CU CEO Confidence Still In Doldrums

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PLANO, Texas – Confidence among credit union CEOs remained low in the second quarter, according to Southwest Corporate FCU’s quarterly CEO Confidence Index.

The index declined to 20.73, from 20.95 in the first quarter – the lowest since confidence plunged all the way to just 7.90 for the first quarter of 2009.

“Most credit unions don’t know what to expect from the economy,” said Helen Delin, CEO at $36 million NAS JRB Credit Union in New Orleans. “This is one year we can’t predict. Low interest rates, the corporate stabilization program, and new regulations coming out all will affect overall earnings.” 

 “Credit unions were told that 2010 would be the most difficult year, so we’re just holding our breath, hoping to get through 2010 and see conditions improve,” she added.

Key indicators predicting members’ financial conditions now and in six months and credit unions’ financial conditions now and in six months remained low. CEOs continued to predict high share growth and low loan demand.

The quarterly Confidence Index measures economic expectations in six areas on a five-point scale, from negative to positive. Three of the six gauges in the most recent survey – those measuring expectations six months from now for member financial condition, credit union financial condition and loan demand – also held steady, varying less than one point from last quarter.

The largest movement was seen in CEOs’ expectations for share deposit growth, which fell more than seven points over last quarter. Two other gauges – those measuring the current financial conditions of members and credit unions – increased slightly by 1.48 points and 3.34 points, respectively.

 “The consumer continues to be wary of the weak employment climate and lost household wealth, to the point that many are deferring large ticket purchases, such as homes, cars and appliances,” said Brian Turner, director of Southwest Corporate Investment Services’ advisory service. “Unfortunately, credit unions are in the business of extending credit. So there’s little surprise that loans outstanding are down about 2 percent for the year – following a modest 1.2 percent increase in 2009.”

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