CEOs: ECONOMY IMPROVING FOR MEMBERS
updated 05/22/13 10:10 AM
Confidence Rises Significantly
According to results of Catalyst Corporate FCU's first-quarter 2013 CU CEO Confidence Survey, credit union CEOs are optimistic that better financial times are ahead for their members. However, the same survey also shows that CEOs lack confidence in their own institutions' economic well-being.

CEO confidence in their members’ current and future financial condition increased by 4.13 points and 1.17 points, respectively, from the fourth quarter of 2012. During this same period, CEO confidence in their own institution’s current financial condition decreased by 1.99 points, while confidence in their future financial condition dropped by .18 points.

Brian Turner, director and chief strategist of Catalyst Strategic Solutions, attributes the perception of an improving financial environment for members to increased employment, low interest rates, and virtually no inflation.

On the other hand, CEOs' lack of confidence in the current and future financial health of their institutions are driven by tight marginal spreads between asset yields and the cost of funds that continue to challenge net interest margins.

Only 31 percent of credit unions experienced loan growth in 2012. "That means the remaining 69 percent have elevated surplus cash and a greater reliance on investment portfolio income to replicate revenue streams—a difficult task to accomplish in this environment," Turner said. "With an outlook that reflects a continuation of the low rate environment for two to three more years, CEOs don’t see these challenges for their institutions going away anytime soon.”

Click here to view historical results of the CEO Confidence Survey or for more information.

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