of the filers and 2.9% of their assets. Each comparison between quarters here is drawn on the 4,145 credit unions that filed for every quarter end from September 30, 2024 to September 30, 2026, so that no credit union entering or leaving the data moves it, each placed in a tier by its own assets at each quarter-end. Of those, 2,402 were in the under-$100M tier at September 30, 2026, holding 2.9% of the panel's assets.

For the nine months the tier's annualized ROAA was 72‱, against 87‱ for the first nine months of 2025, while each larger tier earned more than a year earlier. In the third quarter alone every tier earned less than a year earlier. The smallest returned 71‱ in Q3 2026 alone, 25‱ less than in Q3 2025, and each of the three middle tiers between 2‱ and 9‱ less. In the largest tier, credit unions over $10B, most of the fall is one credit union's. Navy Federal Credit Union, the largest of the 26 panel credit unions in that tier, earned $1M in Q3 2026 against $545M in Q3 2025. Without Navy Federal the tier returned 81‱ in Q3 2026 and 87‱ in Q3 2025.

Fixing each credit union's tier at its June 30, 2026 assets, as the evidence for this page first did, changes the smallest tier's figures little: 2,400 credit unions returned 72‱ against 85‱ for nine months and 71‱ against 94‱ for the third quarter, and 1,447 of them earned a lower nine-month return. Its year-over-year fall is 2‱ smaller over nine months; the fixed tier compares the same credit unions in both years, where the floating tier's 2025 figure is for those in the tier at September 30, 2025.

Nine Months and One Quarter: the table gives each tier's annualized ROAA on the panel for the first nine months and for the third quarter alone, in each year. Over nine months the smallest tier is the only one below its 2025 figure; in the third quarter alone it fell further than any of the three middle tiers.

Where the First Quarter Went

These figures are not comparable with the first-half figure that System Signals — Q2 2026 reported for the tier. As filed, the tier's first-half ROAA was 43‱, and 71‱ without Jackson Area Federal Credit Union, against 76‱ for the first half of 2025. Jackson Area, of Mississippi, reported a first-quarter loss of $92M, the largest of the 2,466 credit unions in the tier at March 31, 2026, and a first-half loss of $103M. Its assets went from $162M at December 31, 2025 to $61M at June 30, 2026, which put it in the tier. Jackson Area has not filed for September 30, 2026, so it is outside the panel and outside the tier's nine months as filed, 72‱ against 84‱. Its first-half loss is equal to an annualized 19‱ of the panel tier's average assets for the nine months.

Set against the first half without Jackson Area, the year-over-year shortfall widened: 5‱ for the first half without it, then 12‱ for nine months as filed and 15‱ on the panel. Of the two 2025 figures the panel's is the higher: the credit unions it leaves out, those that merged into another, missed a quarter or have not filed for September 30, 2026, earned less in 2025 than those it keeps.

Four Readings of the Year to Date: the table sets each year-to-date figure for the under-$100M tier beside the same months of 2025. The first half as filed holds Jackson Area's loss; the second row and both nine-month rows do not.

Across the Tier

Most of the tier earned less. Of the 2,402 panel credit unions in the smallest tier at September 30, 2026, 1,446 had a lower nine-month ROAA than a year earlier and 955 a higher one, and the median change was 12‱ lower. 432 reported a year-to-date loss at September 30, 2026, against 356 of the tier a year earlier. No one credit union carries the tier's figure: without the one whose exclusion moves it most, a credit union with a year-to-date loss of $4M, the tier's nine-month ROAA as filed would be 73‱ rather than 72‱.

In dollars the tier's nine-month net income was $57M lower than the same credit unions' a year earlier. The 50 largest falls add up to $47M, or 82.4% of it, and without them the rest of the tier returned 77‱ against 81‱. That comparison drops one tail only. The 50 largest rises add up to $30M, and the 2,302 credit unions between the two tails earned $40M less than a year earlier, an ROAA of 76‱ against 86‱. The largest falls are not mergers, since 4 of the 50 took one in during the year, and they do not share one line of the income statement: non-interest income fell most at 19, operating expense rose most at 13, provisions at 13 and net interest income fell most at 5.

Both Tails and the Middle: the table divides the tier's change in nine-month net income by where each credit union's change ranks. The 50 largest falls are 82.4% of the whole change, and the credit unions between the two tails still earned less than a year earlier.

Within the tier the fall is widest among the smallest. Credit unions with assets under $10 million returned 24‱ against 64‱, those from there up to $50 million 74‱ against 91‱, and the rest of the tier 74‱ against 81‱. A majority in each band earned a lower return. The smallest band holds 748 credit unions but 4.4% of the tier's assets, so its fall moves the tier's figure little.

