There is a line attributed to Mark Twain that financial historians love: history doesn’t repeat, but it rhymes. Every quarter, roughly nine thousand American banks and credit unions file a call report — a dense, standardized account of exactly how they made and lost money. Read one, and you learn about one institution. Read all of them, side by side, across time, and you start to hear the rhyme.

The first-quarter 2026 call reports are now in for both sectors — FDIC-insured banks and NCUA-insured credit unions. For the first time this cycle, we can put the two ledgers next to each other and read the whole of the U.S. depository system as a single story. That is what this piece does.

Valhalla Business Advisors brings expertise to depository institutions throughout the United States. Our team’s experience partnering with financial institutions over 20+ years enables Valhalla to differentiate for its clientele, including NCUA-insured credit unions and FDIC-insured banks, not only by bringing employee benefit and HR solutions, but also supporting their business through custom data resources.

Valhalla Business Advisors is a consultancy that focuses upon employee benefits advisory and brokerage services; We operate in a fiduciary capacity for our clients. We want our clients to “have their cake, and eat it, too;” Clients receive un-conflicted advice and superior value from our platform, including:

• Employee Benefit Brokerage and Advisory Services
• Benchmarking Support || Including from national cross-cutting datasets and bank and credit-union specific data
• Support of strategies leveraging CUSO structures to enable credit unions to “collaborate to compete”
• Brokerage of Bank Owned Life Insurance (BOLI) and Credit Union Owned Life Insurance (CUOLI) products

We have written previously about specific work for credit unions and banks.

Models || How does valhalla collect data

Valhalla Business Advisors maintains its own consolidated analytics layer for depository institutions. We draw bank data directly from the FDIC’s developer API and credit-union data from the NCUA’s quarterly 5300 Call Report bulk files, then clean, normalize, and benchmark both on a common footing. The bank figures here span 65 quarters back to 2010; the credit-union figures span 29 quarters back to 2019. Every number below is a median across actual filers, not an industry headline, because medians are how you find the typical institution, and the typical institution is where the conversation usually starts.

First, a Primer: Banks and Credit Unions Are Not the Same Animal

Before comparing the numbers, it is worth being precise about why these two sets of institutions behave differently, because the differences are structural, not cosmetic.

On taxes: banks are taxable corporations that pay federal and state income tax on their earnings. Credit unions are not-for-profit, member-owned cooperatives that are exempt from federal income tax — federal charters under the Federal Credit Union Act, state charters under Section 501(c)(14) of the Internal Revenue Code. That exemption exists because a credit union is legally owned by its members and is expected to return value to them through better rates rather than to outside shareholders.

On regulation and capital: banks are chartered and supervised by the OCC, the Federal Reserve, and state banking departments, with deposits insured by the FDIC; they hold capital against a Basel-style framework of Tier 1 leverage and risk-based ratios. Credit unions are chartered and supervised by the NCUA (or a state regulator), insured by the NCUA’s Share Insurance Fund, and measured on a single net-worth ratio, with 7% the line for “well capitalized.” Critically, a credit union cannot issue stock; It can only build capital by retaining earnings and it operates under a field-of-membership (“common bond”) requirement plus a statutory cap on member-business lending of roughly 12.25% of assets.

On loan makeup: those rules push the balance sheets apart. Banks run more diversified, commercial books — commercial-and-industrial lending, commercial real estate, and broader fee income. Credit unions are consumer-centric by design: auto loans, credit cards, other consumer credit, and residential mortgages dominate, while commercial lending is capped and comparatively small. Keep this in mind as you read the margins and efficiency numbers below; A credit union’s thinner return is partly a feature of its model, and its inability to raise outside equity is exactly why every basis point of earnings efficiency matters.

Fewer, Bigger: The Consolidation Grinds On

The most durable rhyme in this data is consolidation. Since the first quarter of 2019, the number of banks filing call reports has fallen by roughly 1,076, or about one in five. Credit unions have followed almost the identical path, down roughly 1,115 over the same window, also about a fifth. The assets have seemingly concentrated into fewer, larger institutions. In Q1 2026, 4,352 banks held about $26.4 trillion, and 4,336 credit unions held about $2.5 trillion.

Earnings and Margins Recovered

Q1 2026 was, by the median, a good quarter for both sectors. The typical bank posted a 1.19% return on assets, up 18 basis points from a year earlier; the typical credit union posted a 0.90% return on average assets, up modestly. Net interest margins widened on both sides to 3.78% for banks and 3.65% for credit unions as funding costs eased relative to asset yields. Banks also became measurably more efficient, with the median efficiency ratio improving nearly three points to 63.2%. Credit unions, carrying a heavier operating model, sat at a median 79.1%.

Scale remains the protagonist. Return on assets climbs almost monotonically with size and the very largest credit unions, at a median 1.38% ROAA, actually out-earn similarly sized banks, a reminder of how far the top of that sector has professionalized.

