Financial Trends in Federally Insured Credit Unions

DEAR BOARD OF DIRECTORS:

Enclosed is a report highlighting credit union financial trends for 2002. The analysis is based on data compiled from the year-end 2002 call reports submitted by all federally insured credit unions.

The credit union industry as a whole remains healthy. High growth in assets, shares and investments continues while loan growth remains moderate. Net income is strong primarily due to a lower cost of funds.

Thank you for your cooperation in providing this data.