Your Credit Union Board of Directors is pleased to report that 2005 was another very successful year for AFCU. Operating costs were held to our traditionally low level. The general environment was one in which short term interest rates rose steadily during the entire year, due to the actions of the Federal Reserve Board. This motivated us to increase our dividend rate, starting in May. Due, we think, to the relationship between our dividend rate and outside interest rates, we saw our total assets decrease by $9.1 million, or 3.6%, during the year. On the other hand, we experienced an increase in loans of about $5.5 million, or nearly 20%, during the year. Our forecasts for 2006 are for a relatively stable interest rate environment, with a small decrease in Credit Union assets and continuing strong loan demand. As has been our policy for some time, we maintained a competitive dividend rate, as compared with Credit Union norms. The Credit Union Board and management have continued to evaluate new approaches to services this year, most notably some improvements to the home loan programs started last year, as well as the continuation of the AFCU Checking Account and Visa Debit Card services and further development of our Web site to make it even more user-friendly. The Checking Account program continues to be well-received by the members and, as of year-end, 966 checking accounts had been established, more than twice the number at the end of 2004. We also continued to provide the AFCU Visa credit card and ATM programs for another successful year. We continue our commitment to our members, to provide high dividends and low loan interest rates, consistent with maintaining the safety and liquidity of the Credit Union. The examination conducted by the National Credit Union Administration (NCUA) again resulted in the highest possible overall rating. This comprehensive audit examines key financial and management factors and compares the operation of AFCU with NCUA goals and with the performance of other federal Credit Unions. We appreciate the efforts of both management and staff of AFCU to improve operational efficiency and to continue to seek better ways to meet member needs for both loans and deposits. We value the advice and service provided by management and staff for our fellow volunteers on the Board, the Supervisory Committee and the Advisory Committee. Most importantly, we would like to extend our thanks to our members for viewing Aerospace Federal Credit Union as a key financial institution in their lives for both loans and deposits. Joe M. Straus |
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