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CU Savings rise loans drop in October

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MADISON, Wis. (12/6/10)--Credit union loan balances fell 0.25% in the month of October--the ninth month of declines during the past 12 months--according to a Credit Union National Association (CUNA) economist’s analysis of CUNA’s monthly review of credit unions.
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“Credit union loan balances typically decline 0.5% in October due to seasonal factors,” Steve Rick, CUNA senior economist, told News Now. “So the underlying trend growth is a negative 0.2%. This translates into a negative 2.4% annual rate of decline. Over the last 12 months, loan balances are down 1.2%, the lowest growth rate in 30 years. "Credit unions continue to charge off and sell off loans, while consumers continue to pay off existing loan balances," he addded. Adjustable-rate mortgages and used-auto loans were the only loan categories reporting positive growth rates.” Credit union loans outstanding declined 0.2% during October, compared with a decrease of 0.1% during September. Adjustable-rate mortgages led loan growth, increasing 3.1%, followed by used-auto loans, which rose 0.1%. Home equity loans declined 0.1%, as did credit card loans (0.2%) and new-auto loans (0.9%).Unsecured personal loans and fixed-rate mortgages dropped 1.4% and 2.1%, respectively. Credit union leans in October totaled $580.6 billion in assets, compared with $590.2 billion in October 2009.
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Credit union savings balances increased 0.7% in October, compared with a 0.3% decrease during September 2010. Share drafts led savings growth, rising 3.1%, followed by regular shares and money market accounts, which went up 1.3% and 0.7% respectively. Individual retirement accounts and one-year certificates each decreased 0.2%. Credit union savings in October totaled $803 billion--or $36 billion more than the $767 billion saved in October 2009. Regarding asset quality, credit unions’ 60- day-plus delinquencies decreased to 1.7% during October. “Loan credit quality was essentially unchanged in October at 1.7% delinquency rate,” Rick said. “We expect the delinquency rate to rise 10 basis points over the next few months because of seasonal factors and begin to fall again by February.” The loan-to-savings ratio decreased slightly to 72% in October 2010. The liquidity ratio--the ratio of surplus funds maturing in less than one year to borrowings plus other liabilities-- increased to 19%. The movement’s overall capital-to-asset ratio remained at 10% in October. The total dollar amount of capital is $93 billion.

Addison Avenue First Tech merger approved by members

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PALO ALTO, Calif. and BEAVERTON, Ore. (12/6/10)--The Addison Avenue /First Tech merger of credit unions has received final approval to proceed from First Tech members. Addison Avenue FCU and First Tech CU will legally become First Tech FCU Jan. 1. Benson Porter, Addison Avenue’s current president/CEO will serve as president /CEO of the combined credit union. The Addison Avenue and First Tech boards unanimously agreed to the merger earlier this year. Final merger approval was subject to both regulatory and First Tech member approval. The National Credit Union Administration and Oregon both approved the merger in October. Results of the First Tech member vote were announced at a Special Membership Meeting on Dec. 2. The combined institution will operate as First Tech Federal and have assets of $4.7 billion, comprise 38 branches across eight states and Puerto Rico, have about 800 employees, and continue to serve some companies including Hewlett-Packard, Microsoft, Agilent Technologies, Intel, Cisco and Nike. Both credit unions will continue to operate under their current names until account, service and system integration is complete in June. The credit union will launch a combined website in January to introduce the new brand and keep members informed as integration activities progress. The merger of equals offers the new First Tech Federal a sustainable and robust operating model that creates the financial strength and stability needed to deliver significant long-term member value, said the credit unions. “For our members, tomorrow is today,” said Porter. “With greater resources, we can continue to invest in the technology and infrastructure our members need and want and that will make us the preferred financial institution for 21st century companies and their employees.”

