Much-needed deposits increased at the nation's largest credit unions during the first quarter, but the liquidity came at a price: Profits, at $572.8 million, were flat by comparison with the fourth quarter.

Net income was off 4% from the first quarter of 1994, when it totaled $598.8 million.

Lured by higher interest rates, deposits increased 2.6% in the quarter, to $182.5 billion, compared to the fourth quarter. The call report data were collected by the National Credit Union Administration from 1,160 credit unions with more than $50 million of assets.

"Savings growth has picked up, and that's good," said Tun Wai, chief economist at the National Association of Federal Credit Unions. "Credit unions have been increasing their savings rates."

Loans outstanding increased 1.5%, to $124 billion, from Dec. 31 to March 31.

Many credit unions last year found themselves in a bind as loan demand grew but savings growth slowed. It's too early to be certain, but Mr. Wai said that contradiction could be easing.

Paying more for deposits caused the industry's cost of funds to jump 14.6% in the first three months of 1995.

Assets of the 1,160 credit unions grew 2%, to $206.4 billion.

The industry's average return on assets dipped 8.3% in the first quarter, to 1.1%.

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