ALEXANDRIA, Va. – Credit unions are riding a crest of improving asset quality and the attendant fall in loan loss reserves to produce record net income for 2012, another sign of the improving economy.

Florida’s Suncoast Schools FCU, which was mired in red ink through the financial crisis, reported a record $70.3 million net for 2012, bolstered by a halving of its $101.5 million 2011 provision for loan losses  to $51 million, for a return-on-assets of 1.35%.

Fairwinds CU reported a halving of loan loss provisions for 2012 from $19 million in 2011, helping boost net income to $8.8 million for the year.

San Diego County CU reported a 52% decline, or $13 million, in loan loss provisions, helped push its net income up 25% for the year to a record $82.9 million, a 1.42% ROA.

Michigan’s DFCU Financial CU reported that 32% lower loan loss provisions helped boost its net income by 34% in 2012 to $27.4 million—even after a record $22 million member dividend.

CUNA’s Chief Economist Bill Hampel predicted the lower loan loss provisions combined with booming mortgage lending and the absence of an NCUA charge will probably raise the industry’s ROA to around 0.90% for the fourth-quarter. “There will be a much lower (loan loss) provision expense,” said Hampel, who noted that loan losses appear to have peaked for credit unions.

Illinois’s CEFCU reported lower loan loss provisions helped boost net income by 18% to $38.2 million, even after paying members a $9 million bonus dividend.

And Utah’s American First CU and Mountain America CU both reported booming nets fueled by plunging loan loss reserves.

Other credit unions are reporting big numbers for 2012.

Kinecta FCU went from a $30.6 million loss for 2011 to a $27.7 million net for 2012.

Navy FCU, which hit $52.5 billion in assets at year-end, reported a 17% rise in net income to $760.4 million--for a whopping 1.45% ROA--even with a slight increase in loan loss provisions.

Minnesota’s Wings Financial CU reported lower loan loss provisions helped produce a record $46.9 million net for 2012.

Other credit unions reporting strong 2012 nets: First Technology FCU ($62.8 million); Achieva ($10.6 million); Grow Financial FCU ($14.9 million);Education Employees CU ($28.8 million); MidFlorida CU ($17.3 million); VyStar CU ($27.7 million); Lake Michigan CU ($78.4 million); and TruMark CU ($14.5 million).

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