Lending activity at credit unions nationwide accelerated in the second quarter, though mortgage growth lagged behind all other categories.
According to a quarterly report  from the National Credit Union Administration  (NCUA), institutions last quarter reported $673.9 billion in outstanding loan balances, an increase of 9.8 percent compared to the second quarter of 2013—the largest annual growth since the first quarter of 2006, the group reported.
NCUA attributed the growth to strides made by the economy after a weak first quarter.
"A stronger economy and a stronger credit union system go hand-in-hand," commented NCUA board chairman Debbie Matz.
Lending was up all-around, ranging from year-over-year growth of 27.5 percent in smaller short-term loans in the year's first half to 9.9 percent in first mortgage loans in just the second quarter.
The association also recorded improvements across other metrics, including credit union membership, which grew by more than 900,000 in the second quarter to surpass 98 million.
At the same time, the number of federally insured credit unions fell to 6,429, a decline of 3.8 percent the group called "consistent with recent consolidation trends within the credit union system."
Of those federally insured credit unions remaining, 448 hold more than $500 million in assets each, adding up to $760 billion in combined assets—69 percent of the credit union system's total $1.1 trillion in assets. They also reported faster growth and higher returns on average assets than the system as a whole.
NCUA also reported that federally insured credit unions remain well-capitalized, with 97 percent reporting a net worth at or above the 7 percent required by law. That compares to 96.2 percent at the end of the second quarter last year.
The group's report did reveal one cause of concern in the system: While investments with maturities greater than three years declined slightly from the first quarter to the second, they remained $5 billion higher than a year ago, posing an interest-rate risk for federally insured institutions.
"[T]he slight decrease in long-term investments as a share of assets over the past quarter is not enough to alleviate interest-rate risk," Matz said. "Long-term fixed-rate assets remain elevated, and interest-rate risk continues to be a key concern and a supervisory priority for NCUA."