What The Numbers Also Reveal

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MADISON, Wis.-As credit union economists cull through the recently released fourth quarter data, they shared the surprises, red flags and points of interest to be found in the numbers:

• The increased mortgage origination activity (up 2.69% for the year and .7% in Q4) is "a good sign" said CUNA Mutual Group's Dave Colby, but those numbers aren't reflected in the portfolio. "Sure, it was the third highest year on record for mortgage originations, but those loans aren't staying on the books, either, because they are being refi'd away by other institutions, or the credit unions are selling them off," he said. "I expect to see a decline in 2011."

• NAFCU's Tun Wai said he was glad to see credit unions are earning positive ROA, "but that gets taken away by NCUA assessments," he noted. "When doing your budget for this year, I'm see a lot of credit unions budget for a 25 BP assessment, combined. What you saw last year may be typical in terms of earnings.

• Credit unions are hiring again. "Normally, when you talk about employment these days, you are talking about unemployment, and on the bank side, you still see them shedding FTEs left and right," Wai related. "But not at credit unions. FTEs actually increased at credit unions, and although part-timers were down, that trend has slowed. This could be an early sign of things improving. We may be turning the corner as an industry."

• No matter how you slice the numbers, the fact is things are looking better, according to CUNA's Mike Schenk. "Most of the numbers look a whole heck of a lot better than they did a year ago," he commented. "It was nice to see net worth ratios grow, (5.2%) and net charge-offs decline (7.1% for the year). We're not out of the woods, yet, but things are improving."

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