Signals — Q3 2026
This edition continues the four threads of System Signals — Q2 2026 (October 5, 2026): the delinquency ratchet, the provision lag, the funding gap and the size divide. Q3 2026 is measured on a matched panel, the 4,157 credit unions that filed for each quarter from Q2 2025 to Q3 2026, which are 98.6% of those that filed for Q2 2026 and held 98.6% of their assets. Each panel figure is compared with the same credit unions a year earlier.
Signal 1: Delinquency Rose by a Little More Than a Year Earlier, and Without One Credit Union by Less
The panel's 60+ day delinquency ratio rose to 101‱ at September 30, 2026 from 97‱ at June 30, 2026, an increase of 4.3‱ against 4.0‱ over the same months of 2025. That left the ratio 5.8‱ above its September 2025 reading. Credit unions moved both ways: 2,078 of the 4,157 had a higher ratio than in June and 1,854 a lower one.
CommunityAmerica Credit Union, the 39th largest of the 4,157 by assets with $9.2B, had the largest increase in delinquent loans of any of them in Q3 2026, $198M, of which $180M was in commercial real estate. Its commercial real estate delinquency ratio rose to 24.28% at September 30, 2026 from 10.73% at June 30, 2026, and its increase in delinquent commercial real estate loans was 65.6% of the panel's $275M.Without CommunityAmerica, the panel's ratio rose 3.2‱ in Q3 2026 against 4.1‱ in Q3 2025. On the same basis, the panel's commercial real estate delinquency ratio rose 2.9‱ in the quarter and 18.5‱ over the year, against 12.4‱ and 31.8‱ with CommunityAmerica included.
The Q2 2026 edition placed the year's rise in the $1B–$10B tier. In size bands set by assets at June 30, 2026, CommunityAmerica is in the $1B–$10B band, whose ratio rose 4.3‱ in Q3 2026 against 2.5‱ in Q3 2025, and 2.2‱ against 2.6‱ without it. Over the year that band's ratio rose 7.6‱, or 4.8‱ without CommunityAmerica, and the under-$100M band's rose 5.1‱. We read the year's rise in delinquency as spread across both ends of the size range and no longer centered on one band.
Little of the year's increase is in cards or vehicles; the Q2 2026 edition found none of it there at June. Delinquent card and vehicle loans were $5.92B at September 30, 2026 against $5.82B a year earlier, while all delinquent loans rose $2.23B. We read the quarter as continuing the ratchet at the 2025 pace and not faster.
The quarter's change in delinquency, 2026 against 2025: Without CommunityAmerica, the panel's ratio, the $1B–$10B band's and the commercial real estate ratio each rose by less than a year earlier.
Matched Panel: Change in 60+ Day Delinquency Ratios, Q3 2026 and Q3 2025 (‱)
Copy link| All credit unions in the panel | 100.8 | 4.3 | 4.0 |
| The panel without CommunityAmerica | 99.1 | 3.2 | 4.1 |
| The $1B–$10B band | 87.8 | 4.3 | 2.5 |
| The $1B–$10B band without CommunityAmerica | 84.5 | 2.2 | 2.6 |
| Commercial real estate, all credit unions in the panel | 129.4 | 12.4 | 3.0 |
| Commercial real estate without CommunityAmerica | 113.2 | 2.9 | 3.7 |
Test. Whether the system's 60+ day delinquency ratio at March 31, 2027 exceeds its reading at March 31, 2026, 84.5‱. Q1 2027 settles it. A higher reading would be consistent with a first-quarter low that rises from year to year, the ratchet this series has followed; a reading at or below it, with a 2026 rise that the first quarter's seasonal fall undoes. No expectation is attached.
What to watch
- Watch: The second-half climb — continued: the panel's ratio rose 4.3‱ from June to September against 4.0‱ in 2025, and the Q2 2026 test settles on December filings
- Watch: Commercial real estate — new: the panel's delinquency ratio on these loans is 129‱, 31.8‱ above September 2025's
- Watch: Delinquency by band — moderated from the $1B–$10B tier alone: over the year the under-$100M band's ratio rose 5.1‱ and the $1B–$10B band's 7.6‱
Signal 2: The Reserve Build Grew in Q3 2026, and Outside One Credit Union It Shrank
Provisions of the panel were $4.21B in Q3 2026 and net charge-offs $3.28B. Provisions were therefore 128.5% of net charge-offs, against 118.0% in Q3 2025, and exceeded them by $933M, against $540M. The allowance for credit losses rose $979M over the quarter.
