PLANO, Texas (8/21/14)--Strong financial conditions and expectations have driven credit union CEO confidence to its third quarterly increase, according to Catalyst Corporate FCU's survey.
Catalyst Corporate's Credit Union CEO Confidence Index reached its highest level in six years--32.94--in the second quarter. This follows a first-quarter number of 30.32.
The largest quarter-over-quarter increase was noted in the CEOs' expectations for their credit unions' financial condition section, which jumped to 45.64 from 39.16.
The Present Situation Index edged upward to 32.76 from 29.47, and the Expectations Index bumped up to 33.03 from 30.75 in the first quarter.
The percentage of CEOs expecting conditions to improve over the next six months increased to 45.64 from 39.16. Assessment of their institutions' current condition also rose to 37.61 from 34.78.
"I share the optimism of the survey results," said Mike Murphy, CEO, $141 million-asset Holyoke (Mass.) CU, in a statement. "Credit losses are low, and real estate values are increasing modestly. Loan demand is up, with the exception of mortgage refinance activity, and the cost of funds is stable. Improvements in employment prospects are sure to benefit my membership."
CEOs also reported a positive membership environment, giving members' current financial condition an increase of 3.8 points and 3.44 points in the expectations for future conditions category.
Loan growth expectations barely moved from the previous quarter, and share growth potential declined to 23.27 from 24.15.
Credit unions have seen much-needed growth in consumer loans, said Brian Turner, director/chief strategist, Catalyst Strategic Solutions. "Unfortunately, the industry's larger credit unions ($500 million and greater) continue to get the lion's share of that growth. Credit unions under $500 million in assets are collectively experiencing a 12% decline," he noted.
More than 200 credit union professionals responded to the July survey, which evaluates current financial condition of members; current financial condition of the credit union; anticipated financial condition of members in six months; anticipated financial condition of the credit union in six months; anticipated loan demand at the credit union in six months; and anticipated share deposit growth at the credit union in six months.