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Spokane County Chapter “Latest Happenings in Credit Union system”

Spokane County Chapter “Latest Happenings in Credit Union system”. Linda Jekel, Director of Credit Unions March 10, 2011. Agenda. Economic Outlook Unemployment Housing Outside Events Health of WA State Chartered Credit Unions Closures Examination Issues What’s on your mind? Q&A.

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Spokane County Chapter “Latest Happenings in Credit Union system”

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  1. Spokane County Chapter“Latest Happenings in Credit Union system” Linda Jekel, Director of Credit Unions March 10, 2011

  2. Agenda • Economic Outlook • Unemployment • Housing • Outside Events • Health of WA State Chartered Credit Unions • Closures • Examination Issues • What’s on your mind? Q&A

  3. Economic Outlook • Less than vibrant recovery • Slight upturn in economy over the next 2 years • WA state similar to nation in job growth • Employment peak expected in 2nd quarter 2013 • WA state’s per-capita income surpasses the nation • Highly skilled and highly paid workers • Strong international trade Source: Office of Financial Management - December 2010

  4. Washington Unemployment December 2010 WA State 9.2% • Clark County 12.9% • Snohomish County 9.8% • Yakima Counties 10.5% • Pierce County 9.2% • King County 8.4% • Spokane County 9.1% • Whatcom County 8.1% • Thurston County 7.6% Source: Employment Security Department (Workforce Explorer) (not seasonally adjusted)

  5. Washington State Unemployment Rate

  6. Local Washington Housing Markets for 2011 City Forecast • Seattle − 6.4% • Bellingham − 6.0% • Vancouver − 5.6% • Spokane − 5.1% • Yakima − 4.7% • Tri-Cities + 3.4% Source: HousingPredictor.com

  7. Outside Events • Corporate CU System • Natural person credit union failures • Congressional Regulatory Reform

  8. Health of WA Credit Unions* • Net worth still strong at 8.9% • Delinquencies at 1.8% • Net charge-offs at 1.39% • Allowance for loan loss reserves being funded for economic factors, and FAS 114 • ROAA (excluding Corp CUs) negative for 27 CUs • Operating expenses low or being cut • Prudent risk management *Using consolidated ratios

  9. Credit Union Closures in US • As of December 2010: 18 closed credit unions with $911.5 million in total assets • As of December 2009: 15 closed credit unions with $1.3 billion in total assets Source: Bank Info Security

  10. Examination Issues • Concern for asset quality • Looking at modifications, extensions, troubled debt restructuring • Rebuilding earnings • Compliance exams? Audits? • Interest Rate Risk (IRR)

  11. What’s on your mind? Contact info: Linda Jekel Director of Credit Unions Phone: (360) 902-8778 Email: LJekel@dfi.wa.gov

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