Navy Federal Credit Union, the largest of the 4,157 by assets with $204.3B, recorded $1.32B of provisions in Q3 2026 against net charge-offs of $699M. Its provisions exceeded its charge-offs by $626M, the largest excess in the panel, against $86M in Q3 2025, and its allowance rose $626M. Navy Federal's net income for the quarter was $1M, against $545M in Q3 2025.Without Navy Federal, provisions were 111.9% of net charge-offs in Q3 2026, against 120.1% a year earlier, and exceeded them by $307M, against $454M. Navy Federal's excess rose $540M from Q3 2025 and the panel's $393M, so Navy Federal accounts for more than the whole of the rise in the build, though not for the build itself.
Coverage of delinquent loans fell even so. The allowance equaled 134.0% of loans 60+ days delinquent at September 30, 2026, against 137.1% at June 30, 2026 and 140.5% a year earlier, as delinquent loans grew faster than the allowance. We read the provision lag, the thread's name for provisions trailing delinquency, as unchanged among the other 4,156 credit unions: they provided less above their charge-offs than a year earlier while their delinquency rose.
Provisions against net charge-offs, Q3 2026 and Q3 2025: The panel's excess rose by more than two-thirds, and without Navy Federal it fell.
Matched Panel: Provisions and Net Charge-Offs in the Quarter, Q3 2026 and Q3 2025
Copy link| All credit unions in the panel | $4,210M | $3,277M | $933M | $540M | 128.5% | 118.0% |
| Navy Federal | $1,324M | $699M | $626M | $86M | 189.6% | 111.6% |
| The panel without Navy Federal | $2,886M | $2,579M | $307M | $454M | 111.9% | 120.1% |
What to watch
- Watch: The reserve build — continued: provisions exceeded charge-offs by $933M on the panel in Q3 2026 against $540M a year earlier, and a fourth quarter below charge-offs would undo part of it
- Watch: Coverage of delinquent loans — new: the allowance is 134.0% of 60+ day delinquent loans against 140.5% a year earlier, lower although provisions rose
- Watch: Loan modifications — new: loans modified for borrowers in financial difficulty were 60‱ of the panel's loans at September 30, 2026 against 52‱ a year earlier, and the allowance equaled 84.2% of modified and 60+ day delinquent loans together against 90.9%; the Breakdown Extend and Pretend? — Q3 2026 reads them
Signal 3: Loans Outgrew Shares Again as Cash Fell and Borrowings Rose for a Second Quarter
Loans of the panel grew 2.19% in Q3 2026 and shares 0.52%, against 1.46% and 0.75% in Q3 2025. Over the year to September 30, 2026, loans grew 7.62% and shares 6.77%; over the year to June 30, 2026 they grew 6.86% and 7.01%. The Q2 2026 edition read the gap as seasonal because shares had outgrown loans over the year, and on the panel that no longer holds.
Cash, investments and borrowing made up the difference. Cash and short-term investments fell 7.11% in Q3 2026, and 2,775 of the 4,157 credit unions held less cash than at June 30, 2026; investments fell 1.37%. Borrowings rose 6.16% after 5.05% in Q2 2026, the second consecutive rise. Without the 86 panel members that absorbed another credit union in the quarter, borrowings rose 4.36%.
The rise in borrowings is concentrated in dollars and wider by count than a year earlier. The ten largest rises equal 70.5% of the panel's net rise. Of the panel's members, 349 borrowed more in Q3 2026 and 302 less, against 243 and 321 in Q3 2025. Navy Federal's borrowings rose $851M of the panel's $4.77B, and without Navy Federal the panel's borrowings rose 5.52%.
Lending widened beyond real estate. Real estate was 64.1% of the quarter's loan growth, against 92.0% in Q3 2025, and vehicle loans grew 2.19% among members that did not merge, after falling 0.05% a year earlier. More credit unions raised vehicle lending than cut it, 2,059 against 1,986; in Q3 2025, 1,649 raised it and 2,396 cut it.
Loan growth did not slow after the second quarter, as the Q2 2026 edition found it had in each of the three years before: the panel's loans grew 2.19% in Q3 2026 against 2.01% in Q2 2026. We read the funding gap as no longer only seasonal on the panel's figures: loans have outgrown shares for two quarters and over the year, and cash, investments and borrowings met the difference.
Growth by quarter: Borrowings fell in the three quarters to March 2026 and rose in the two since, and loans grew faster than shares in both.
