Short answer: The ratios look alike and are built differently. A credit union is exempt from federal income tax, so its return on assets belongs beside a bank's pre-tax return on assets. A credit union's net worth ratio is essentially retained earnings over total assets, with 7% as the well-capitalized line. A bank's tier 1 leverage ratio also counts common stock and surplus, deducts goodwill and most other intangibles, and divides by average assets; its well-capitalized line is 5%. Loan-to-share and loan-to-deposit ask the same funding question with different inputs. Use bank figures as context for a credit union, never as its peer group.
The second quarter of 2026 in published figures
These figures often end up side by side in a competitor review. Read the last column before comparing any two of them.
| Measure | Figure | What it is |
|---|---|---|
| Credit union return on average assets | 0.91% | System aggregate, annualized |
| Community bank pretax return on assets | 1.53% | FDIC aggregate |
| Banking industry return on assets | 1.37% | FDIC aggregate, after tax |
| Bank return on assets | 1.23% | BankingLens median, after tax |
| Credit union net worth ratio | 11.42% | System aggregate |
| Bank tier 1 leverage ratio | 10.96% | BankingLens median |
| Credit union loan-to-share ratio | 82.9% | System aggregate |
| Bank loan-to-deposit ratio | 80.16% | BankingLens median, net loans |
Sources: NCUA data reported by CU Today (return on average assets, net worth ratio); NCUA's second quarter 2026 release (loan-to-share ratio); FDIC Quarterly Banking Profile, second quarter 2026; BankingLens, FFIEC call reports for the quarter ending June 30, 2026.
Two problems are visible before any definition comes in. The credit union and FDIC figures are aggregates built from totals, so the largest institutions weigh the most, while our bank figures are medians, where a bank under $100 million counts as much as one over $100 billion. The rows also cover different institutions. The bigger problem is that each pair of ratios is calculated differently.
Return on assets starts with taxes
Federal law exempts a federal credit union's income from federal taxation, though its real estate and other tangible property can be taxed, and a 2001 NCUA legal opinion describes federal credit unions as exempt from state income taxes too. State-chartered credit unions are exempt from federal income tax under section 501(c)(14)(A) and file an annual information return.
In 2005 testimony the GAO called credit unions the only type of financial institution exempt from federal income taxes. Not every bank pays corporate income tax, though. The Congressional Research Service notes that banks organized as Subchapter S corporations don't pay corporate-level taxes either, because the tax falls on their shareholders.
The fair comparison is pre-tax: a credit union's return on assets against a bank's income before taxes, annualized and divided by average assets, for every bank in the set, Subchapter S or not. Schedule RI is reported calendar year to date, so annualize before dividing. Every ROA on our scorecards is after tax, including the 1.31% Frost Bank reported for the first half of 2026 on the sample scorecard, so none of them belongs beside a credit union's figure unadjusted.
The second quarter shows what taxes can't explain. NCUA data reported by CU Today put the credit union system's annualized return on average assets at 0.91%, and the FDIC put community banks' pretax return on assets at 1.53%. Adding tax back only raises a bank's figure, so the exemption isn't why the credit union number is lower.
Neither aggregate says which kind of institution is better run. A federal credit union is a not-for-profit cooperative owned by its members, as the NCUA opinion describes it. NCUA's 2006 letter on evaluating earnings says a credit union needs earnings to cover the cost of member services and keep net worth at a safe and sound level, and that it returns earnings to members in forms such as dividends and lower loan rates. A stockholder-owned bank prices to earn a return for its owners. The same letter says no simple metric sets what an individual credit union's ROA should be.
Net worth ratio against tier 1 leverage
NCUA defines a credit union's net worth as its quarter-end retained earnings under GAAP, plus narrow additions such as subordinated debt at low-income designated credit unions, and the net worth ratio divides it by total assets, measured at quarter end or as an average the credit union elects. A credit union is well capitalized at a net worth ratio of 7.0% or more and adequately capitalized at 6.0%. A bank's tier 1 leverage ratio divides tier 1 capital by average total consolidated assets, less amounts deducted from tier 1. Tier 1 capital starts from common stock and its surplus, retained earnings and accumulated other comprehensive income (AOCI), with goodwill and most other intangibles deducted, and a bank is well capitalized at a leverage ratio of 5.0%.
