Region 5

2013 Beige Book Responses

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region-5Paul W. Muse, President/CEO
1st Advantage CU ($562M, Yorktown, VA)

We feel optimistic about our local economic condition here in Eastern, VA. Not only are we in a state that is consistently recognized for being pro-business, our area, known as Hampton Roads, is well known for its strength in military, governmental, and private sector businesses. As for 1st Advantage, we continue to study current trends related to employment, housing, military spending, and cost of living that impact our credit union and members in various ways. We experienced strong loan growth in 2012 and think 2013 will build on that success but maintain a sense of urgency related to our day-to-day efforts. We are excited to operate in our cooperative model and continue to add value to our membership and community.

Dave Hagar, President
Baltimore County Employees CU ($324M, Towson, MD)

We’re hoping the auto loan business continues the upturn (16% increase YTD) we saw in 2012. Home values seem to have stabilized, so we’re looking for increases in home equity loans (up 13% in 2012 vs 2011). Debit and credit card sales increased 10% and 4%, respectively, in 2012. We’re looking for continued growth in these areas. On the deposit side, members continue to shift their money from certificate accounts (down 6% in 2012) to savings (up 14% in 2012) and money market accounts (up 11% in 2012). Overall, the interest rate squeeze continues and the net interest margin continues to decline as interest rate risk remains moderate.

Evan Clark, CEO
Department of Commerce FCU ($300M, Washington, DC)

Interest rate compression caused by the Fed’s purchase of mortgages and Treasuries will continue to put pressure on credit union’s bottom lines. The housing market in this area was, for the most part, insulated from much of the downturn and housing is making a solid comeback. Credit unions will need to capitalize on this strength and emphasize real estate loans into the foreseeable future. Deposit activity continues to be very strong particularly for credit unions with competitive rates on term deposits. There has also been an uptick in the amount of core deposits per member because the savings alternatives in this rate environment are all lousy. More members are starting to wonder about alternatives such as dividend paying stocks. Emphasis in this environment has to be on cost containment.

Brad Miller, SVP/CFO
Coastal FCU ($2.2B, Raleigh, NC)

The Raleigh NC market is experiencing a resurgence in auto loan demand. We believe it is due to the aging out of cars where the replacement was deferred, and it is simply not economically feasible for members to hang onto older autos. Mortgage refinancing is strong. Although home values fell in the 2006 through 2011, the decline was not significant for many homeowners and refinancing is a possibility for most. We are seeing strong demand for 15-year loans due to the comparatively low housing costs as well as to the older demographic of refinancing members. Business lending is strong in the region especially in CRE loans. They are taking advantage of the lower rate environment as bank loans come due.

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June 5, 2014

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