April 26, 2004


  • As expected. Will ROA's really be rising on the upside of the interest rate curve this time around... I have my doubts due to longer term assets. Gerd Henjes, Countryside FCU
  • Would be interested in reviewing the average investment portfolio yield for the same group of credit unions. Our Net Interest Margin was 4.64%, yield on the investment portfolio 3.80% and ROA 1.19% for the 1st qtr. I get the feeling that a lot of credit unions have chosen to invest heavily in cheap indirect auto and mortgage loans over the past three years and have ignored excellent opportunities to secure value and increase earnings in the investment market. The amount of under-invested overnight liquidity in the industry is staggering. A well managed balance sheet should never have more than 5% of its' assets in overnight funds during a low interest rate period like we have just experienced. If you assume that when interest rates begin to rise, slowly, NIM compression will continue to increase until all these cheap loans work their way out of the balance sheet. All I really need is the investment yield number. Thanks