GENERAL MANAGER'S Report
Oleg Lebedko

Financial Results
        Year 2008 marked significant changes in the global financial landscape. Many financial institutions that were for centuries considered leaders of the industry failed, or were forced to merge. Most credit unions have also been affected by the economic crisis, rising unemployment rates and housing market collapse. These external forces had their effect on our financial results in 2008.

      On the positive side, UFCU’s assets reached $135.7 million, member deposits increased by $7.8 million and reached $119.7 million, gross loans remained stable at $109.7 million. Total membership decreased by 90 accounts, in large due to our active effort to decrease the number of inactive accounts.  In order to keep a conservative level of loan loss allowance, we transferred close to $3 million from our current earnings into that account. This transfer had a major impact on our net income. In addition, we had to write off 51% of our deposit at National Credit Union Share Insurance Fund as a result of government actions to stabilize corporate credit unions. Corporate credit unions are organizations that serve natural-person credit unions like UFCU in areas such as investments, electronic services, cash services, etc.

      Even though these two items caused our first annual net loss, UFCU’s overall financial standing is still solid. The capital is well over 10%, which is significantly higher than required to be considered well-capitalized. In addition to strong reserves, we have built significant level of allowance to cover potential loan losses. Management and employees are working diligently to reduce loan delinquencies and charge-offs in spite of difficult economic circumstances. Our liquidity position is very strong, and we are looking forward to serve our members’ loan needs.

Membership:
        In 2008, our total membership stood at 16,615 with 6,814 members in Rochester; 5,085 in Sacramento, CA; 2,385 in Syracuse; 1,080 in our newest branch in Portland, Oregon, 667 in Albany, NY,  and 585 in Boston, Massachusetts. Our smaller branches in Portland and Albany on average are still adding the highest number of members.

Loan Activity:
        In 2008, our employees issued 1,245 loans totaling $22,962,970 detailed as follows:

139 New and Refinanced mortgages:     $13,527,964

61 Business Loans:                                   $2,219,180

272  New and Used Vehicle Loans:          $3,724,454

845 Consumer Loans and VISA:              $3,491,373

        As the lending landscape changed dramatically in 2008, we paid close attention to the quality of loans we were underwriting, as well as to the accuracy of supporting documents. We are servicing all loans we underwrite, so all our borrowers can count on quality service at their local branch.

Services:
        At the end of 2007 our credit union converted to a new core computer system that allowed better security of member information and greater flexibility in offering new services to our members.  We have implemented a secure single sign-on home-banking/electronic bill-payment system, on-line loan applications, bilingual voice-response account information system, starter checks and loan bills. We enhanced our VISA credit card program with e-statements and reward system. In a few months we will offer e-statements for all UFCU accounts, and will work on improving the phone system in all our branches while minimizing the costs.           

      Ukrainian Federal Credit Union is continually investing in our youth - in 2008 our Mitten Club for children up to 16 years of age added 44 new young members. Over $24,000 was also given out as scholarships to our student members.  Financial support was provided to several youth organizations in the areas that we serve. 

      We are thankful to all our members for the loyalty and support of our credit union. I would also like to thank UFCU employees, management team, Board and volunteers for their hard work to keep our Ukrainian Federal Credit Union successful for the benefit of many generations of our members.

Oleg Lebedko