There are a number of meaningful current stats and figures thathave caught my eye. The following is my take on some of them:oCredit unions ended 2006 with ROA of .83%, not a surprise givencost of funds and the overall tight margins present. But ithighlights a trend of falling ROA, something NCUA picked up on lastyear when it said 1.0% is not a magic number for ROA. In a shortfive years, ROA has dropped from 1.06% to .83%. Fortunately, thecredit union model doesn't necessitate credit unions having to makelots of money each year, but it is still a performance gauge and itis important for credit unions to have the funds to invest in newareas. The falling ROA highlights the need for credit unions tofind more streams of non-interest income. A deeper look at ROA alsoreflects the overall trend of larger CUs outperforming theirsmaller counterparts. The ROA of CUs with between $20 to $100million in assets was .67% at year-end, compared to .88% for CUsabove $100 million. oNet worth edged up to a lofty 11.5%. Thestrong capital number highlights the safety and soundness of thesystem (Congress, risk-based capital is a no-brainer for CUs), butalso calls into question whether there are CUs carrying too muchcapital. Too much capital sounds like an oxymoron, but if a creditunion isn't putting capital to work on growth areas they are takinga different kind of risk. o$145.7 billion!!!! That's the recordnumber for bank earnings last year. It's good to be a banker thesedays, well that is if you're a big banker. The OTS, which regulatessmaller, community institutions, said its 845 thrifts saw a declinein earnings in 2006, going from $16.4 billion in 2005 to $15.9billion in 2006. Margins among banks declined from 3.52% to 3.31%,and were a mere 2.73% at thrifts. Clearly community banks arefeeling some pain, while large mega-banks rake in the profits.o77%. That's the percentage of banks from a recent Grant Thorntonsurvey that said community banks are their biggest source ofcompetition, after that is regional or mega-banks (68%), withcredit unions coming in third at 66%, a 4% drop from last year. Inaddition, only 26% of bankers were concerned about losingcommercial clients to credit unions. If community bankers, whichare led by an aggressive anti-credit union trade association in theAmerica's Community Bankers, were honest they'd come clean thatit's the big banks that are their serious threat, not creditunions. More and more it's clear that ACB is fighting NCUA onconversions so it can build its member base with converted CUs.Just look at how nicely former Community CU CEO Gary Base hasfallen into the ACB fold (picture on page 1). o$10 million. That'show much the Community Financial Services Associ-ation of America,the primary trade association for payday lenders, is spending on anational advertising campaign to try and clean up the image ofpayday lenders. I caught one of their commercials over the weekendon CNBC. I thought it was well done. Unfortunately it made paydaylenders look great, like they are really trying to help those whocan't get loans elsewhere, and helping them in a responsiblemanner. While the CFSA only has about 50% of payday lenders asmembers, the commercial helps all payday lenders. The associationsays it is spending $8 million on television ads, mostly onnational cable stations, and $2 million on regional and nationalprint ads. As I watched the well-done commercial, I couldn't helpthink how I wished credit unions could do the same thing. Creditunions could easily raise $10 million for a national cable networkad campaign. o43%. That's the percentage of respondents to a recentCredit Union Times online poll that questioned whether the IRS'focus on Unrelated Business Income Tax would cause state chartercredit unions to convert to federal charters. That's a very highpercentage, but not surprising given the IRS' recent TechnicalAdvice Memoranda that ruled some seemingly core CU products,including credit life and disability, fall under UBIT. The UBITSteering Committee, made up of CUNA, NASCUS, CUNA Mutual, NASCUSand the American Association of CU Leagues, is currently lookingfor the perfect credit union to sue the IRS. UBIT comes at a badtime. It's one more thing for the industry to worry about as itdeals with conversions and bank attacks. oSpeaking of conversions,it looks like four of them could be in play very shortly. Therecent announcement of Utah-based Beehive Credit Union's intent toconvert, combined with Think FCU in Minnesota, makes for twoon-the-record conversions. But word from the conversion consultantsis that two more CUs have informed their memberships that they areconsidering converting. Hopefully the industry won't get numb tothese announcements and start to accept a handful of conversions ayear as a new reality. --Comments? E-mail [email protected]

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