2014 Economic Outlook: Region 4

2014 Beige Book Responses

2014-economic-outlook-region-4Back To Regional Map

Peter Butterfield, President/CEO
Dakota Plains Federal Credit Union ($47.6M, Lemmon, SD)

We expect market conditions to be similar to 2013 with a potential for 5-6% increase in loans outstanding.

Kent Lugrand, President/CEO
InTouch Credit Union ($810.5M, Plano, TX)

This is difficult to answer as InTouch Credit Union is a SEG-based credit union that operates in five states. We have five different local markets, but our credit union’s profitability is tied more to the financial performance of our select emloyee group than to local maket functions.

Monte Berg, Sr VP – Finance
Veridian Credit Union ($2.4B, Waterloo, IA)

Unemployment in Iowa dropped to 4.4% in November 2013, and we have stable to slightly improving economic conditions. There is some concern with the future of the agricultural sector. Overall for 2014, we are expecting no change in short-term interest rates, continued solid loan growth, and a tapering in deposit growth.

Paul Steinke, CEO
Pikes Peak CU ($74.6M, Colorado Springs, CO)

Unemployment remains historically high. Housing prices are recovering. Credit union competion in Colorado Springs, CO, is tight. Delinquencies are high. ROA is low. Growth is moderate.

Michael Daugherty, President
Community Plus Federal Credit Union ($19.2M, Rantoul, IL)

Unemployment continues to be above the national average locally. A significant portion of it appears to be structural as manufacturers report having trouble finding skilled workers, especially to maintain their increasingly automated workplace. Poverty rates are also above average.

Dennis A. Fisher, President/CEO
First Security Credit Union ($5.7M, Linclonwood, IL)

Worsening because of job pessimism, Obamacare failures, and no positive economic catalyst in sight. The trade associations continue to a poor job of educating people on the difference between a credit union and a bank. I talk to several groups a year, and one of the first questions I ask is, Does anyone know the difference between a credit union and a bank? So far no one has answered correctly; usually there are no responses, just puzzled looks. The Republicans have yet to have articulate a positive message. It cannot just be about how terrible Obamacare, the economy, and the debt crisis is. There are too many people who believe they have a right to entitlements. We have to get away from that ASAP and have leaders who stress sacrifice, individual financial Independence, and the joy/fulfillment of having others count on YOU rather than on you having to count on the government and others. The majority of Americans still hold the Jewish-Christian values this country was founded on, but a minority are drowning out this voice. They majority needs to speak out without fear. When a minority controls this country in any form, there are serious econoic consequences for the majority.

Chuck Karpf, Manager
Nebraska Rural Community FCU ($2.0M, Morrill, NE)

We are in a rural area, the panhandle of Nebraska. Agriculture was not as good as in 2012, but it was okay. We are designated a low income credit union and have a slight increase in past due loans due mostly to Christmas shopping. Earnings are almost as good as 2012 (over 1.5% on assets), but they will be lower in 2014.

Jason Peach, SVP/CFO
West Community Credit Union ($153.7M, O’Fallon, MO)

We are in the Midwest, so we did not see the extreme economic highs and lows of the past eight years as many other parts of the country. However, we are seeing a noticable improvement in our housing market and employment seems to continue to slowly improve. Some of the banks have started to lend again, and competition has continued to squeeze yields on loans into low ranges. This has been especially apparent in commercial lending and auto lending. We expect rates to remain low and loan growth to be more of a challenge than 2010-2012. We expect lower consumer loan growth levels similar to 2013. Deposit growth is also low. The trend of rapid growth reverted in 2013. In the St. Louis market, outside of national firms like Scottrade or Stifel, deposit growth was flat. We expect moderate growth rates there as long as consumer confidence continues to grow in alternative avenues to place funds, such as the stock market. Overall, we see tighter net interest margins impacting our ability to grow revenue faster than growth in our expense base. We expect slightly slower net earnings. A big risk for many of us in terms of non-interest income is the slowdown in mortgage refinance activity due to rising long term rates. We expect that to pressure our earnings too.

LeAnn Kaczynski, CFO
Smart Financial Credit Union ($561.4M, Houston, TX)

Market conditions are pretty good in Houston. The job market is healthy, which helps loan demand. We are coming off a pretty good lending year in 2013 and expect more of the same for 2014. Deposit growth has been fairly average, but we are not paying up for CD deposits either. All in all, our entire management team feels pretty good about the outlook for 2014.

Paul Brucker, President
Railway Credit Union ($84.4M, Bismarck, ND)

Overall, business continues to be brisk. All real estate values are increasing, possibly too fast. We expect the economy in our area to continue to grow and outpace most areas in the nation. Labor is tight, everyone is hiring and employment costs are increasing to remain competitive.

Randy Theilig, Senior VP
Members Choice CU ($449.8M, Houston, TX)

We expect the local economy to be somewhat strong during 2014. Consumer loan demand should match 2013 and mortgages should remain strong as long as rates stay low.

Travis Kasten, CEO
Service First FCU ($126.5M, Sioux Falls, SD)

The market continues to be strong in real estate and commercial real estate sales. Consumer loans continue to tick up month-over-month. Used car sales continue to be much stronger than new, but both are improving. The credit union is purchasing fewer investments with recent loan demand. No new FTE expected, and ObamaCare is a major concern.

Patty Gehringer, President
Casebine Community Credit Union ($31.1M, Burlington, IA)

The local job market seems to be holding its own for now. Consumer confidence remains low. Members that have good credit are more conservative. Those with not-so-good credit are still asking for loans.

Steve Kelly, President
Metrum Community Credit Union ($56.0M, Centennial, CO)

The Denver metro area has stabilized in almost all housing markets and prices have increased in the $230,000 to $325,000 range. Car volumes are strong, especially in the used car market. We expect these trends to remain the same going into 2014.

Back To Regional Map

April 14, 2014

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