| What differs | Credit union net worth ratio | Bank tier 1 leverage ratio |
|---|---|---|
| Capital counted | Retained earnings, plus narrow additions | Common stock and surplus, retained earnings, and AOCI unless the bank opted out |
| Deducted | Nothing in the definition | Goodwill and most other intangibles |
| Divided by | Total assets at quarter end or an elected average | Average total consolidated assets, less deductions |
| Well capitalized | 7.0%; complex credit unions also need a 10% risk-based capital ratio or the CCULR | 5.0% |
| Simpler option | CCULR, 9% | CBLR, more than 8% since July 1, 2026 |
| Reported on | Form 5300, Schedules G, H and I | Call report Schedule RC-R Part I |
Sources: NCUA's definitions, capital categories and CCULR rule; the FDIC's leverage ratio, capital, deduction and well-capitalized rules; the CBLR final rule; NCUA's 5300 call report FAQ; the call report instructions.
Four of those rows push the two ratios apart. A bank that issues qualifying common stock counts it in tier 1; net worth has no such line, so a credit union mostly earns its capital, which ties its net worth ratio to its ROA. A bank deducts goodwill, and the net worth ratio doesn't. Unrealized losses on available-for-sale bonds sit in AOCI, outside retained earnings, so they never reach net worth, while at a bank they reach tier 1 unless it made the one-time election to exclude most AOCI. And a bank always divides by an average, where a credit union may use its quarter-end balance.
Credit unions with quarter-end assets over $500 million are complex, and since the risk-based capital rule took effect on January 1, 2022 they have needed a risk-based capital ratio of 10% to be well capitalized. A complex credit union can instead opt into the complex credit union leverage ratio if its off-balance-sheet exposures are 25% or less of assets, its trading assets plus trading liabilities 5% or less, and its goodwill plus other intangibles 2% or less. It is then treated as well capitalized at a CCULR of 9%, calculated like the net worth ratio. The final rule dropped the proposal's step-up to 10%.
The bank counterpart, the community bank leverage ratio, applies the same 25% and 5% tests to banks under $10 billion, and a bank that elects it is treated as meeting the well-capitalized thresholds. Its requirement fell from more than 9% to more than 8% on July 1, 2026; the CCULR stayed at 9%.
The published figures invite the wrong conclusion. NCUA data reported by CU Today put the credit union system's net worth ratio at 11.42% in the second quarter of 2026, and the median bank in our data reported tier 1 leverage of 10.96%. One is an aggregate of retained earnings over total assets and the other the middle bank's tier 1 capital over average assets, so the gap between them says little about which system holds more capital.
Loan-to-share against loan-to-deposit
Shares are what a credit union calls its deposits. Members' balances go on Schedule D of the Form 5300, and the National Credit Union Share Insurance Fund insures them up to $250,000 per member, per credit union, per ownership category. NCUA defines the loan-to-share ratio as total loans outstanding over total shares and deposits, and its examiner guidance reads the ratio much as a banker reads loan-to-deposit: the higher it runs, the more likely the credit union will need outside funding.
The system ratio was 82.9% in the second quarter of 2026, down from 83.1% a year earlier, and the median bank's loan-to-deposit ratio in our data was 80.16%. Don't read much into how close those are. We divide net loans, after the allowance for credit losses, by total deposits (see what is a good loan-to-deposit ratio for a bank), while NCUA starts from total loans outstanding. And NCUA's figure is one ratio for the whole system, where ours is the middle bank. That second difference is large: NCUA's national median loan-to-share ratio for the first quarter of 2026, published in its state-level data report, was well below the system ratio for the same quarter, a sign that the largest credit unions lend out more of their shares than the typical one does.
Match size before comparing one credit union with one bank. Among banks in our data, the median loan-to-deposit ratio runs from 65.63% under $100 million in assets to 88.31% at $3 billion to $10 billion. For the funding behind a high ratio, the March 2025 form changes added 5300 lines for brokered and reciprocal deposits on Schedule D and for pledged assets on Schedule C, Liquidity.
