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Credit Union CEO Confidence Rebounds
Friday, February 27, 2015 6:25 AM

Catalyst Corporate's CEO Confidence Survey

After a small dip in the third quarter, credit union CEO optimism has recovered, according to results of Catalyst Corporate Federal Credit Union’s Fourth Quarter 2014 Credit Union CEO Confidence Survey.

The Credit Union CEO Confidence Index now stands at 32.64, up from 31.29 in the third quarter of 2014. The fourth quarter mark is close to the 2014 annual average of 31.80—the highest annual average since 2007.

"The factors that caused CEO confidence to deteriorate during that time are fairly obvious," said Steven Houle, vice president of advisory services at Catalyst Strategic Solutions. "That was the beginning of the Great Recession. All financial institutions—and most American consumers—were affected negatively.”

In fact, Catalyst Corporate's confidence index first headed south in the fourth quarter of 2007, plunging from 39.27 to 23.80. The Index did not turn the corner and rise above 30 again until the first quarter of 2014.

"Two things are notable," said Houle. "First, that it took nearly a decade for CEO confidence to recover to pre-recession levels and, second, that this recovery aligns well with the economy overall."

Like the American economy, though, CEO confidence still has room for improvement.

The survey's Present Situation Index increased from 31.57 in the third quarter to 33.54 in the final quarter of 2014, and the Expectation Index also improved, from 31.15 to 32.19. All other measures in the survey rose quarter-over-quarter as well, with the notable exception of "Credit unions' financial condition in six months," which declined by 2.34 points to 40.55.

Not every market is realizing the benefits of overall improvement to the U.S. economy. While lower gasoline prices are welcomed by most, credit unions serving the oil industry bring a different perspective.

"Our area is heavy oil and gas production. When the price is down, drilling stops," said Kay Rankin-Swan, CEO of Ward County Teachers Credit Union, a $16 million credit union in Monahans, Texas. "We do anticipate a drastic change in the economy by the end of first quarter 2015. A local housing shortage has resulted in many people living in mobile RV housing, so they will simply latch on and go home."

Catalyst Corporate's quarterly confidence survey—started a decade ago—was sent to 2,228 credit union CEOs across the nation in January 2015; 201 credit union professionals responded, for a response rate of 9 percent.

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 at www.catalystcorp.org/surveys.aspx.