Regions 1 – 3

2013 Beige Book Responses

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region-1Richard Rogers, VP – Retail Operations
Workers Credit Union ($913M, Fitchburg, MA)

The market for loans continues to be strong. In 2012, our credit union originated some $220 million in real estate loans and another $80 million in consumer loans, not including credit cards. We continue to have a mortgage pipeline of $30 million dollars per month, and in 2012 sold over $100 million to the secondary market.

We have struggled more with deposits, especially when we stopped paying up for CD’s. Over the past 4 or 5 months, we have begun to reverse this trend, and as a result our CD portfolio is again on the rise, with selected maturities being featured to complement our expected loan durations. For 2013, we are still expecting more of the same, at least for the first part of the year, as home purchases are now competing equally with mortgage refinances. Our auto business also continues to be strong, now that we have centralized the dealer business with a cohesive and motivated sales team.

Terence Field, SVP Finance
Vermont State Employees CU ($601M, Montpelier, VT)

Our local market conditions are tentatively optimistic. Vermont is a very small state and shrinking. We do not experience the economic highs and lows of other larger states. Consequently we did not experience a sharp economic decline or a sharp recovery. The housing market has remained fairly stable. We have experienced only slight depreciation in home prices. Credit quality remains strong compared to national metrics.

Deposit and membership growth have been good but not outstanding. 2013 will be another year of slow moderate economic growth in the local market. Opportunities will continue to exist to increase market share through mortgage refinancing. Deposit growth will be concentrated in core savings and checking. Re-pricing of assets will continue to pressure interest margins.

John R. Young, President/CEO
New Hampshire FCU ($238M, Concord, NH)

We are seeing the mortgage refinancing activity begin to slow from 2012 levels as interest rates stabilize at these higher current levels. Our general feeling is that most of the members that could have refinanced have and those that have not are likely to be in marginal or negative equity positions.

Generally auto loan business has slowed modestly mostly due to aggressive manufacturer rate pricing we suspect. The reports that the industry is in the area of about $15 million units sales indicated that there is a lift in demand. Deposit activity is pretty flat, as it has been for a couple years. Most members are waiting it out in low yielding accounts. If we need deposits, any type of incentive or special is quickly responded to by rate-sensitive members. Overall we are not anticipating a much improved economic environment in 2013. If mortgage interest rates ratchet up we think that will essentially end the refinancing activity we have enjoyed in 2011 and 2012. Overall members seem to be in a very cautious posture.

region-2Rich Nave, SVP Admin
Empower FCU ($1.12B, Syracuse, NY)

Local market conditions here in central New York will continue to be lackluster. We will not see significant improvements nor will we see any deterioration. This economy does not feel the extreme highs and lows as in other parts of the country. Hence, comparatively, we perform better when things are worse elsewhere and worse when things are better elsewhere. Clear as mud?

Bruce Beaudette, President/CEO
Sunmark FCU ($374M, Latham, NY)

The local market here in the Capital District area of upstate New York is reasonably strong. Unemployment is low due to GE hiring and the technical boom that is taking place with the Global Foundries chip fabrication plant which is now up and running. Sunmark had 9% loan growth in 2012 and is expecting 12% in 2013. GE has its turbine generator and alternative power plants here and its top R&D facility in the world and orders are extensive. GE is our original sponsor going back 75 years.

region-3Raymond M. Kilargis, CFO
Freedom CU ($594M, Warminster, PA)

Local market conditions are characterized as recovering but very slowly. Employment conditions have improved somewhat but not robust. Housing values have firmed and there are signs of increasing activity and there is optimism for a good year and increased lending. However, all this can change for the worse if we continue to see no leadership or compromise in Washington.

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June 5, 2014

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