Credit union loans outstanding grew faster in the first quarterof 2013 than in any other first quarter since 2008, according tothe NCUA's quarterly industry report released Thursday.

However, small credit unions are lagging behind their largercounterparts, the report said.

Federally insured credit unions added 808,006 members in thefirst quarter to reach a new high of 94.6 million, the NCUA said.But while credit unions added members, the number of federallyinsured credit unions declined to 6,753, a drop of 66 for thequarter.

While she said the report contains many positive signs, NCUABoard Chairman Debbie Matz said she's concerned about the disparaterecovery of credit unions by asset size.

“The 423 largest credit unions had a return on average assets of100 basis points for the quarter,” Matz said in a release. “Incomparison, 2,279 credit unions with less than $10 million inassets had a return on average assets of negative 14 basis points,and 3,007 credit unions with $10 million to $100 million in assetshad a return on average assets of 30 basis points.”

Credit unions with more than $500 million in assets also had networth growth of 10.5%, loan growth of 3.1%, and membership growthof 5% during the first quarter. In comparison, the industry as awhole had net worth growth of 2%, loan growth of 0.4%, andmembership growth of 0.9% during the same period.

Overall, credit unions reported $599.9 billion in total loansduring the first quarter, up $2.3 billion over the previousquarter. Private student loans saw the largest increase, up 11% to $2.2billion outstanding. First mortgage loans increased by 1% to $248.5billion. New auto loans increased 2% to $64.6 billion, and usedauto loans rose 1.5% to $116.9 billion. Net member business loanbalances saw a 1.9% increase to $42.5 billion.

“We continue to remind credit unions to guard against long-termrisks,” Matz said. “In particular, first mortgages, many of whichare at fixed rates, grew as a share of the industry's total loansduring the quarter.

“This could lead to problems when interest rates inevitably rise. In addition, the total amountof non-federally guaranteed student loans jumped 11% for thequarter. A new line of business for many credit unions, these loansoften have higher delinquencies in the long term.”

Delinquencies and charge-offs declined in the first quarter,shedding 14 basis points to 1.02%. The net charge-off ratio alsodropped significantly by 12 basis points, to 0.61%. The declinesreflect significant improvement from the highs of 1.84% fordelinquencies and 1.21% for charge-offs reached in 2009.

While new bankruptcy filings by member increased from theprevious quarter to 64,495, they remained below numbers reportedone year ago. And, the percentage of loan charge-offs due tobankruptcy dropped to 19.3% from 21.5% in the previous quarter.

Total assets grew by 3.3% to $1.06 trillion in the firstquarter, another record high. Industry net worth rose to $108.8billion, up $2.1 billion for the quarter.

Because asset growth outpaced net worth growth, credit unions'net worth ratio fell slightly during the quarter to 10.31%. Theindustry, however, remains well-capitalized with 95.8% of allfederally insured credit unions reporting a net worth above 7%, theNCUA said.

Share and deposit accounts grew to nearly $910 billion in thefirst quarter, up 3.7%. Regular shares, share drafts, money marketshares and non-member deposits all showed quarterly increases,while share certificates experienced a slight decline and IRA/Keoghaccounts remained steady.

The industry's return on average assets ratio fell by 3 basispoints in the first quarter of 2013, but the NCUA said creditunions overall remained healthy at 83 basis points.

Complete details of the March 2013 Call Report are availableonline.