Financial Trends in Federally Insured Credit Unions January 1 - December 31, 2003

DEAR BOARD OF DIRECTORS:

Enclosed is a report highlighting credit union financial trends for 2003. The analysis is based on data compiled from the year-end 2003 call reports submitted by all federally insured credit unions.

Along with the impressive savings and asset growth that we have seen over the past several years, the 2003 performance in lending, delinquency and overall net worth accumulation also provides a positive report.

Credit unions need to remain vigilant in monitoring the impact of changes in interest rates and make appropriate adjustments to maintain an acceptable level of risk.

Thank you for your cooperation in providing this data.