As Self Reliance (NY) Federal Credit Union ends its 59^th year of continuous service to members and the community, we are pleased to report to you another successful year for your credit union in 2009.  At the outset, we gratefully acknowledge the patronage and loyalty of the Credit Union’s members which has made our Credit Union’s continued growth and prosperity possible.

2009 in Review

As 2009 began the U.S. and global economy was experiencing the largest downturn since the Great Depression.  Gross domestic product posted its biggest decline since 1982.  Unemployment reached a 26-year high as both the manufacturing and service sectors have contracted.  While economic data is showing signs of stabilization as 2009 comes to an end, most expect a slow recovery.  We are pleased to report that 2009 was a year of accomplishment and growth at the Credit Union in spite of the extremely trying economic environment.  So far, we have survived everything the economy could throw at us; and our Credit Union has thrived in this environment.

Again this year, all performance metrics exceeded our expectations as well as industry and peer-group averages.  The Credit Union ended 2009 with assets of $727.1 million, an increase of $91.3 million or 14.4% over last year.  Deposits grew to $586.4 million which is an increase of $86.3 million or 17.3%.  Excluding unrealized gains and losses, the Credit Union ended the year with equity capital of $137.2 million or 18.9% of assets.  Asset quality remains extremely good with delinquent loans as a percentage of total loans of 0.87%.  The profitability picture was also strong.  Net income for the year was $6.1 million compared with $7.1 million in 2008.  Two significant events (outside the control of the Credit Union) negatively impacted 2009 net income, an assessment from the NCUA to pay for the Corporate Credit Union Stabilization Program of $738,688 and the write-down of the Credit Union’s membership capital in Members United Corporate Federal Credit Union of $1,053,294.  Adjusting for these two transactions net income from operations was $7.9 million.  Driving profitability in 2009 were increases in loan income and lower dividend expense offset by lower investment income and higher operating expenses.  Operating expenses increased $978,798 over last year primarily in two categories: provision for loan losses ($593,459) and office operations expense ($341,113) which is primarily due to increased depreciation and maintenance expenses resulting from the purchase of the Credit Union’s new core operating system.  The net increase in all other operating expenses was essentially unchanged from last year.  The Credit Union’s return on average assets was 0.89% in 2009 or 1.15% after adjusting for the NCUA assessment and Members United write-down.

The Credit Union ended the year with 14,530 members, having welcomed 865 new members to the Credit Union.  The financial statements and the reports of the Credit and Supervisory Committees included in this report provide more details on your Credit Union’s financial performance.

Where Do We Stand

Last year we reported statistics published by the consulting firm Callahan & Associates from their annual review of the American credit union industry.  As part of the analysis, Callahan identifies “leaders” in various performance categories (usually the top 50 or top 100 performing credit unions in these performance areas).  We are proud to report that Self Reliance (NY) Federal Credit Union has again been identified as a leader in many of such performance categories.

The first three categories relate to the credit union’s lending activities.  Our average loan balance of $82,176 is ranked 13^th among American credit unions.  Member business loans of $225,874,580 make our MBL portfolio the 20^th largest among all credit unions.  Finally, our concentration of real estate loans to total loans of 98.26% ranks us first among U.S. credit unions.

Self Reliance (NY) Federal Credit Union has historically generated high average share balances per member as our member population tends to be “savers”.  At $37,410 average shares per member, we rank 11^th among credit unions where the industry average is $8,199.

The last three categories where our credit union has achieved impressive results are in operating efficiencies.  Revenue per employee is $751,264 compared to $229,397 for the industry and assets per employee are $15,793,493 compared to $3,674,685 for all credit unions as a group.  Our ranking is 20^th and 22^nd, respectively.  Finally, our dividend payout ratio (dividends as a percentage of total income) is 51.78%, a rank of 46^th in the country.

Two other areas where Self Reliance excels are in profitability and net worth.  Although we do not appear on the “leader boards” for these two categories, our results are nonetheless impressive.  It is a given that we find ourselves in a challenging operating environment.  Return on average assets for the industry has fallen to 0.56% (before NCUA assessments).  As of December, 2009 our return on average assets stands at 1.15%.  Additionally, net worth to assets for all credit unions averages 10.73% compared with our 18.9%.

Organizational Changes

After twenty seven years of service, Mr. Jaroslaw Oberszyn retired from the Board of Directors.  Most recently Mr. Oberyszyn served as Vice Chairman of the Board, also having served as Treasurer from 1992-2002.  Mr. Roman Kyzyk was elected to the Board at the annual membership meeting.  We wish Mr. Oberyszyn all the best in his retirement and Mr. Kyzyk success in his new position.

Service to the Community

The Ukrainian community in New York is vibrant, diverse and continually demonstrates its will to grow, develop and strengthen its cultural and historical ties.  Our Credit Union is proud to be an active member of the community, demonstrating this with financial support of over $1.1 million in 2009 to these community activities.

In closing, we thank our employees, the men and women who can be characterized by discipline, hard work and creativity, for their contribution to the Credit Union’s success in 2009.  We extend sincere thanks to our Board of Directors and Committees for volunteering their time and expertise in serving the Credit Union.  To our members, we simply say, thank you.  Thank you for your loyalty, your unwavering support and your confidence in your Credit Union.