Below the Margin Line

The Cohort Earnings Divergence — Q2 2026 read the tier's first-quarter shortfall as an event, mostly one credit union's loss, and found a smaller year-over-year shortfall that remained without it. The event reading holds for the size of the first quarter's figure. It does not account for the year: on the panel, without Jackson Area, the tier's Q1 2026 alone was 8‱ below Q1 2025, Q2 2026 10‱ below Q2 2025 and Q3 2026 25‱ below Q3 2025.

ROAA is the net interest margin plus non-interest income, less operating expense and provisions, each over average assets, so the third quarter's shortfall divides into those four lines. The margin was 390‱ against 389‱ in Q3 2025, while non-interest income was 13‱ lower, operating expense 11‱ higher and provisions 2‱ higher. In Q1 2026 and Q2 2026 the margin was wider than a year earlier, by 9‱ and 4‱, against operating expense up 9‱ and 13‱; by the third quarter its gain on a year earlier had narrowed to 1‱. Q3 2025's non-interest income, 105‱, is the highest of the 8 quarters in the table, against 99‱ for the next highest, so part of that line's fall is a high quarter a year earlier.

Credit moved the quarter little. Provisions were 2‱ higher, and the tier's 60+ day delinquency ratio rose 2‱ in the quarter, against a change of 0‱ in Q3 2025. Over the year the same credit unions' loans changed by 0.01%. We read the third quarter's shortfall as operating expense still rising while the margin's gain on a year earlier narrows, with non-interest income back from a high quarter, rather than as a second event.

Without the First Quarter's Loss: the table follows the under-$100M tier on the panel through eight single quarters, line by line. Jackson Area is outside the panel, so Q1 2026 here is the tier without it; each quarter of 2026 is below the same quarter of 2025, Q3 2026 by the most, and the margin's gain on a year earlier is smallest in Q3 2026.

What Settles It

System Signals — Q1 2026 (June 27, 2026) set a watch on the smallest tier, and the record of calls carries it as "The smallest credit unions' earnings would turn," undecided after Q2 2026. The call named no comparator. On the panel every reading falls short: Q3 2026 alone returned 71‱, below the 80‱ of Q2 2026 alone and the 95‱ of Q3 2025 alone, and the nine months returned 72‱ against 87‱. We read the call as not met.

Every Reading Short: the table sets the under-$100M tier's latest figures beside each comparator the call or the earlier test could name. Each is below.

Test H-2026Q2-breakdowns-cohort-01, set in the Q2 2026 edition, asked whether the ROAA of the under-$100M tier for Q3 2026 alone, annualized over average assets, exceeds its Q3 2025 figure of 97‱. On the release that carries Q3 2026 it is 71‱, below the threshold. The threshold was derived as the difference of two tier totals, the nine months less the first half, each for the credit unions in the tier at its own quarter-end. Taken that way, Q3 2026 would count Jackson Area's first-half loss as third-quarter income for the tier, since the credit union is in the June total and not in the September one, adding 56‱. This page scores the quarter as the sum of each credit union's own quarter, which a credit union leaving the tier does not move.

Expectation H-2026Q3-breakdowns-cohort-01. We expect the ROAA of the under-$100M tier for 2026, annualized over average assets as the published tier reports it, to be at or below its 2025 figure of 77‱. Likely (70–85%). Settles with the Q4 2026 data; made in November 2026, on the release that carries Q3 2026. The population is credit unions with total assets under $100 million at December 31, 2026, and its membership floats with each quarter-end; the result is scored in whole ‱. The baseline, the tier's nine months as filed carried to the year, is 72‱ and also at or below. On the panel the fourth quarter alone was the tier's weakest quarter of 2025, 60‱. A reading above would be consistent with a fourth quarter that recovers what the third lost; a reading at or below would be consistent with a shortfall that holds for the year.

Connecting the Lines

This edition continues the size divide thread from The Size Divide — Q3 2025 (December 20, 2025), The Cohort Earnings Divergence — Q1 2026 (June 27, 2026) and The Cohort Earnings Divergence — Q2 2026. It answers the watch item in Signal 3 of System Signals — Q2 2026 (October 5, 2026), which asked whether the first quarter was the outlier. The first quarter's loss was one credit union's, and that credit union is now outside the figures; the year-over-year shortfall that remained without it has widened, and it runs across most of the tier rather than through a few institutions. The thread's open question is the full year, and the expectation above is its next step.

QuarterCall publishes analysis of publicly available NCUA Call Report data. Nothing here is investment, financial, or membership advice.