TopLine FCU helps provide high school students with real world experience

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MAPLE GROVE, Minn. (12/6/10)--Through Minnesota nonprofit BestPrep and the North Hennepin Area Chamber of Commerce, employees at TopLine FCU have partnered with Park Center High School in Brooklyn Park in volunteering to help students understand the relationship between classroom learning and career skills.
Click to view larger image Students at Park Center High School in Brooklyn Park, Minn. are getting real-world mentoring via e-mail from employees of TopLine FCU.
BestPrep’s program, eMentors, joins business professionals with senior high school students to offer career-related advice and a glimpse into post-secondary and real-world experiences. TopLine FCU employees have been serving as one-on-one email mentors to Park Center’s International Baccalaureate Business Management students during the Fall 2010 semester. With the guidance of their teachers, these students have been corresponding weekly with their mentors to help them understand how to apply what they learn in the classroom to the workplace. The TopLine eMentors share their post-secondary and work-related experiences, along with career-related tips, to help students prepare for life after high school. “An email mentoring partnership between students and volunteers from almost any career field helps students understand how to connect what they learn in the classroom with what they can do for a career,” said Bob Kaitz, president/CEO of BestPrep. “This has been a rewarding experience for our employees and demonstrates their commitment to help future generations succeed,” says Harry Carter, president and CEO, TopLine FCU. “Providing a positive experience for youth to understand what they learn in the classroom and how this applies to life after post-secondary is one of many ways our employees carry on our goal of giving back to our communities.” Based in Maple Grove, Minn., Topline FCU has $275 million in assets.

CUNA to media Stubborn unemployment will hurt growth

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MADISON, Wis. (12/6/10)--A stubbornly high U.S. unemployment rate will continue to hurt economic growth heading into the new year, a Credit Union National Association (CUNA) economist told Thursday prior to the government’s Friday release of unemployment figures. Even as the economy adds more jobs in the coming months, the unemployment rate will continue to stay around 9.5% through 2011, Mike Schenk, CUNA vice president of economics and statistics, told The Street. A Labor Department report issued Friday indicated the unemployment rate rose to 9.8% in November from 9.6% the prior month. “The level of growth we are seeing at this point is barely enough to cover new entrants into the job market,” Schenk added. To significantly lower unemployment--not something he anticipates occurring in the next 12 months, Schenk estimates jobs will have to grow at a pace of 400,000 per month. Even if the economy manages to add 175,000 jobs on a continual basis, the better employment prospects will probably cause discouraged job seekers to resume their searches, which would keep the unemployment rate high, he told the publication. The economy needs to grow between 2.75% to 3% for the job market to be in better shape, Schenk explained. “2.5% growth just won’t cut it,” he added. To read the article, use the link.

New Filene report helps CUs identify innovation opportunities

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New Filene report helps CUs identify innovation opportunities MADISON, Wis. (12/6/10)--“DISCOVER: A Guide to Identifying Innovation Opportunities” is the first in a four-part Innovation series from the Filene Research Institute is intended to deliver timely, insightful information about the practice of innovation from the worlds of business and academia. The issue addresses the often-overwhelming first step in the innovation process--discovery. How does one look for innovation opportunities and where does the process begin? Filene’s collection of articles offers models that may be adopted by credit unions interested in increasing their innovation competency to the benefit of the consumers they serve. The word innovation often inspires images of charismatic, creative, maybe even eccentric, folks who come up with world-changing ideas. In truth, the practice of innovation is structured and deliberate. Organizations that learn from each other, apply tested methodologies, and connect to consumers can create new markets that can remain viable and profitable, even during challenging economic times. “DISCOVER: A Guide to Identifying Innovation Opportunities” includes case studies that illustrate how companies successfully flex their innovation muscles. From IKEA to Southwest Airlines, from Disney to McDonald’s, from Amazon to iTunes, success stories abound. The report also includes a worksheet that provides a framework for generating conversation among internal workgroups and leadership teams. For more information, use the link.

Maine hunger walk raises 30000

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BREWER, Maine (12/6/10)--The ninth annual Maine Credit Unions’ Ending Hunger Walking Tour was the largest yet, with a record-setting 72 communities visited during the month-long trek and $30,000 collected to end hunger in Maine. The campaign, which has raised and distributed more than $3.5 million since 1990, is sponsored in partnership with Cross Roads Ministries, an Old Town-Maine based hunger agency, to cover the state on foot to raise awareness about the problem of hunger in Maine (Bangor Daily News Dec. 2). During the walk, Brenda Davis, executive director of Cross Roads Ministries, traveled statewide focusing attention on the severity of hunger exists in Maine, with 13% of the state’s population identified as food insecure. Davis began her month long journey Nov. 4 in Augusta. She visited food pantries, hunger organizations and credit unions in each town she visited. At each credit union, Davis picked up a contribution from the Maine Credit Unions’ Campaign for Ending Hunger as a way to support her cause. The campaign contributed more than $7,200 to food pantries throughout Maine. All told, Davis visited 79 credit unions and picked up campaign contributions totaling nearly $30,000 When she finished at Brewer FCU in Brewer on Thursday, Jon Paradise, government and public affairs manager for the Maine Credit Union League, presented Davis with a $1,572 check from the league--1,500 for the approximate the number of miles Davis covered (by foot and car) and 72 for the number of communities she visited.