U.S. Eagle Federal Credit Union had recorded few commercial charge-offs until the third quarter of 2024, when the New Mexico credit union wrote off $1.3 million, a net charge-off rate just under 2%.
Over the next four quarters, the credit union wrote off $6.8 million in commercial loans, with net charge-off rates peaking at 3.66% in the second quarter, according to NCUA data drawn from Callahan's Peer Suite. Few loans were charged off in last year's fourth quarter.
Michael Moore, U.S. Eagle's president/CEO, said the higher net charge-off rate is "a positive signal that we are making progress working these troubled loans off the balance sheet."
U.S. Eagle of Albuquerque ($1.45 billion in assets, 97,686 members) was one of seven credit unions that accounted for 22% of 60-day-plus commercial delinquencies in the fourth quarter.
U.S. Eagle's commercial delinquency rate has been above 11% for eight of the past 15 quarters since the start of 2022. It has risen from 19.8% in September 2024 to 28.1% at Dec. 31, 2025.
It held $261 million in commercial loans on Dec. 31, accounting for 24.4% of its total loans.
Moore said many of U.S. Eagle's problem loans came from a U.S. Small Business Administration and USDA program that ran into trouble as rates began rising after the pandemic.
"During this time, some of our SBA/USDA borrowers began to show signs of stress and we ultimately made the decision to exit this line of business," Moore said. "However, in 2025, a handful of these credits experienced further deterioration."
U.S. Eagle lost $10.3 million (ROA -2.82%) in the fourth quarter, after losing $5.5 million (ROA -1.48%) in 2024's fourth quarter. For the year, it lost $30.2 million (-8.26%), worsening from a $2.2 million loss (-0.59%) in 2024.
Moore said the losses were "solely due to reserves on the specialty SBA/USDA portfolio."
"Outside of these reserves, we have a solid balance sheet and remain operationally profitable with our consumer and real estate portfolios showing below peer delinquency and charge-offs," Moore said.
"Looking ahead, our focus is on disciplined growth, strong risk management and maintaining responsible lending practices as we always have," he said. "As we progress with this trajectory, you will see our commercial delinquency ratio fall in tandem with continued increases in commercial charge-offs."
Contact Jim DuPlessis at Jim.DuPlessis@arc-network.com.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.