Nov. 19, 2012


  • At SAFE CU we have seen our income grow 300% beyond what we budgeted for 2012 due to higher income from selling mortgage loans and lower provision for loan losses. The projection for 2013 is that income will drop from the 2012 level because mortgage sales will decline and there won't be as much opportunity to reduce the provision for loan losses. There does not appear to be any way to increase the net interest margin unless rates rise and we don't see that happening in 2013. Non-interest income proably won't increase either. In fact we may see the Durbin impacts offset any increase in debit card volumes and therefore we will see lower debit interchange. Our budget for 2013 depends on taking market share from the banks in auto lending and mortgage lending. If we can do that we will have modest net income of about 48 basis points on average assets.
    Henry Wirz
  • Henry, Congratulations on the great success in 2012! With interest rates remaining low, it seems a lot of credit unions are turning to new and creative ways to boost their net income instead of relying on the traditional interest income from loans and investments. Increasing market share will definitely be a priority for many credit unions into 2013 and beyond. Good luck!
    Mark Reed