Three Midwest Credit Unions Issue $323 Million in Auto Securities

Stifel Investment Services of New York and Bank of America of Charlotte acted as joint lead managers on the issue, the first credit union sale of auto-backed securities since September 2025.

The pool consists of 16,607 loans with balance of $335.1 million, including about $11.8 million not sold to investors but put aside to cover losses. The average loan is $26,636.

A Corporate One news release said the transaction marks its entry into the auto asset-backed securities (ABS) market and a milestone in its strategy to expand credit union access to capital. It said it plans to bring two to four transactions to market each year, "establishing a consistent, reliable liquidity channel for prime auto loan originators and a steady pipeline of high-quality ABS for investors."

"Auto loan securitization transforms loan portfolios into liquidity—helping credit unions manage balance sheet risk and unlock new growth opportunities," Corporate One President/CEO Melissa Ashley said. "Historically, only the largest institutions have accessed these benefits. Our multi-seller platform changes that, enabling credit unions of all sizes to participate on equal footing."

Among the three credit unions, the collateral consists of:

• Wright-Patt Credit Union of Dayton, Ohio ($9.38 billion in assets, 530,264 members as of Sept. 30) put up 10,902 loans with a balance of $200 million ($24,873 average). Its loan-to-share ratio, which was 87.5% on Sept. 30, would have fallen to about 85.1% if the sale had been completed then.
• Everwise Credit Union of South Bend, Ind. ($5.54 billion in assets, 298,696 members) put up 4,225 loans with a balance of $100 million ($29,819 average). Its loan-to-share ratio, which was 90.5% on Sept. 30, would have fallen to about 88.6% if the sale had been completed then.
• Day Air Credit Union of Dayton, Ohio ($873 million in assets, 53,817 members) put up 1,480 loans with a balance of $35 million ($30,538 average). Its loan-to-share ratio, which was 100.3% on Sept. 30, would have fallen to about 95.6% if the sale had been completed then.

In the Corporate One news release, Wright-Patt CFO Daniel Smith said the transaction "strengthens our liquidity profile and supports long-term growth while delivering value back to our members."

Day Air President/CEO Bill Burke said the sale makes Day Air the first credit union in the nation with less than $1 billion in assets to participate in the issuance of an asset-backed security. "We're looking forward to future cooperative securitizations of Corporate One as part of our ongoing liquidity strategy," he said.

The three credit unions will service the loans for a 1% annual fee.

About 69% of the borrowers are from Ohio, followed by 29% from Indiana. Used cars account for 79% of the loans.

S&P found the weighted average APR for all three are at or close to 8.04%. The average loan had 57.6 months remaining on a 76.9-month original term. About 15% of the loans have terms of 61 to 72 months. The average loan-to-value is 96%.

The bond rating reports shed some light on possible reasons that credit union auto loan portfolios shrank in the past two years.

Here are some statistics on each credit union based on NCUA data through September 2025 drawn from Callahan's Peer Suite and comments from KBRA based on data through June 2025:

Wright-Patt Credit Union

NCUA data shows Wright-Patt held $2.25 billion in car loans at Sept. 30, which were 33% of its total loans. Indirect were 83% of car loans.

KBRA said Wright-Patt's "profitability has been somewhat inconsistent over the most recent five years, primarily due to elevated provisions for loan losses. Charge-offs are concentrated in the unsecured consumer loan and auto loan portfolios."

KBRA said Wright-Patt's auto loan portfolio's credit quality began deteriorating with the mid-2021 origination vintages, and the quality continued to fall through 2023. "In response, WPCU tightened underwriting standards in 2023 and 2024. 2024 origination vintages have shown some improvement in performance through the current period," it said.

Everwise Credit Union

Everwise held $1.48 billion in car loans at Sept. 30, which were 33% of its total loans. Indirect were 91% of car loans.

"Everwise's earnings have lagged peers in recent years," KBRA said, "due to elevated operating expenses that have largely offset net interest income, further eroded by higher provision expenses in recent years. Everwise has strong revenue diversification with significant noninterest income."

Much like Wright-Patt, KBRA said Everwise also experienced rising losses on auto loans from mid-2022 through mid-2024. "While Everwise did not tighten underwriting, as a result of pricing adjustments, originations declined until 2025."

Day Air Credit Union

Day Air held $342.4 million in car loans at Sept. 30, which were 48% of its total loans. Indirect were 91% of car loans.

"Day Air's earnings have been stable with noninterest income consistently contributing around 23% of revenue in recent years," KBRA said.

"Capital remains stable with continued earnings retention. Loss loan reserves are adequate and total loss absorption capacity is strong, supported by a net worth ratio of 13.6% as of June 30, 2025."

KBRA found Day Air's credit quality "fairly stable" through June 2025, although some deterioration has occurred in its originations from the second half of 2021.

Contact Jim DuPlessis at Jim.DuPlessis@arc-network.com.