Credit Union Financial Trends During 1995

DEAR BOARD OF DIRECTORS:

Enclosed is a report highlighting credit union financial trends during 1995. The analysis is based on data compiled from the yearend 1995 call reports submitted by all federally insured credit unions. We are providing this information to keep you informed of current conditions and trends in the credit union industry.

Credit unions have enjoyed another very successful year. Credit union capital is at a record level, while loan delinquency and related losses remain very low. As we review this outstanding financial performance, I feel that it is also important for each credit union to evaluate its success at serving its members' needs.

I ask each of you to evaluate your business plan and capital structure with respect to member service. Determining an appropriate level of capital is a very complex issue which must be addressed based on the unique circumstances of each individual credit union. The availability of credit union resources to meet the financial service needs of all members should be a primary consideration in the capital structure. This orientation should also be reflected within each credit union's business plan.

I urge each of you to continually strive for new and improved ways to serve your members' needs.

Keep up the good work!