Credit Union Financial Trends for the First Half of 2006

Dear Board of Directors:

Enclosed is a report highlighting credit union financial trends for the first half of 2006. We based our analysis on data compiled from the quarterly call reports submitted by all federally insured credit unions.

The financial condition of the credit union industry remains sound. Strong loan growth indicates that you are serving your members well. If loan growth continues to exceed share growth, liquidity pressures could emerge in individual institutions. I encourage you to verify the adequacy of your credit union's liquidity management and planning processes.

Thank you for your cooperation in submitting your financial and statistical data in a timely manner.