PLANO, Texas — After trending down in the first three months of the year, confidence expressed by credit union CEOs "bounced up" in the second quarter, according to the latest CEO Confidence Survey by Catalyst Corporate Federal Credit Union.
In Q1, the survey found credit union CEOs were feeling "less certain" about their institutions' current financial condition than they have since 2008.
CatalystCorporate noted its Index has been "see-sawing up and down" during the previous four quarters. In Q2 2015, the Index registered 31.46, up from 30.22 in Q1. The Present Situation Index increased from 28.70 in Q1 to 31.08 Q2, while the Expectations Index advanced to 31.66 from 30.99 in first quarter.
Steven Houle, VP of Catalyst Strategic Solutions' Advisory Service, said 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 — including vehicle and home sales.
"U.S. auto sales were strong again in July, with an annualized sales rate of 17.46 million units," Houle said in a prepared statement. "What makes this number impressive is it came so quickly after a record month in May. 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 explained.
"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% 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."
Numbers Up Across Board
The Q2 Index found 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 in Q1 to 35.05 in Q2.
CEOs' optimism about the short-term economic outlook improved, as well, Catalyst said. 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.
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%.
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:
- Current financial condition of members
- Current financial condition of credit union
- Anticipated financial condition of members in six months
- Anticipated financial condition of credit union in six months
- Anticipated loan demand at the credit union in six months
- Anticipated share deposit growth at the credit union in six months
Additional details, including graphs with the survey's historical data, are available in the Member Feedback section, under the Communications tab at www.catalystcorp.org.