Source: NCUA Call Report, Q3 2026 · release v2026.3.4 · QuarterCall
Test. Whether the total borrowings of all federally insured credit unions at December 31, 2026 exceed their total at September 30, 2026, which would be a third consecutive quarterly rise. Q4 2026 settles it. A rise would be consistent with loans continuing to outgrow shares through the year-end; a fall, with a year-end inflow of shares replacing borrowing, as in Q4 2025, when the panel's shares grew 2.08% and its borrowings fell 4.80%. The evidence supports no side: borrowings have risen in two consecutive quarters, and in Q4 2025 they fell.
What to watch
- Watch: Borrowings — continued: the second consecutive rise came, 6.16% in Q3 2026 after 5.05%, and a third in Q4 2026 would meet the borrowings test
- Watch: Second-half loan growth — escalated from Favorable: loans grew 2.19% in Q3 2026 against 2.01% in Q2 2026, while cash fell 7.11%
- Favorable: Real estate's share — moderated: 64.1% of the quarter's loan growth against 92.0% a year earlier, with vehicle loans growing again
Signal 4: The Panel's Widest Margin Came With Lower Return on Assets in Every Size Band
The panel's net interest margin for Q3 2026 was 3.59%, 9.0‱ above Q3 2025's 3.50% and 6.5‱ above the widest of the 4 quarters before it. A third quarter has one more day than a second, so the like-for-like comparison is with Q3 2025.
Return on assets for the quarter was 78‱ of average assets, annualized, against 93‱ in Q3 2025. Navy Federal's quarterly net income accounts for most of the fall: without it the panel's return was 84‱ against 91‱. For the other 4,156 credit unions the margin added 8.6‱ of average assets from Q3 2025, while non-interest expense rose 8.2‱, non-interest income fell 7.3‱ and provisions were 0.3‱ lower.
In every band, return on assets for Q3 2026 was below Q3 2025's, and the over-$10B band stayed below without Navy Federal, at 82‱ against 97‱. By institution the fall is less general: 2,344 of the 4,157 had a lower quarterly return than a year earlier. Fewer than half did in the $1B–$10B band, 211 of 437, and about half in the $500M–$1B band, 140 of 273.
Credit unions under $100M, 2,405 of the panel's members with 2.9% of its assets, returned an annualized 72‱ for the nine months to September 30, 2026, against 85‱ a year earlier. The Q2 2026 edition asked whether the first quarter was an outlier, and Q3 2026 was below its 2025 counterpart as well, at 71‱ against 94‱. Of the band's members, 1,450 have a lower nine-month return than a year earlier, and 435 report a nine-month loss, against 360 a year earlier.
That fall is broad by count and concentrated in dollars. The band's nine-month net income is $60M lower than a year earlier; the 10 largest falls make up 31.1% of that, and the 50 largest add up to $47M, or 79.0% of it. We read the size divide as holding through September: the three middle bands earn more for the nine months than a year earlier, the largest about the same, and the smallest less.
At September 30, 2026 the system had 4,179 credit unions, 36 fewer than at June 30, 2026 and 152 fewer than a year earlier.
Return on assets by band: Every band earned less in Q3 2026 than in Q3 2025, and over the nine months the smallest band earned less than a year earlier, the largest about the same and the three between them more.
Matched Panel by Asset Band at June 30, 2026: Return on Average Assets, Q3 2026 and Q3 2025 (‱, Annualized)
Copy link| Under $100M | 2,405 | 2.9% | 71 | 94 | 72 | 85 | 1,421 |
| $100M–$500M | 1,017 | 9.5% | 83 | 85 | 81 | 79 | 557 |
| $500M–$1B | 273 | 8.0% | 76 | 83 | 79 | 68 | 140 |
| $1B–$10B | 437 | 51.5% | 88 | 91 | 88 | 79 | 211 |
| Over $10B | 25 | 28.0% | 58 | 102 | 89 | 90 | 15 |
| Over $10B without Navy Federal | 24 | 19.8% | 82 | 97 | 88 | 85 | — |
What to watch
- Favorable: The margin's direction — continued: 3.59% for Q3 2026, 9.0‱ above Q3 2025 on the panel, against the system's gain of 14.5‱ in Q2 2026
- Watch: The smallest credit unions' full year — continued: 72‱ for the nine months against 85‱, with Q3 2026 below Q3 2025 as well
- Watch: Return on assets by band — new: below Q3 2025 in every band for the quarter, and for the nine months above 2025 in the three middle bands, about level in the largest and below in the smallest
- Watch: Charter count — continued: 4,179 credit unions at September 30, 2026, 152 fewer than a year earlier
How the Signals Connect
Each thread moved in Q3 2026 and none settled. Delinquency climbed from June at about last year's pace, provisions ran further ahead of charge-offs, loans outgrew shares with cash, investments and borrowings meeting the difference, and return on assets fell below Q3 2025's in every band in spite of the widest margin of the panel's five measured quarters.
