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NCUA is watching growth in credit unions' low-rate, first mortgages and long-term delinquencies as it continues its focus on credit risk, interest-rate risk, liquidity and concentration risk for credit unions in 2012, the agency said in Letter to CUs 12-CU-01.

The letter, released this week, takes a look at trends seen in call report data as of Sept. 30, the latest available. It said growth in low-rate first mortgages continues to "far exceed" growth in overall loans. Credit unions holding onto long-term, fixed rates mortgages, NCUA warns, will be subject to negative margins when interest rates rise and short-term funding costs exceed income from those loans.

"Although overall delinquency and net charge-offs were relatively stable through the third quarter, the percentage of loans with delinquencies 12 months or longer increased," according to the letter, signed by NCUA Chairman Debbie Matz. "This increase in long-term delinquencies indicates that charge-offs may spike in the near future."

Credit risks are still constraining credit union performance, NCUA says, pointing to historically high delinquencies and charge-offs in real estate, business and participation loans. Credit unions should regularly evaluate their allowance for loan loss account and fund it fully, the agency wrote.

Other areas of credit risk include modified loans, which carry a high risk of default, and new and outsourced loan programs (including non-federally guaranteed student loans and third-party indirect loan programs.

NCUA also notes that a majority of credit union member balances are in rate-sensitive accounts, a less stable funding source than regular shares or share drafts.