ARLINGTON, Va. - NAFCU's March Flash Report zeroed in on what credit union officials expect of their institution for the remainder of the year. More than half of those surveyed (54%) said they believed loan growth would increase for 2004 over 2003. A quarter forecast similar loan growth, while 21% said they expected to experience weaker loan growth in 2004. Credit unions are facing strong competition for loans from all sides. According to NAFCU's Flash Report, 29% said banks were their stiffest competition for loans while 28% identified auto dealers. In third place, 22% said other credit unions provided their fiercest competition for loans. Internet lenders were cited by 9%, finance companies by 8% of respondents, and retailers by 3%. One percent cited all of these as big competition. On the other side of the balance sheet, 37% of those surveyed said they expect lower share growth for the year compared to last year. A nearly equal number, 36%, anticipate lower savings growth for 2004. A full 27% said they expected greater share growth this year. Flash respondents said banks were their biggest competitors for shares, but in a close second, mutual funds/stocks and other credit unions tied at 32% each as the largest competitors. Twenty-nine percent of respondents indicated that loan growth was their principle concern heading into 2004, while 19% cited earnings. "Other," including asset quality, fraud, human resources, was noted by 17% of those surveyed. Interest rate risk was the greatest concern for 13%. Some also listed share growth (10%), capital levels (8%), or bankruptcies (4%) as their principal concerns for 2004. The majority of respondents said they expect their return on assets to be the same or better than last year (28% and 36%, respectively). Thirty-six percent said they expected a decline in ROA. Sixty-three percent expect their asset quality to remain the same for 2004 while 28% predicted it should improve. Just 9% said they expect asset quality to deteriorate. Nearly all credit unions responding to NAFCU's Flash survey said they expected member confidence to remain the same (53%) or improve (44%) over the year. NAFCU found that 68% of credit unions said their members were mainly concerned about low share rates. The economy and the labor market came in at 16%, and 8% said their members were most concerned about interest rate uncertainty. "Credit unions seem optimistic about their near-term prospects than they were at this time," the Flash concluded. [email protected]