Third-quarter Call Report information released Thursday by theNCUA shows that while the number of credit unions continues tofall, the financial condition of those remaining continues toimprove.

The industry saw gains in lending, loan quality, membership, net worth and assets.

Credit unions hungry for loan activity saw continued improvementin the third quarter, with outstanding loans growing 1.6% to $591.1billion outstanding, a $9.4 billion gain from the previous quarter.That follows a similar 1.7% increase in the second quarter. Totalloans have increased for six consecutive quarters, the NCUAsaid.

Broken down by loan category, private student loans increasedthe most, posting a 12.83% gain during the 3^rd quarterand a nearly 38% annualized increase. Payday alternative loansmarked the second largest gain, with a 5.2% increase during thequarter ending Sept. 30.

The credit union bread-and-butter loan category, autos, also sawgains in the third quarter. New auto loans climbed 3.3% and usedauto loans rose 2.7%.

First mortgages increased by 1.3% and member business lending increased by 1.5% to $40.8 billionoutstanding. The only lending category that saw a decrease was aslight dip in “other” real estate loans, which represents equitylending.

As outstanding loans increased, so did loan quality: delinquencyfell 3 basis points to 1.17% and net charge offs dropped by 2 basispoints to 0.73%. This is the third consecutive quarter thatdelinquencies and charge-offs have decreased, the NCUA said.

New bankruptcy filings by members were very encouraging, with a15.2% decrease in members filing for bankruptcy protection.However, charge-offs due to bankruptcy – 21.5% – remained thesame.

Membership increased by 742,847 to 93.9 million as of Sept. 30,a quarterly growth rate of 0.8%. However, the trend of industryconsolidation continued with, the number of federally insuredcredit unions declining from 6,961 to 6,888.

Net worth increased 2% to $104.5 billion, an increase of $2.1billion for the quarter. The resulting average capital ratio was10.31%.

“Third-quarter statistics show the credit union industrycontinues to recover from the economic downturn,” NCUA BoardChairman Debbie Matz said. “Consumers increasingly chose creditunions as their financial services providers. Ongoing growth inlending, continued declines in delinquencies and charge-offs, andstrong net income year-to-date all demonstrate a strengtheningeconomy.”

Net income declined slightly, by 0.2%, but year-to-date netincome of $6.4 billion as of Sept. 30 is still higher than 2011'syear-end figure of $6.3 billion, the NCUA said. Return on averageassets ratio remained the same at 86 basis points.

Total assets grew by $5.3 billion to end the third quarter at$1.0129 trillion. Total share accounts rose modestly, growing by$928.9 million to $869.7 billion. Money market shares grew by 0.9%,non-member deposits increased by 0.7%, and IRA/Keogh accounts roseby 0.6%.