ROA peaks in the fourth quintile, where loan-to-share averages 89.2%. The most cautious lenders earn 1.03% ROA; the most extended lenders earn 0.90%. The peak quintile earns 1.11%.
All 1,818 federally insured US credit unions with $100M+ in assets, split into loan-to-share quintiles. Outcome: return on assets at the latest quarter.
| L/S quintile | Avg (l/s quintile) | Range | Credit unions | Avg ROA | Median ROA |
|---|---|---|---|---|---|
| Q1 — most cautious | 50.6% | 14.6% – 62.3% | 364 | 1.03% | 1.00% |
| Q2 | 69.4% | 62.3% – 75.7% | 364 | 1.07% | 1.03% |
| Q3 | 80.2% | 75.7% – 84.7% | 364 | 1.04% | 1.02% |
| Q4 — sweet spot | 89.2% | 84.8% – 93.8% | 363 | 1.11% | 1.06% |
| Q5 — most extended | 103.2% | 93.8% – 169.2% | 363 | 0.90% | 0.93% |
The relationship between lending intensity and profitability isn't monotonic — it's an inverted U. Below the sweet spot, CUs leave yield on the table by parking deposits in investments instead of loans. Above it, the marginal loan is funded at higher cost or with worse credit, and ROA compresses.
The peak quintile averages a loan-to-share ratio of 89.2%. The lowest and highest quintiles both underperform it — but the over-extended cohort (Q5, averaging 103.2%) underperforms more than the cautious one. Asymmetric downside: it's worse to over-lend than under-lend.
If your L/S is below 75%, you're probably leaving 10-20 bps of ROA on the table. If it's above 100%, you're likely buying growth at the cost of margin. The peak band is wide enough (~10 points) that most CUs have room to optimize without dramatically changing strategy.
Tudovu Research is published from NCUA call-report data via CU Growth Plan. New analysis each quarter as fresh data lands.
Tudovu's Industry Data Explorer runs this same analysis on a custom peer set — pick the asset tier, state, charter type, or specific competitors and we'll show you where your CU sits in the curve.