By Aaron Passman, Callahan/CreditUnions.com
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After an anxious 2025, CFOs and observers across the industry are preparing for the year ahead — for better or for worse.
2025 was a whirlwind year, but from a balance sheet perspective, it could’ve been a whole lot worse.
That’s the consensus from a variety of credit union leaders who braved a year of economic anxiety and come out intact on the other side. The task ahead? Maintain that momentum as they head into another year of uncertainty.
“I feel like there’s more certainty this year compared to [at the end of 2024],” says Seth Rudd, chief financial officer at Leaders Credit Union ($1.3B, Jackson, TN). “Saying that, the way we approach every year, regardless of what’s going on, is we’re going to reach our goals. We take economic indicators into account, but for the most part we know what we need to accomplish next year.”
Lending Landscape
Leaders isn’t expecting any major balance sheet changes in the year ahead. Rudd says he believes it’s unlikely mortgage business will pick up significantly, but he expects another strong year. He also expects auto lending rates to remain steady. Although he bases his prognostication on rate forecasts for the Fed, local forecasting also plays a major role.
“We mostly pay attention to our local market and what we’re seeing,” he says. “We’re not seeing bankruptcies increase significantly. It’s in line with where we’ve been the past 12 to 24 months.”
Rudd says Leaders intends to stay “laser-focused” on its current product mix, blending 65% auto lending with 25% real estate and consumer lending rounding out the remainder.
“We’re committed to our model,” the CFO says. “We don’t expect a change.”
EFCU Financial ($1.2B, Baton Rouge, LA) is taking a similarly optimistic approach, understanding that it could need to pivot quickly if things go south.
“We’re positioned to handle any economic uncertainty within reason,” says Tom Kuslikis, president and CEO. “If there’s something catastrophic, we’d feel pain because of that. Now that we’re going into a declining rate environment, we’ll be keeping a close eye on our expenses and managing appropriately.”
More than 40% of EFCU’s loan portfolio is auto loans, which Kuslikis says still has room to reprice. Margins have increased a lot and financials are strong, and with a lower rate environment expected in 2026, it’s likely the credit union will begin to see some margin compression, he says.
If rates go down as expected, notes William Hunt, director of industry analytics at Callahan & Associates, it could spark mortgage activity as purchase activity picks up from consumers looking for cheaper housing options.
At Leaders, third quarter credit card growth stood at 11.49%, about half of where it was three years ago, and Rudd says delinquencies and charge-offs are picking up in lower credit tiers.
That’s in line with the K-shaped recovery many Americans have been feeling but also reflects a resilient consumer, Hunt says.