ARLINGTON, Va. - NAFCU's March Flash Report zeroed in on whatcredit union officials expect of their institution for theremainder of the year. More than half of those surveyed (54%) saidthey believed loan growth would increase for 2004 over 2003. Aquarter forecast similar loan growth, while 21% said they expectedto experience weaker loan growth in 2004. Credit unions are facingstrong competition for loans from all sides. According to NAFCU'sFlash Report, 29% said banks were their stiffest competition forloans while 28% identified auto dealers. In third place, 22% saidother credit unions provided their fiercest competition for loans.Internet lenders were cited by 9%, finance companies by 8% ofrespondents, and retailers by 3%. One percent cited all of these asbig competition. On the other side of the balance sheet, 37% ofthose surveyed said they expect lower share growth for the yearcompared to last year. A nearly equal number, 36%, anticipate lowersavings growth for 2004. A full 27% said they expected greatershare growth this year. Flash respondents said banks were theirbiggest competitors for shares, but in a close second, mutualfunds/stocks and other credit unions tied at 32% each as thelargest competitors. Twenty-nine percent of respondents indicatedthat loan growth was their principle concern heading into 2004,while 19% cited earnings. "Other," including asset quality, fraud,human resources, was noted by 17% of those surveyed. Interest raterisk was the greatest concern for 13%. Some also listed sharegrowth (10%), capital levels (8%), or bankruptcies (4%) as theirprincipal concerns for 2004. The majority of respondents said theyexpect their return on assets to be the same or better than lastyear (28% and 36%, respectively). Thirty-six percent said theyexpected a decline in ROA. Sixty-three percent expect their assetquality to remain the same for 2004 while 28% predicted it shouldimprove. Just 9% said they expect asset quality to deteriorate.Nearly all credit unions responding to NAFCU's Flash survey saidthey expected member confidence to remain the same (53%) or improve(44%) over the year. NAFCU found that 68% of credit unions saidtheir members were mainly concerned about low share rates. Theeconomy and the labor market came in at 16%, and 8% said theirmembers were most concerned about interest rate uncertainty."Credit unions seem optimistic about their near-term prospects thanthey were at this time," the Flash [email protected]