oCredit union's current financial condition;

oMembers' financial condition six months from now;

oCredit union's financial condition six months from now;

oLoan demand at the credit union in six months; and

oShare deposit growth at the credit union in six months.

The CEOs felt encouraged about the expected loan demand at their credit union six months from now–the index rose from 22.92 in December to 31.51 in the March survey. The expected deposit growth also showed significant gain–up from 14.88 in December to 26.04 in the most recent survey.

The only category noting a drop in the survey was the measurement of credit union's current financial conditions. That measurement dropped slightly from 58.04 from last December to 57.55 in the most recent survey.

The upbeat sentiment expressed by credit union CEOs in March runs counter to a nationwide survey of consumer confidence. U.S. consumer confidence weakened in March as higher gasoline prices and recent turmoil in financial markets made Americans nervous about the future, a recent report showed, Southwest Corporate said.

The Conference Board said its consumer confidence index fell to 107.2 in March, from a downwardly revised 111.2 the prior month, with rising gasoline prices and falling stock prices contributing to the slightly more pessimistic mood, according to Southwest Corporate.

"The first quarter of each year is traditionally a period of time when loan demand takes a hiatus while share growth is stronger due to bonuses, incentives, tax refunds, etc. Therefore, CEOs always have a reason to be optimistic at that time," said Brian Turner, director of Southwest Corporate's Investment Advisory Service. "Last year proved to be a struggle for many credit unions that have seen their net margins narrow mostly from higher cost of funds. Many have an outlook that represents an expectation of lower short-term rates which would help lessen the upward pressure on their costs and hopefully help their net margins."

Turner said, "There are signs that the housing sector of the economy, while taking a pretty good whacking over the past few quarters, may be stabilizing. Personal incomes are still strong leading to optimism regarding loan quality. So going into the second quarter, optimism seems to be on the rise."

How long that optimism holds may depend on economic factors on the horizon, Turner said.

"When auto incentives become more apparent later this summer, we'll have to see how CEOs might alter their outlook," Turner said.

There were 191 responses to the survey of 605 CEOs–setting a response rate of 32% for the most recent quarter. The nearly 200 responses mark the highest number of participants in the nationwide survey since Southwest Corporate launched this "optimism barometer" in late 2003, it said. –[email protected]