The Number We Watch Most: What Institutions Pay Their People (incl. Benefits)

Valhalla’s work with banks and credit unions almost always begins in the same place: the cost of people. Employee compensation and benefits is typically the single largest controllable line on a depository institution’s income statement, and it is where our analytics and advisory work earn their keep. In Q1 2026 the median bank spent about 1.44% of assets on compensation and benefits; the median credit union spent about 1.75%. That gap is not an accident, as it reflects the more labor-intensive, branch-and-member service model that defines the credit-union sector.

The dollars matter most when an institution’s earnings are thin and its compensation load is high at the same time. Plot every community bank between $100 million and $10 billion in assets on two axes: compensation as a share of assets against the efficiency ratio. A target quadrant emerges in the upper right: institutions paying above the median for their people while running below the median in efficiency. That is precisely where a benefits and balance-sheet conversation tends to create the most value.

A Regional Lens: PA, NY, NJ, MD, and CT

National medians tell the macro story; advisors live in regional ones. Across our home footprint — Pennsylvania, New York, New Jersey, Maryland, and Connecticut — the same dimensions tell five distinct local stories. A consistent pattern holds throughout: credit unions carry a higher compensation load and run higher efficiency ratios than the banks in their state, while often matching or exceeding them on margin. New Jersey is the sharpest example, where the median credit union runs an 87.5% efficiency ratio against 70.8% for banks, and carries a 1.83% compensation load. Each chart below compares the median bank to the median credit union in that state, on the exact dimensions used in the national view.

The Valhalla advantage

Reading the data is the easy part. Acting on it is where we come in. When we find an institution earning below its peers while paying above them for talent, the question becomes practical: how do you fund and retain the people who drive the franchise without further straining the income statement? For banks, the answer often runs through Bank-Owned Life Insurance (BOLI) — a tax-efficient way to offset rising benefit costs. For credit unions, the analogous tools are 457(b) and 457(f) nonqualified deferred compensation, collateral-assignment split-dollar arrangements, and employee-benefit pre-funding (CUOLI) permitted under 12 CFR 701.19. In either case, we can put a dollar figure on the opportunity — what closing the gap to the peer median is worth per year — before anyone commits to a meeting.

Much of that compensation-and-benefits line is not salary at all; It is the cost of employee health and welfare benefits, the fastest-rising and least transparent expense most depository institutions carry. We bring the same data discipline to all aspects of our business, particularly in health benefits: benchmarking spend per employee against true peers, modeling self-funding and stop-loss alternatives, and demanding real pharmacy-benefit-manager transparency. Every dollar taken out of an inefficient health plan flows straight to the efficiency ratio and to return on assets, and frees capacity to fund the retention structures above. The goal is never to cut what employees receive; it is to stop overpaying for it.

If you run a bank or credit union — or advise one — and you would like to explore these ideas further, reach out to us. We are happy to prepare a custom, institution-specific benchmark on request.

SAMPLE SCOPE OF WORK

APPENDIX

Methodology & Sources

All figures are medians computed from FDIC (banks) and NCUA (credit unions) Q1 2026 call report data, as of March 31, 2026. Bank net interest margin and return on assets use the FDIC’s reported margin and quarterly annualized ROA; credit-union ratios are annualized from year-to-date figures. Compensation reflects salaries and employee benefits as reported. Peer comparisons use actual asset-size ranges. Year-over-year comparisons are against Q1 2025. Asset tiers are harmonized across both sectors as <$100M, $100M–$1B, $1B–$10B, and ≥$10B.

Deeper Dive Example: Pennsylvania, Assets of $500M-$1.5B

To show what this benchmarking looks like at close range, we isolated every Pennsylvania-headquartered depository institution in a single asset band: $500 million to $1.5 billion, the heart of the Commonwealth’s community-banking franchise. Thirty-three banks ($28.5B in combined assets) and fourteen credit unions ($14.0B) file in this range. At the median, the banks out-earn the credit unions (1.07% ROA vs. 0.92% ROAA) on a leaner cost base — a 65.9% efficiency ratio and 1.36% compensation load, against the credit unions’ 77.1% and 1.72%. But the median hides the real story, which is dispersion: bank profitability runs from a healthy 1.31% at the 75th percentile down to just 0.52% at the 25th, and the institutions at the bottom of that range tend to be the ones carrying the heaviest cost of people.

