CU CEO CONFIDENCE INDEX RISES
updated 08/26/15 01:56 PM
In Better Spirits Regarding Economy
Catalyst Corporate FCU's CEO Confidence Index bounced up in the second quarter, after see-sawing up and down the previous four quarters.
In the Second Quarter 2015 Credit Union Confidence Survey, the Index registered 31.46, up from 30.22 in the first quarter. The Present Situation Index increased from 28.70 last quarter to 31.08 this quarter, while the Expectations Index advanced to 31.66 from 30.99 in first quarter.
“The uptick in CEO confidence makes sense, as some strong economic numbers have been released since the first quarter that have had a positive financial impact on credit unions – namely vehicle and home sales,” said Steven Houle, vice president of Catalyst Strategic Solutions’ Advisory Service.
“U.S. auto sales were strong again in July, with an annualized sales rate of 17.46 million units. What makes this number impressive is that it came so quickly after a record month in May,” Houle said. “May’s annualized sales rate of 17.63 million units was the strongest since before the recession. More Americans are buying cars, and credit unions are the beneficiaries.
Home sales also have been strong and are adding to credit union loan growth, Houle said. “Existing home sales increased in June to a 5.49 million annualized rate, which was the strongest since February 2007. With this level of activity, 10 percent or more loan growth is not out of the question for the industry in 2015. Furthermore, if the Fed keeps a slow and steady pace with their interest rate increases, interest rates should continue to be accommodative for borrowers.”
CEOs’ assessment of members’ current financial condition increased from 25.25 in the first quarter to 27.09 in the most recent survey. Confidence in their own institutions’ current financial condition also climbed from 32.16 the first quarter to 35.05 in the second quarter survey.
CEOs’ optimism about the short-term economic outlook improved, as well. The percentage of CEOs’ expecting members’ financial condition to improve over the next six months rose from 28.79 to 29.66. Optimism about their own institutions’ financial condition in the next half of the year also jumped from 38.64 to 41.91.
Expectations regarding loan demand over the next six months increased to 32.51 after registering 31.12 last quarter. Anticipation for share deposit growth over the next six months declined to 22.55 from 25.38 in the first quarter.
“Perception often creates reality, so it is exciting to see an increased confidence level,” said Winona Nava, president and CEO of Guadalupe Credit Union in Santa Fe, New Mexico.
“On the flip side,” she said, “the ongoing political debates and campaigns may have a negative impact, since the focus in recent years has been to point out the negative, rather than paint an optimistic picture of the future. Psychologically, this may drive down consumer confidence levels leading up to next year’s presidential election.”
Guadalupe CU, a $137 million-in-assets community development financial institution, serves members of modest means. Nava said that jobs and wages in her area have not increased much, but loan demand has grown, positively impacting the credit union’s net interest margin. “And, interest rates seem likely to rise by year end, but only modestly, so that is reassuring,” she said.
Catalyst Corporate’s quarterly confidence survey – started a decade ago – was sent to 2,063 credit union CEOs across the nation in July 2015; 204 credit union professionals responded, for a response rate of 9.9 percent.
Using a scale ranging from negative (-100) to positive (+100), respondents registered their confidence levels in six key
areas to create an overall index, as well as a snapshot of present-day feelings and future expectations. The areas CEOs
were asked to evaluate are:
Additional details, including graphs with the survey’s historical data, are available at www.catalystcorp.org.
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Coffee With Regulators and MBL
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08/13/15 02:54 PM
Leasing Option Availability
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08/11/15 10:40 AM
Conference Spotlights Rates, Economy
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Talk Strategy, Marketing, Trends
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Member Lending Benefiting CUs
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07/31/15 09:44 AM
Letter From CEO Jim Nussle
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Registration Now Open
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New Fellowship Announced
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Available at iTunes and Google Play
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07/24/15 09:24 AM
Chair Debbie Matz Speaks
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