"Dear Board of Directors:
As we begin the New Year, federally insured credit unions appear to be turning the corner. Credit unions’ financial health continues to improve during this protracted economic recovery. Many key financial indicators are trending in the right direction.
Net income during the first nine months of 2011 exceeded net income for all of 2010. Deposits, loans, assets, and net worth all rose again during the third quarter. As a result, the aggregate net worth ratio continued to inch upward to 10.15%.
As an example!
Lending Trends
Further examination of recent lending trends reveals several areas of concern. New auto loans continued to decline, while riskier types of loans weighed more heavily on credit union books. Unsecured loans, non-federally guaranteed student loans, and first mortgages all increased for consecutive quarters.
Of particular concern: Growth in low-rate first mortgages continues to far exceed growth in overall loans. Credit unions holding high concentrations of long-term fixed-rate loans will be subject to negative margins when interest rates rise and short-term funding costs exceed income from fixed-rate mortgages.
Read the complete report analyzing these and other trends in credit unions for the first three quarters of 2011." **** Pages - Supervisory Focus for 2012:
'via Blog this'
As we begin the New Year, federally insured credit unions appear to be turning the corner. Credit unions’ financial health continues to improve during this protracted economic recovery. Many key financial indicators are trending in the right direction.
Net income during the first nine months of 2011 exceeded net income for all of 2010. Deposits, loans, assets, and net worth all rose again during the third quarter. As a result, the aggregate net worth ratio continued to inch upward to 10.15%.
As an example!
Lending Trends
Further examination of recent lending trends reveals several areas of concern. New auto loans continued to decline, while riskier types of loans weighed more heavily on credit union books. Unsecured loans, non-federally guaranteed student loans, and first mortgages all increased for consecutive quarters.
Of particular concern: Growth in low-rate first mortgages continues to far exceed growth in overall loans. Credit unions holding high concentrations of long-term fixed-rate loans will be subject to negative margins when interest rates rise and short-term funding costs exceed income from fixed-rate mortgages.
Read the complete report analyzing these and other trends in credit unions for the first three quarters of 2011." **** Pages - Supervisory Focus for 2012:
'via Blog this'
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