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Federal credit unions add members

By Marcie Geffner · Bankrate.com
Thursday, September 12, 2013
Posted: 6 pm ET

Federally insured credit unions posted very healthy results in the second quarter of this year, according to the National Credit Union Administration, a federal agency in Alexandria, Va., that charters, supervises and regulates federal credit unions.

Federally insured credit unions recorded brisk growth in lending, a very slight improvement in total assets and record numbers of members during the quarter, the NCUA said.

Lending rose 2.3 percent in the second quarter, compared with the first quarter, and has risen 5.5 percent cumulatively in the last four quarters -- the strongest four-quarter growth since the start of 2009. Lending was up in multiple categories, including first mortgages, new-auto loans, used-auto loans and member business loans, the NCUA said.

Total assets held by federally insured credit unions rose $669 million in the second quarter, a 0.1 percent increase compared with the first quarter. Share and deposit accounts declined $464 million to $909.5 billion, but savings, money market, and individual retirement and Keogh accounts showed slight increases. Overall, these credit unions remain "well-capitalized," the NCUA said.

Membership in federally insured credit unions grew 0.6 percent to a record high of 95.2 million people. Nearly 2.1 million people have joined a credit union in the last four quarters, the NCUA said. Though membership was up, the number of federally insured credit unions dipped to 6,681, a loss of 72 organizations. Most consolidations were voluntary mergers, the NCUA said.

The second-quarter delinquency ratio of federally insured credit unions was 1.04 percent.

In a statement, NCUA board Chairwoman Debbie Matz said the increases in federally insured credit union lending, net worth and membership were especially positive signs.

"The brisk loan growth shows that federally insured credit unions are meeting the needs of more borrowers and putting their assets to productive use," Matz said. "Credit union membership continues to reach a new milestone each quarter."

One soft spot in the second quarter results was that smaller, federally insured credit unions continued to underperform their larger counterparts.

Federally insured credit unions with more than $500 million in assets held more than two-thirds of total assets during the quarter and reported a higher return on average assets than credit unions collectively.

"Smaller credit unions continue to face challenges with making loans, generating earnings and attracting members," Matz said.

Can smaller credit unions keep up with larger credit unions and banks?

Follow me on Twitter: @marciegeff.

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