Despite last week's blizzard that literally shut down Washington, Tower Federal Credit Union is still optimistic about the findings from a new report that show the region has several qualities that may make it ideal for stronger economic growth this year.
The $2 billion Tower FCU in Laurel, Md., and the Baltimore-Washington Corridor Chamber commissioned a report that detailed the area's Top 10 superlatives that make the Washington and Baltimore region appealing. The draws included the local real estate market, proximity to federal government agencies, advantageous corporate tax structures, per capita income and relocation of military base personnel to the area as a result of the federal government's base realignment and closure initiatives.
Economist Anirban Basu, chairman and CEO of Sage Policy Group Inc., a Baltimore economic and policy consulting firm, conducted research for the report. He predicted a better economy in the corridor in 2010, citing recent growth in home sales, residential construction, industrial production, retail sales, exports and corporate profits.
"It is essentially impossible to identify a region in the nation, if not in the world, that is as technologically dynamic, recession-resistant, prosperous, educated and that enjoys such elevated quality of life [as the Baltimore-Washington Corridor]," Basu said.
Tower FCU President/CEO Martin Breland said that while many banks pulled back from lending in 2009, the CU invested $800 million in mortgage and consumer loans last year into the region's economy. That figure marked the largest lending activity in the CU's history.
"The footprint of much of our 118,000-member base is right here in the Baltimore-Washington Corridor, and our financial services are focused on the information assurance and intelligence community and all businesses associated with these efforts," Breland said. "This report seemed a perfect fit for Tower."
While there is linkage between the Top 10 superlatives, Breland said if he had to pick the most promising ones, it would be the presence of government agencies and a strong technology sector in the corridor. Tower FCU has not yet ventured into business lending, a strategic move that helps the cooperative concentrate fully on its consumer and mortgage lending services, Breland noted. Meanwhile, opportunities abound for the CU since competitors have pulled back on mortgage loans with many of them choosing to sell them on the secondary market to thwart interest rate risk. Banks have also shifted back to building deposits, which has in turn led to more fees, he added.
Even though Tower FCU is located in one of them most economically sound areas of the country, Breland acknowledged that the CU has felt the impact of a down economy. Like most of the industry, charge-offs have been high over the past few years. Still, a report that highlights a region's attractive features can translate into things like encouraging businesses to consider credit union membership as an employee benefit.
"If there is any message to be had for credit unions is know your local region, the pluses and minuses," Breland said. "And, get out there in front."
Basu presented the superlatives report at a recent BWCC luncheon, attended by the chamber's members, business owners and local government officials. Basu said forecasts of better economic times ahead, and his confidence in the ability of the region to withstand difficult economic times, brought encouragement to luncheon attendees.