NCUA data for the end of 2007 showed that the 100 largest credit unions held 27% of all members, which is up from 26% at the end of 2006. These credit unions accounted for more than 60% of the membership gain in 2007, Colby said.

Credit unions have much to offer but Colby said they "should not count on the pure loyalty factor being a growth engine going forward."

Even as NCUA approved 19 mergers in January, there was a net loss of just one credit union that month, according to the report. An estimated 8,425 credit unions were operating at the end of January. Colby said data to come in April will likely show fewer credit unions.

Billion dollar credit unions continue to increase with 127 of them in existence at the end of 2007, according to just released industry data. Colby said these billion dollar credit unions hold 40% of the movement's total assets.

"For comparison purposes, at year-end 2006 there were 115 credit unions with assets over a billion, and they held 37% of all assets," Colby said. "On the opposite end of the asset spectrum, there are 4,861 CUs [58% of all credit unions] with assets less than $20 million. These credit unions hold roughly 4% of the movement's assets."

In other areas of the trends report, surplus funds rose a healthy 3.0% in January on the strength of solid member demand for certificate of deposits and credit union borrowing, Colby said. Currently, surplus funds are $202 billion or 7.7% above the January 2007 level.

"Tax refunds, bonuses, and increasingly cautious members will increase deposit inflows and thus surplus funds well into the second quarter–a usual seasonal pattern," Colby said. "This should relieve any near-term liquidity concerns."

Further alleviating concerns is the fact that 62% of credit union investments have a maturity of one year or less, Colby assured. Surplus funds are now almost 26% of total assets, but some of this comes from borrowing. Credit union borrowing at $35 billion is up 6.7% in January and up 64.3% or $13.6 billion over the past year.

At $653 billion, total credit union savings are up 5.9% over the past year and $2.8 billion in January, Colby said, adding while these results are encouraging, they are no where near the 15.8% "flight to safety" growth surge that the industry saw at the end of the previous recession. Total assets are up 7.4% over the past year to $782 billion. Increased borrowing by credit unions is holding asset growth well above deposit inflows, Colby said.

"Competition for deposits from banks and brokerages desperately seeking liquidity, will limit credit union upside growth potential during this economic cycle," Colby said. "One thing that hasn't changed is credit union's composition of net deposit inflows."

Credit unions have added $26 billion in CDs with the most current rate paid on one-year term at 4.0%, and lost $8.5 billion in regular shares. The industry's cost of funds is on the rise and CUNA Mutual anticipates that intense competition will keep rates paid from matching Federal Reserve rate cuts, according to the report.

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