Field of membership sets the customer base
No membership test applies to a bank's customers. A credit union's field of membership determines who is eligible to join and use its products and services, and a federal credit union needs NCUA approval to change it. Federal charters are single common bond, multiple common bond (more than one group, each sharing an occupation or an association) or community, which NCUA's chartering manual illustrates with the people who live, worship, work or attend school in a named county. In the second quarter of 2026 the system counted 146.1 million members at 4,214 federally insured credit unions (NCUA data reported by CU Today).
Read the charter before the ratios when you size up a credit union competitor. A credit union built around employers or associations grows its shares and loans with those groups, and reaching beyond them takes an approved expansion. A community charter can compete for any household or business in its area, across the desk from the local bank.
Why credit unions stay out of our bank percentiles
BankingLens is built for banks, and credit unions never enter a peer group or a percentile here. Our methodology page gives the reason: a tax-exempt institution's return on assets isn't comparable to a taxpaying bank's. The capital ratios above aren't built alike either. For a credit union's own peer comparison, NCUA's Financial Performance Report shows its ratios beside peer ratios for credit unions of similar asset size.
Deposits are different, because a member's share balance is money a bank in the same county is also trying to hold. Deposit Share, a Beta preview, adds credit unions from NCUA's June call reports beside the banks in each county. NCUA reports shares by credit union, not by office, so each county figure for a credit union is our estimate and labeled as one. In June 2025, $146.3 billion (7.2%) of the $2,041.6 billion held at 4,460 credit unions couldn't be placed in any county, mostly balances of members who bank online or live away from the offices. The Mortgage tab's county lender lists also name credit unions, from filed HMDA data. Do credit unions count in deposit market share? explains the estimate.
Frequently asked questions
Why is credit union ROA lower than bank ROA?
Not because of taxes: a credit union is exempt from federal income tax, and the fair bank comparison is pre-tax, which only raises the bank figure. In the second quarter of 2026 the credit union system's return on average assets was 0.91%, against a 1.53% pretax ROA for community banks, both aggregates for different groups. A credit union is a not-for-profit cooperative that needs earnings to cover costs and keep a safe level of net worth, and it returns earnings to members through dividends and lower loan rates. A lower ROA doesn't show which is better run.
Is a credit union's net worth ratio the same as a bank's leverage ratio?
No. The net worth ratio is essentially retained earnings over total assets, and 7% makes a credit union well capitalized. A bank's tier 1 leverage ratio also counts common stock and surplus, deducts goodwill and most other intangibles, and divides by average assets, with 5% as the well-capitalized line. Complex credit unions using the CCULR need 9%, and banks using the community bank leverage ratio have needed more than 8% since July 1, 2026.
What is a good loan-to-share ratio?
There's no single right level. NCUA reads a higher ratio as a greater chance the credit union will need outside funding, so judge it with the credit union's liquidity and borrowings and against credit unions of similar asset size. The system ratio, total loans over total shares and deposits, was 82.9% in the second quarter of 2026. The median bank's loan-to-deposit ratio in our data was 80.16%, but that figure uses net loans and is a median, so the two don't line up.
Do credit unions pay taxes?
Not federal income tax. Federal law exempts a federal credit union's income from federal taxation, though its real estate and other tangible property can be taxed, and an NCUA legal opinion describes federal credit unions as exempt from state income taxes too. State-chartered credit unions are exempt from federal income tax under section 501(c)(14)(A). Banks organized as Subchapter S corporations don't pay corporate-level tax either; their shareholders are taxed on the income.
Can you benchmark a credit union against banks?
Only loosely, as context rather than as a peer group. Compare the credit union's ROA with banks' pre-tax ROA, and compare capital by how far each institution sits above its own requirement rather than by the raw ratios. For like-for-like peers, NCUA's Financial Performance Report shows peer ratios for credit unions of similar asset size. BankingLens keeps credit unions out of its bank peer groups and percentiles for these reasons.
Where these figures come from
Credit union figures come from NCUA, through its second quarter 2026 release and its quarterly data as reported by CU Today. Bank aggregates come from the FDIC Quarterly Banking Profile, and bank medians are computed by BankingLens from the call reports of the 4,238 FDIC-insured banks and savings institutions for the quarter ending June 30, 2026. You can see these bank ratios for a real bank, ranked against its FFIEC peer group, on the sample scorecard for Frost Bank. Plans that cover your state or every bank start at $29 a month (pricing).