Credit Union CEO Confidence Soars Behind Economy’s Lift
A number of factors have credit union CEOs feeling the most confident about the economy since 2007.
That’s according to the First Quarter 2014 Credit Union CEO Confidence Survey from Catalyst Corporate Federal Credit Union, which collected data from 207 CEOs.
“We’ve had a bevy of good economic news over the past few weeks, namely a sizeable drop in the nation’s unemployment rate, new historical highs in the stock market and stable consumer prices, including cheaper gas prices,” said Brian Turner, director and chief strategist for Catalyst Strategic Solutions, a subsidiary of Catalyst Corporate in Plano, Texas.
Using a scale ranging from negative 100 to positive 100, respondents registered their confidence levels in several areas for Catalyst’s confidence index, as well as a snapshot of present-day feelings and future expectations.
The index rose more than three points for the second consecutive quarter to 30.32 points making it the first time the gauge has topped 30 since the third quarter of 2007 when it was at 34.27.
The biggest jump came in CEO confidence regarding their members’ financial condition, at present and six months down the road, the data showed. Both numbers increased by about 5.5 points over the previous quarter.
Confidence among CEOs regarding their own institutions’ current and future financial conditions also increased, although at a slower pace, by 2.47 and .95 points, respectively, the index noted.
In addition, this survey marked the first time in three years that CEOs anticipated growth over the next six months for both loan demand and share deposits.
“Hopefully, this latest enthusiasm won’t be short-lived, and the recovery will begin to expand enough that member spending will strengthen, and credit unions will experience a more broad-based growth trend in loan demand at higher interest rates,” Turner said.
The overall economic climate in Brunswick, Ga., where the $14.3 million Georgia Coastal Federal Credit Union is based, has improved since President/CEO Laura McKinley took the helm two years ago, she said.
“Although our capital ratios are still weak, the credit union has had 17 months of profitability,” she explained. “The credit union has played a part in helping members recover from job losses and real estate challenges.”
In 2011, the community was listed by 24/7 Wall St. as one of Nine American Cities Nearly Destroyed by the Recession, but the community has rallied, people are finding jobs and bankruptcies have now stabilized, McKinley said.
Georgia Coastal received a low-income designation from the NCUA, and as a community development credit union, it is now offering business loans and a credit recovery program, according to McKinley. The cooperative is also working with the local Economic Development Authority to start a loan fund that supports small businesses, she added.
“Banks don’t want these loans, and people are looking for someone to provide service. We are growing, McKinley said.
For Catalyst’s confidence survey, the areas CEOs were asked to evaluate were:
- - Current financial condition of members
- - Current financial condition of credit union
- - Anticipated financial condition of members in six months
- - Anticipated financial condition of credit union in six months
- - Anticipated loan demand at the credit union in six months
- - Anticipated share deposit growth at the credit union in six months