Even though most credit unions are still searching for ways togrow their loan portfolio, federally insured credit unions areadding more loans to their books, according to second quarter callreport data compiled by the NCUA and released Friday.

Credit unions booked $581.7 billion in outstanding total loansduring the second quarter, an increase of 1.7%, the NCUA said.Total loans by credit unions have increased for five consecutivequarters. Loans for first mortgages increased by 1.7% between April1 and June 30, 2012, while new and used auto loans each rose by 2.8%.

Memberbusiness lending increased by 1.2% to $40.2 billion as of June30, up from $39.7 billion as of March 31. Additionally, short-termsmall loans grew by 23.9% to $16.7 million.

“Lending is the investment needed to support a recoveringeconomy. So, the largest quarterly increase since the fall of 2008demonstrates that credit unions are playing an important role inefforts to create jobs, stimulate small businesses and revitalizecommunities,” said NCUA Board Chairman Debbie Matz.

She added that credit union performance numbers improved duringthe second quarter in every category, as assets, earnings, and networth rose, while charge-offs, bankruptcy filings, and loan lossreserves declined.

During the quarter, membership increased by $643,322 toreach a new record high of 93 million. An additional $2.7 billionin savings were deposited during the second quarter. Total savingsrose 0.3% to $868.8 billion.

The trend of larger, but fewer credit unions continued duringthe reporting period. Total assets grew by $5.9 billion to anew record high of $1.0076 trillion; however, the industry lost 59federally insured credit unions, slipping below the 7,000 mark fora new industry total of 6,960.

Net worth continues to recover from the financialmeltdown's loan losses and corporate assessments, increasing by 15basis points during the second quarter to 10.16%.

ROAA saw a slight increase of one basis point over the previousquarter. Credit unions generated $59.7 million more in quarterlynet income, and the NCUA credited increases in fee income anddeclines in cost of funds and loan losses.

Delinquencies fell 24 basis points to 1.20% of total loans. TheNCUA said its recent troubled debt restructuring rule is behind theimpressive improvement. The rule allows credit unions tomodify loans without having to classify TDRs as delinquent untilthe member makes six consecutive on-time monthly payments.

Net charge-offs fell by three basis points to 0.75% ofaverage loans. New bankruptcy filings by members also declined17.3% to 58,386 members filing for bankruptcy during the quarter.However, loans charged off due to bankruptcy rose slightly, to21.4%, up from 20.8% during the first quarter.