Two credit unions account for the quarter's largest moves, and the panel reads differently without them. Without CommunityAmerica, delinquency rose by less than a year earlier; without Navy Federal, provisions exceeded charge-offs by less than a year earlier, and return on assets fell 6.6‱ from Q3 2025 instead of 15.4‱. We read the rest of the panel as quieter than its totals: delinquency rising more slowly than in 2025, provisions above charge-offs by less than a year earlier, and return on assets lower more on non-interest income and expense than on credit. The funding gap is the one thread that reads the same either way, and Q4 2026 tests it beside the two tests the Q2 2026 edition set.
Cycle Position
The Credit Cycle Position Indicator and the Credit Union Financial Stress Index are not reported for Q3 2026. The composite build still cannot be reproduced from the release, and QuarterCall Research does not publish an index reading it cannot reproduce from source.
What We Expected, What Happened
No horizon resolved in Q3 2026. Two tests set by System Signals — Q2 2026 settle on the system's December 2026 filings, and Q3 2026 bears on each, measured on the panel.
The second-half climb. As published: "delinquency rose 12 bps from June to December last year; a repeat ends this year above 1.03%." Open until Q4 2026. Through September the panel's ratio rose 4.3‱ from June, against 4.0‱ over the same months of 2025, and stood 2.2‱ below its own December 2025 reading. We read the climb as on last year's path.
Second-half loan growth. As published: "whether loan growth slows after the second quarter as it has in each of the last three years." Open until Q4 2026. In 2025 the system's loan growth slowed to 1.28% in Q3 2025 from 1.66% in Q2 2025; the panel's loans grew 2.19% in Q3 2026 against 2.01% in Q2 2026. We read Q3 2026 as running against the pattern, with Q4 2026 still to come.
Status
- Favorable: Capital — the panel's net worth ratio was 11.6% at September 30, 2026, against 11.4% at June 30, 2026; unchanged from Q2 2026
- Watch: Credit — the 60+ day delinquency ratio was 101‱, 4.3‱ above June 30, 2026 and 5.8‱ above a year earlier; unchanged from Q2 2026
- Watch: Earnings — return on assets was 78‱ for Q3 2026 against 93‱ for Q3 2025, lower in every band; changed from Favorable
- Watch: Liquidity — loans grew 2.19% and shares 0.52% in Q3 2026, borrowings rose 6.16% and cash fell 7.11%; changed from Favorable
- The figures are those of release v2026.3.4, which carries Q3 2026 as final. Except the charter count, every Q3 2026 figure in the four signals, the status block and What We Expected, What Happened is measured on a matched panel of the credit unions that filed for each quarter from Q2 2025 to Q3 2026, not on the system, so that each is compared with the same credit unions a year earlier.
- Panel growth rates include balances acquired by merger, and growth without the members that merged in the quarter is given where it changes a reading; size bands are set by assets at June 30, 2026 and held fixed, so they differ from The Ledger's tiers, which are set at each quarter's end.
- A quarter's income is the difference of two year-to-date figures, annualized over the average of the quarter's opening and closing assets, and nine-month return on assets uses the average of June and September assets, as The Ledger does; no figure is seasonally adjusted, so each Q3 2026 figure is compared with Q3 2025 for the same credit unions.
- Figures with and without Navy Federal Credit Union and CommunityAmerica Credit Union are as each filed and have not been checked against the institutions' published statements; the two Q2 2026 tests and the new delinquency test's threshold use all filers for quarters before Q3 2026, the charter count uses all filers in every quarter, and no other system total or system growth rate is given for Q3 2026.
- Delinquency for cards, vehicles and commercial real estate is taken from the Call Report accounts as each credit union filed them, not from the release's delinquency-by-category series, and the Credit Cycle Position Indicator and the Credit Union Financial Stress Index are not reported this cycle.
The threads' latest Breakdowns are The Delinquency Moved — Q2 2026 (October 6, 2026), Where the Losses Are — Q2 2026 (October 6, 2026), The Funding Gap — Q2 2026 (October 21, 2026) and The Cohort Earnings Divergence — Q1 2026 (June 27, 2026).
QuarterCall publishes analysis of publicly available NCUA Call Report data. Nothing here is investment, financial, or membership advice.