The loan-to-share ratio is a credit union’s total outstanding loans divided by its total member share deposits, expressed as a percentage. It shows how much of the money members have deposited is currently working as loans to other members. At the end of the fourth quarter of 2025, the average across all federally insured credit unions was 83.2%, meaning roughly 83 cents of every deposited dollar was funding someone else’s loan. That figure was 84.0% a year earlier.1National Credit Union Administration. Quarterly Credit Union Data Summary 2025 Q4
Because credit unions are member-owned cooperatives that fund loans primarily from member deposits rather than outside capital, the ratio is one of the clearest signals of how an institution is balancing lending against its ability to meet withdrawal requests.
The Formula
Divide total loans by total shares, then multiply by 100. The NCUA pulls both figures from specific account codes on each credit union’s quarterly Call Report.2National Credit Union Administration. Financial Performance Report Ratio and Formula Guide
A result of 75% means 75 cents of every dollar in member deposits is out as loans and 25 cents remains for liquidity, investments, or new lending. When you compare ratios across time, both numbers should come from the same reporting date; quarter-end or year-end snapshots keep seasonal swings from distorting the picture.
What Counts as Loans and What Counts as Shares
The Loan Side
Total loans include every outstanding balance members owe the credit union: mortgages, auto loans, personal loans, credit card balances, and commercial business loans. Participation interests in loans originated elsewhere count when the credit union holds a share of those loans on its books.
One detail matters here. Unfunded commitments such as approved-but-undrawn lines of credit and unused home equity lines are excluded. The NCUA tracks those separately, so they don’t inflate the ratio.2National Credit Union Administration. Financial Performance Report Ratio and Formula Guide Only balances actually disbursed and outstanding count.
The Share Side
“Shares” is credit union terminology for what banks call deposits. The total includes regular savings accounts, share draft accounts (the checking-account equivalent), share certificates (the CD equivalent), money market accounts, and IRA or other retirement accounts held at the credit union. Together, these accounts form the primary funding base for lending.
How to Read the Number
The national average gives useful context, but the right ratio for any individual credit union depends on its size, membership base, and risk tolerance. The NCUA does not impose a hard regulatory cap. Examiners look at the ratio alongside other liquidity and risk indicators.
Ratios in the 60% to 70% range indicate a credit union sitting on substantial liquidity. Withdrawal surges are easily absorbed, and new lending can ramp up quickly. The tradeoff is that idle deposits earn less than loans do, which squeezes income and can limit the rates the credit union pays on savings.
A ratio in the 80% to 90% range reflects aggressive but manageable lending. Most of the deposit base is working, generating interest income that funds operations and member dividends. Liquidity is tighter, and the institution needs a solid plan for handling unexpected cash demands.
Once the ratio approaches or exceeds 100%, the credit union has effectively deployed all member deposits into loans. New lending has to be funded from outside sources, and the internal buffer against withdrawal surges is thin. This is where examiners start paying close attention to contingency planning.
Where the Ratio Fits in NCUA Oversight
Every federally insured credit union files a quarterly Call Report (NCUA Form 5300) with the raw financial data used to calculate the loan-to-share ratio and dozens of other metrics.3National Credit Union Administration. 5300 Call Report FAQs The NCUA uses that data to build Financial Performance Reports that compare each credit union’s ratios against peer groups of similar-sized institutions. A ratio significantly above or below peer norms will draw questions during a supervisory examination.
Federal Liquidity Requirements Tied to the Ratio
A high loan-to-share ratio pushes a credit union closer to the liquidity rules in 12 CFR 741.12, which impose tiered requirements based on asset size:4eCFR. 12 CFR 741.12 – Liquidity and Contingency Funding Plans
- Credit unions under $50 million in assets must maintain a basic board-approved written liquidity policy and a list of contingent liquidity sources they can tap in an emergency.
- Credit unions at $50 million or more must establish a documented contingency funding plan that addresses liquidity shortfalls under a range of stress scenarios, identifies contingent funding sources, and lays out clear escalation procedures.
- Credit unions at $250 million or more must, in addition, establish and document access to at least one federal liquidity source, either through Central Liquidity Facility membership or Federal Reserve Discount Window borrowing access, and periodically test that access.
The NCUA considers a failure to maintain adequate liquidity risk management an unsafe and unsound practice.5National Credit Union Administration. Interagency Policy Statement on Funding and Liquidity Risk Management
What Credit Unions Do When the Ratio Runs High
A high ratio doesn’t necessarily mean lending has to stop. It means new loans have to be funded from somewhere other than member deposits, or the numerator has to come down. Several tools do that work.
Federal Home Loan Bank Advances
Credit unions that are FHLB members can borrow against their loan portfolios to fund new lending. During 2022 and 2023, when loan growth outpaced deposit growth at many institutions, FHLB advances became a primary bridge. Credit unions typically pledge mortgage and real estate collateral to the FHLB while reserving assets like auto loans as collateral for the Federal Reserve, maximizing total borrowing capacity.
Central Liquidity Facility
The Central Liquidity Facility is a mixed-ownership government corporation within the NCUA, created by Congress to meet the liquidity needs of credit unions.6Office of the Law Revision Counsel. 12 USC 1795 – Congressional Findings Membership is voluntary and open to federal credit unions, federally insured state-chartered credit unions, and privately insured credit unions.7National Credit Union Administration. Central Liquidity Facility The CLF functions as a backup lender when normal funding sources fall short.
Loan Participations
A credit union can sell participation interests in existing loans to other credit unions. The selling institution reduces its loan total, and therefore its ratio, while keeping the member relationship and continuing to service the loan. The NCUA recognizes participations as a common portfolio management tool for managing regulatory limits and concentration risks.8National Credit Union Administration. Evaluating Loan Participation Programs If the sale includes recourse provisions where the seller retains risk, it may be treated as a secured borrowing rather than a true sale, which would not reduce the ratio.
Deposit-Side Levers
Credit unions can also work the denominator. Certificate promotions with competitive rates attract new money. Tiered savings products aimed at specific groups such as retirees or younger members bring in deposits from segments the credit union isn’t fully serving. Digital banking features make it easier for members to keep their primary deposits in-house rather than splitting funds across multiple institutions. Tightening underwriting or slowing new originations also brings the ratio down over time, though that pulls against the credit union’s core mission of providing affordable credit.
Institutions that manage the ratio well treat it as a rolling planning metric. Building it into asset-liability committee discussions, stress testing it against scenarios where deposits decline or loan demand spikes, and keeping pre-established relationships with external funding sources in place all reduce the odds of getting caught in a squeeze.