The scatter below plots all forty-seven institutions on the two axes we use nationally: compensation and benefits as a share of assets, against the efficiency ratio. Lean, profitable operators sit in the lower-left; the upper-right “prospect zone” is where a high cost of people meets low operating efficiency. None of this is a verdict on management: it is simply where the data suggests a benefits and balance-sheet conversation seems most likely to create value.

rank	type_B_C	institution	assets_usd_millions	employees	comp_per_employee_usd	roa_pct	nim_pct	efficiency_ratio_pct	comp_to_assets_pct
1	B	PS Bank	662.5	82	91122	1.93	4.09	48.5	1.13
2	B	Harleysville Bank	958.1	103	101126	1.69	3.44	45.9	1.09
3	B	The Dime Bank	1146.2	153	122876	1.67	4.64	52.5	1.64
4	B	Atlantic Community Bankers Bank	923.2	122	166066	1.66	3.16	71.7	2.19
5	B	First Northern Bank and Trust Company	930.4	135	81541	1.65	4.15	54.1	1.18
6	B	Central Penn Bank & Trust	1259.6	163	105742	1.59	4.18	51.4	1.37
7	C	LEBANON	538.0	89	102206	1.58	4.66	67.4	1.7
8	C	PATRIOT	1328.7	228	101064	1.56	3.19	66.8	1.74
9	B	The Honesdale National Bank	1152.1	162	103457	1.46	4.5	52.8	1.45
10	C	FIRST COMMONWEALTH	1481.2	245	114788	1.38	3.97	73.4	1.9
11	B	First National Bank and Trust Company of Newtown	1156.6	120	111567	1.36	3.32	56.9	1.16
12	C	FREEDOM	1485.7	98	150036	1.34	2.51	59.7	0.99
13	B	American Bank	1084.7	65	124985	1.31	3.08	47.0	0.75
14	B	First Resource Bank	811.0	77	137455	1.31	3.83	53.7	1.31
15	B	Jonestown Bank and Trust Company, of Jonestown, Pennsylvania	1004.1	158	94835	1.3	4.18	61.5	1.49
16	B	Asian Bank	684.8	46	113565	1.27	3.46	47.9	0.76
17	B	The Juniata Valley Bank	900.9	125	95520	1.24	3.47	59.6	1.33
18	C	SERVICE 1ST	831.2	147	103247	1.23	3.88	74.2	1.83
19	B	Woodlands Bank	633.4	107	80299	1.12	3.41	65.9	1.36
20	B	Hatboro Federal Savings, FA	590.5	38	133263	1.11	3.15	53.0	0.86
21	B	Washington Financial Bank	1456.3	155	121961	1.09	3.56	64.4	1.3
22	B	Mercer County State Bank	601.7	108	87815	1.07	3.81	66.9	1.58
23	B	New Tripoli Bank	672.7	63	122222	1.04	3.28	61.6	1.14
24	C	BELCO COMMUNITY CREDIT UNION	983.6	213	92113	1.02	3.06	79.1	2.0
25	C	DIAMOND	1216.0	215	120734	0.93	3.08	80.4	2.14
26	C	PEOPLE FIRST	1031.2	157	117986	0.92	3.83	81.7	1.8
27	B	Enterprise Bank	507.4	67	117313	0.88	3.25	72.8	1.55
28	C	SUN EAST	915.6	144	107906	0.88	3.28	79.8	1.7
29	B	InFirst Bank	673.0	116	97276	0.86	3.83	68.9	1.68
30	C	ARMCO	717.6	104	111641	0.84	2.88	76.9	1.62
31	B	Slovenian Savings and Loan Association of Canonsburg	622.5	20	143200	0.84	2.28	39.3	0.46
32	C	MERCK SHARP & DOHME	1011.5	92	119525	0.79	2.35	74.1	1.09
33	B	Ameriserv Financial Bank	1468.5	276	83667	0.73	3.35	76.6	1.57
34	B	Phoenixville Federal Bank and Trust	654.4	81	112790	0.71	3.16	73.4	1.4
35	C	ERIE	813.8	217	88853	0.64	3.58	86.7	2.37
36	B	Ambler Savings Bank	516.8	59	160203	0.6	2.82	79.7	1.83
37	B	Marquette Savings Bank	1410.6	164	107341	0.52	2.73	79.3	1.25
38	C	APCI	689.3	55	121743	0.52	1.93	77.2	0.97
39	B	First Federal Savings and Loan Association of Greene Co	1039.5	130	98769	0.47	2.71	77.3	1.24
40	B	Hyperion Bank	553.0	45	170844	0.42	3.22	78.7	1.39
41	B	Pennian Bank	657.4	136	87647	0.38	3.07	88.0	1.81
42	C	ARDENT	931.3	112	115138	0.38	2.4	87.8	1.39
43	B	Quaint Oak Bank	643.6	132	120848	0.34	2.98	87.2	2.48
44	B	Mauch Chunk Trust Company	637.9	94	88170	0.28	2.71	85.8	1.3
45	B	CFSBANK	752.5	101	99446	0.16	2.16	93.4	1.33
46	B	Brentwood Bank	1040.7	109	138899	0.1	2.35	95.6	1.45
47	B	Reliance Savings Bank	663.1	89	111371	-0.11	3.35	101.2	1.49