How Cobalt Credit Union is expanding nationwide reach, diversifying its portfolio and boosting margin with Upstart
In an overbanked Omaha market with net interest margin in the 2 percent range and thin indirect auto yields, Cobalt Credit Union (Cobalt) needed growth without adding branches or headcount.
By partnering with Upstart, Cobalt:
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Expanded lending and membership nationwide beyond Nebraska and Iowa
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Increased net interest margin to 4 percent1
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Scaled personal loans, HELOCs and auto refinance and retail while consistently returning their target net yield after costs
Aligning leadership and the board around a new growth model
Cobalt’s goal was to improve net interest margin, which was in the low twos, and the credit union was leaning heavily on indirect auto volume with thin yields. The goal was to increase net interest margin to 4 percent, a target Cobalt has since achieved. In an overbanked Omaha market, growing loans typically meant sacrificing spread.
The turning point came when Cobalt secured the ability to accept members nationwide. Once the charter expanded, an Upstart partnership made sense: a national field of membership could support meaningful volume. Upstart’s all-digital model and AI powered credit decisions, combined with its nationwide marketing aligned directly with Robin’s strategy to drive margin higher while shifting away from low-yield indirect auto and simultaneously growing membership.
Strong references from other credit unions and early performance data helped shift internal sentiment from cautious to confident.
We’re comfortable with the risk, we’re hitting the margin targets we need, and we have the flexibility to step outside our comfort zone when the opportunity is right. Just as important, Upstart helps us grow beyond our overbanked home market. This partnership lets us expand the loan portfolio and protect margin at the same time.
Terry Zitkovich
SVP of Lending
Program set-up was a true collaboration. Upstart’s team walked us through all our options across super-prime, prime, and near-prime so we could see exactly how each would impact volume and expected margin. That transparency and responsiveness shifted our internal narrative from hesitant to all-in.
Terry Zitkovich
SVP of Lending
Collaborative onboarding and a light IT lift
The Cobalt team describes implementation as structured and efficient. Upstart provided a detailed program checklist that guided decisions on credit scores, LTVs, DTI thresholds and loss and yield targets across risk tiers and products. Cobalt’s team translated their existing credit standards directly into the Upstart program and rolled them out nationally, with the understanding they could adjust by geography over time. That allowed Cobalt to start from a place of comfort while building a nationwide program.
Both Zitkovich and Rod Latham, Cobalt’s Chief Lending Officer, emphasized the low IT lift. As Zitkovich put it, “Our IT team basically just had to open ports in the firewall,” and Latham summarizes it simply as “just files and funds moving.”
Achieving a high, blended net yield target
Cobalt set a clear economic goal and asked Upstart to build the best lending program to meet it.
I asked Upstart to dial in a net yield after cost of funds, fees, and expected losses, and let them handle the exact mix of risk tiers. Upstart’s AI-powered underwriting delivered that target at the volumes we needed, which is why their personal loans outperform our local approach.
It’s been a great fit, and we’re now adding HELOCs and auto refinance and retail using the same model: We tell them the target, they tune the portfolio.”
Robin Larsen
CEO
A scalable operating model without added admin costs
Internally, one of the biggest mindset shifts was accepting that Cobalt would not decision or service these loans. Upstart handles credit decisioning, servicing and collections; Cobalt funds the loans, onboards members and manages at the portfolio level.
This operating model supports Cobalt’s strategy to scale nationally without opening branches, adding servicing staff , or running complex marketing campaigns across the country.
You get your margin and return, but without the admin costs. So, theoretically, you can scale this thing up as big as you want.
Robin Larsen
CEO
Real-time visibility and ongoing optimization
Governance around the program is both structured and data-driven. Cobalt’s senior leadership reviews Upstart volumes, yields, delinquency and liquidity impacts weekly in its asset-liability management (ALM) meeting, reinforcing that this is a core strategic initiative rather than a side program.
At the same time, Zitkovich and his team monitor performance directly through Upstart’s Performance Console.
The Upstart Performance Console is hugely valuable. I can monitor delinquency, volume and trends day-to-day, even hour-to-hour, without waiting on month-end reports like other vendors.
The team at Upstart has been fantastic every step of the way…
It feels far more like a true partnership than a typical vendor relationship.”
Terry Zitkovich
SVP of Lending
- Findings are reported on information collected by Upstart from March 2025 - February 2026.