Education & Events

Let It Snow

By Amanda Parsons - ALM Specialist

Last week was a relatively slow week as far as economic data releases go. Retail sales fared slightly better than expected up 0.5% last month, beating expectations of 0.3% over December. Excluding auto sales, sales were up 0.6%.

Due to recent snowstorms, part of this January gain may have already been lost this month. According to
UBS Securities research, heavy snowfalls have historically had an impact on sales. The February 12 issue
of US Economic Comment reads, “In the months of the last six heavy snow falls (Mar 1993, Jan 1996,
Feb 2003, Jan 2005, Feb 2006, and Feb 2007), retail sales fell between 0.4% and 1.4%, with the exception
of February 2007 when sales rose 0.4%m/m.”

It will be interesting to see if this trend holds up. Retail sales are an important measure of our attitudes as
consumers—if we’re not buying, we’re saving or paying down existing debt. Are you seeing more prepayments
than usual in this economic climate? If so, you may want to consider adjusting your assumptions in your ALM
model to reflect what you’re seeing versus what you used to see, or what industry standards are. If you’d like help
deciding on what prepayment assumptions suit your credit union in this climate, give us a call. You can contact
me directly at 1-800-622-7494, extension 3265, or aparsons@midatlanticcorp.org, or you may call your Corporate
Account Manager at the same number. Speaking of heavy snow, I wanted to mention that Mid-Atlantic remained
fully operational throughout blizzard conditions last week. Although there was a snow emergency in effect for all
areas surrounding the Corporate, our management team made sleeping arrangements for essential staff to make
sure we weren’t risking our lives to get here. Business hours remained 8:30 to 4:30 Eastern as usual. Many thanks to
our plowers and shovelers for allowing us to open!