A consumer emphasis on saving and affordable home prices largely affected Nevada FCU's 2010 loan performance trends, Beal said. In the Las Vegas metropolitan area, median prices for existing single-family homes fell 3.7% from the fourth quarter of 2009 to the fourth quarter of 2010, according to the National Realtors Association.

“Home values have been low, which created opportunities for people to buy,” Beal said. “Demand for consumer loans has been very low because people who manage their money well want to reduce debt and build savings.”

Due to poor consumer loan activity, plus the fact that Nevada FCU sold every loan it originated in 2010, Beal said the credit union's loan portfolio shrank from $485 million to $432 million, adding that fee revenue helped offset the decline in interest income.

Tom Dorety, CEO of the Tampa, Fla.-based, $5.02 billion Suncoast Schools FCU, reported low loan demand in 2010 but saw a recent improvement in first- mortgage and new and used auto loans. Low property values have led to losses in home equity loans, and loan delinquencies and charge-offs, while still high, have begun to stabilize at the credit union, Dorety said.

“Because of new relationships we've made and better pricing, both new and used auto loans have improved,” Dorety said. “Our first-mortgage loans are due to stabilization of home prices in the market, and a lot of it has to do with consumer confidence.”

Suncoast Schools FCU holds first-mortgage loan assets of $1.68 billion and new and used auto loan assets of $809 million. Its total number of delinquent loans fell from $220 million to $196 million from December 2009 to December 2010, while charged-off loans increased slightly, from $157 million to $163.5 million, in the same one-year period. The credit union continues to operate in one of the most turbulent states in the country economically–Florida's unemployment rate is at 11.9% according to the Bureau of Labor Statistics, and National Realtors Association data states median home prices of existing single homes are down 6.1% from the fourth quarter of 2009 to the fourth quarter of 2010.

“Unemployment has leveled off, and we've seen a stabilization of home prices,” Dorety said. “Right now, we consider anything that is stable to be a positive trend.”

Financial performance reports from credit unions in California and Arizona show similar trends of strong first-mortgage loan performance activity, weaker auto loan activity and improvements in charge-offs and delinquencies. The $3.57 billion, Bay Area-based Patelco CU saw a rise in first-mortgage loan assets from $1.27 billion to $1.32 billion from December 2009 to December 2010 and a drop of $175 million in new and used auto loan assets in the same one-year time span. Charged-off loans decreased from $87 million to $70 million, and delinquent loans fell from $105 million to $102 million.

The $404 million Arizona Central CU's first-mortgage loan assets went up from $31.7 million to $43 million from December 2009 to December 2010, while new and used auto loan assets decreased from about $162 million to $119 million. Delinquent loans decreased from $11 million to $5.7 million and charged-off loans from $10.6 million to $9.6 million from December 2009 to December 2010. Arizona's housing market may have experienced the largest drop among the four sand states, with median single-family home prices in the Phoenix metropolitan area falling 8.1% from the fourth quarter of 2009 to the fourth quarter of 2010.

Jack Gaffney, executive vice president of lending for the $44 billion Navy Federal CU, for which sand state residents account for 25% to 30% of its members, said 2010 brought increased mortgage and used auto loan activity in the sand states, while the new auto loan market remained depressed there. About 22% of Navy Federal's mortgage loan assets originate from these states, with the strongest markets in California and Florida, Gaffney said. Delinquency rates remained higher for loans in the sand states, at 3% compared to 2% in other states, he said.

The $1.7 billion New Hampshire-based Service CU, which has approximately 8% of its members living in the sand states, reports slightly different loan performance trends for 2010. Lending Vice President Fawn Terwilliger said she's seen stable overall loan activity, delinquency rates that are on par with non-sand states and a slowing demand for real estate loans in all states. She said as residents of distressed areas, sand state members have been faced with tightened credit guidelines, such as higher credit score requirements.

Terwilliger added California represents 12% of Service CU's 2010 loan charge-offs and that immaterial consumer loan charge-offs took place in Arizona, Florida and Nevada, with only one resulting from a member bankruptcy.

“The sand states are indeed hit the hardest with the severe decline in property values,” Terwilliger said. “The improvement reflected in unemployment is not significant enough to have a positive impact on mortgage volumes given the decline in property values.”

Looking ahead at their 2011 loan portfolios, credit union executives expressed optimism. Dorety said he's hopeful Suncoast Schools FCU will improve its loan growth and performance this year, and Gaffney anticipates better news for real estate markets in the sand states.

“We expect the housing market to slowly return to a normal state,” Gaffney said.

Beal said he anticipates a gradual improvement.

“It all depends on the Nevada economy, which is stable yet fragile,” Beal said. “We're hoping for some improvement.”