After a steep decline over the past two quarters, credit union CEOs seemed to have received a confidence boost over this past quarter by showing a 17-point jump in Southwest Corporate Federal Credit Union's CEO confidence survey.
In the first quarter of 2009, the survey reported an all-time low in CEO confidence with a 7.90 index. For this quarter, CEOs reported a 24.54 confidence index.
The survey measures the outlook credit union CEOs have in six categories: members' current financial condition, members' financial condition six months from now, credit union's current financial condition, credit union's financial condition six months from now, loan demand at the credit union in six months and share deposit growth at the credit union in six months. All six categories recorded positive gains over last quarter.
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CEOs showed the most positive slope in the confidence of members' current financial condition. That category had a 41-point increase over last quarter. Expectations for members' financial condition six months from now also showed a 19-point increase.
When it comes to CEOs confidence about their credit unions' current financial condition, they were less optimistic but still showed a 4.22 point increase over last quarter. Looking ahead to their credit unions' current financial condition six months from now, CEOs showed a 22.78 point increase over last quarter.
CEOs surveyed also exhibited a positive outlook on loan demand over the next six months. The survey showed a 12.11 point increase in CEOs' expectations for loan demand over the next six months. The outlook for share deposit growth in six month was up one point from the last quarter.
Southwest Corporate's Director of Advisory Services Brian Turner said that the sudden jump in confidence may just be a correction of the dim outlook CEOs had over the past few quarters due to rising NCUSIF premiums and special assessment charges.
"Most of the CEOs' renewed optimism comes from the hope that their institutions and the markets in general may have the worst behind them. Let's pray that it is not just post-traumatic stress syndrome," Turner said.
Turner added though that there are signs the economy is beginning to improve, or at least not continuing to decline at such a rapid rate.
"Consumers are paying off credit cards and deferring big ticket acquisitions to alleviate troublesome debt burdens. This increases their disposable income, helps to save a few dollars along the way and, in turn, helps to stabilize credit union shares."
The survey results were compiled from responses from 342 CEOs-the highest level of participation in the five years the data has been gathered. Additional details from the survey can be found at Southwest Corporate's Web site, www.swcorp.org.
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