The document is a letter from the President/CEO of a credit union summarizing its financial performance in 2009. Some key points: - 2009 was one of the credit union's best years financially despite economic turmoil. It saw loan and deposit growth while maintaining low loan losses. - Deposits grew 28% to over $835 million while the credit union paid above-average savings rates. Loans also increased 15% while many others tightened lending. - The credit union focuses on low operating costs and passing the savings to members in the form of higher rates and lower fees. It also continually improves its products and services like online banking. - National ratings firms gave the credit union their highest ratings, recognizing its financial

1. President’s Message
Comparative Statement
of Income (In Thousands)
Call 800-288-6423 or visit our user-friendly website at uecu.org.
$446.4
$530.9
$678.6 $220.3
$169.8
$191.7
$563.7
$679.2
$835.9
Best wishes,
President/CEO
INTEREST INCOME
Interest on Loans $ 13,258 $ 12,846
Interest on Investments 26,754 20,403
Total Interest Income 40,012 33,249
INTEREST EXPENSE
Dividends Paid 15,906 16,632
Borrowed Funds 1,648 1,102
Total Interest Expense 17,553 17,734
NET INTEREST INCOME 22,459 15,515
Provision for Loan Losses 1,145 1,052
Net Interest Income After
Provision for Loan Losses 21,314 14,463
Non-Interest Income 1,657 1,420
Operating Expenses 10,676 8,950
Non-Operating Income
(Expense), Net (2,767) (266)
Net Income Before Taxes 9,528 6,667
Federal Income Taxes (25) 18
NET INCOME AFTER TAXES $ 9,553 $ 6,649
2009 2008
ASSETS:
Loans to Members:
Secured Vehicle $ 42,421 $ 42,756
Other Personal 14,094 13,548
Real Estate Secured 146,572 120,126
Credit Card 17,165 15,269
Total Portfolio Loans 220,252 191,699
Loan Participations
Purchased - 686
Total Loans 220,252 192,385
Allowance for Losses (1,580) (1,271)
Net Loans 218,672 191,114
Investments:
Overnight Investments 17,482 7,222
U.S. Government
Agency Securities 9,239 31,736
Mortgage-Backed Securities 538,114 412,653
Mutual Funds 10,138 -
Other Investments 9,504 10,362
Total Investments 584,477 461,973
Deposit - NCUSIF 6,064 4,658
Other Assets 26,717 21,418
TOTAL ASSETS $ 835,931 $ 679,162
LIABILITIES AND EQUITY
Member Deposits:
Checking $ 12,106 $ 6,208
Money Market Savings 352,528 226,109
Share/Special Savings 209,892 215,101
Individual Retirement
Accounts 55,849 40,211
Certificates of Deposit 48,181 43,238
Total Member Deposits 678,557 530,867
Notes Payable and
Other Liabilities 39,992 50,067
Members' Equity 108,067 98,513
Unrealized Gain(Loss) on
Available-for-Sale
Securities, Net 11,743 2,469
Accumulated Other
Comprehensive Income (2,428) (2,755)
TOTAL LIABILITIES
AND EQUITY $ 835,931 $ 679,162
Comparative
Balance Sheet (In Thousands)
2009 2008
2007 2007 2007
December 31 Year Ended December 31
Dear Member-owner,
There’s no need to recount here the tumultuous economic period of
the last few years – we’ve all lived through it. Suffice it to say that
many banks, financial service firms, and government-sponsored
entities struggled to survive and in some cases failed, even with the
injection of hundreds of billions in taxpayer dollars. And where
was your Credit Union through all of this? It was right where it
should be – serving our 40,000 members, just like we did before
the storm.
While others suffered huge losses, 2009 was one of the best years
in UECU’s 75-year history. Many banks and credit unions were
forced to charge off massive amounts of bad loans. Our
charge-offs actually dropped from the prior year and were about
1/3 those of our peer credit unions and dramatically below the
experience of the banking sector.
Our members placed their faith and their money in the Credit
Union. Member deposits grew by $148 million or 28% and drove
our total assets above $835 million. We returned the favor by
paying them some of the highest savings rates in the country. At
year-end 2009, when the average savings account rate nationally
was about 0.25% APY, UECU paid its members 2.00% or eight
times as much! Through the year, federally-insured money market
account yields averaged just under 1% compared to more than 3%
at your Credit Union.
When other institutions tightened their lending standards or simply
weren’t lending, no changes were necessary at UECU. We
continued lending to our members and loans outstanding increased
by 15% during 2009. We emphasized mortgages while many
shied away from the real estate market and our total real estate
secured loans grew by 22%. So if you need a mortgage or home
equity loan, please call your Credit Union.
How do we achieve this level of success year after year? First,
UECU is a cooperative institution, owned by its members.
Because we have no stockholders, every decision is driven by our
desire to act in the best interests of the membership. Second, our
experienced team understands what’s necessary to achieve success
for the membership and the organization. In the financial
marketplace, one cannot totally avoid risk, but must proactively
assess and manage it. Knowing what not to do is just as important
as knowing what to do – a concept that has eluded many large
banks. We take your savings dollars and conscientiously lend
them to other members or effectively invest them and everyone
benefits.
One key aspect of UECU’s success is our focus on keeping
operating costs low. We’ve developed and honed a “branchless”
model that provides greater convenience than visiting a branch and
saves members considerable time and frustration. Combined with
other efficiencies, this approach allows our operating expenses to
be well below half those of similar sized credit unions. The money
we save is returned to you in the form of higher deposit rates,
lower loan rates, and fewer or lower fees.
Placing our members’ financial security first and always seeking to
exceed their expectations means that we continually pursue
improvements in UECU’s palette of financial products and
services. In recent years, this has meant expansion of our
electronic options, including our home banking platform. Previ-
ously available only through our Call Center, e-Vantages™
by Web
allows members to transfer funds via the Automated Clearinghouse
(ACH) between their UECU accounts and accounts at any other
financial institution. E-Posit Express™
lets members deposit checks
online and receive immediate access to their funds (up to pre-set
limits). With DocuSign®
, members can electronically sign loan
documents and have their loan proceeds available in minutes.
UECU’s Connections™
Checking Account is designed for members
age 15 to 25 and encourages the use of electronic services. It is an
interest-bearing account with no minimum balance requirement,
presently earning 1.75% APY. Connections™
includes free home
banking, Advantages Bill Pay™
, e-statements, an Advantages
VISA®
Check Card™
, unlimited ATM usage, and ATM surcharge
rebates. Qualified members also receive a Connections VISA
Power Card™
.
Our member rewards programs are definitely not the norm. The
VantagePoints™
Network not only rewards members for using a
UECU credit or debit card, but also provides valuable points for
maintaining deposit and credit line balances, for becoming or
referring a new member, and for using various electronic services.
VantagePoints™
can be redeemed online or by phone for gift
certificates, loan rate reductions, or everyone’s favorite, cash.
Additionally, our MyChoice™
program encourages members to use
their Credit Union for more than just savings. When a member
utilizes a service from each of four categories, he can select his own
reward annually from a broad menu of options.
Our financial strength has been recognized by national rating firms
Bauer Financial and IDC Financial Publishing, which again gave
UECU their highest ratings in 2009. In fact, UECU has now earned
Bauer’s 5-Star rating for every quarter since its inception – a period
of more than 20 years. We consistently receive a “clean”
unqualified CPA opinion on our financial statements and our state
and federal regulators rate UECU as a safe and sound institution.
On top of our financial stability, members’ accounts are insured by
the National Credit Union Share Insurance Fund to at least
$250,000 per account.
As we celebrate another highly successful year, I thank the UECU
staff for understanding superior service and assuring that our
members receive it every day. My sincere appreciation also goes
out to our committed volunteer leaders on the Board of Directors
and Committees. And if you’re a member, thank you for choosing
UECU. Your loyalty has allowed the Credit Union to prosper and
evolve into a strong, full service institution that can fulfill all your
financial needs. So, please think of your Credit Union first and tell
your co-workers and family that they too can enjoy the UECU
experience.
2008
2009
2008
2009
2008
2009
Photo from left to right: Walter A. Boquist, II, Vice President - Administration & Legal Counsel,
Patricia A. Zyma, Sr. Vice President/ Chief Financial Officer, Glen A. Yeager, President/CEO,
Kenneth C. Coutumas, Sr. Vice President/Chief Operating Officer
39063 inside.pdf 3/17/2010 10:12:44 AM