SF Fire Credit Union

Diana Dykstra, President and CEO

Welcome to the 59th Annual Meeting of the Members of SF Fire Credit Union. As always, this is an opportunity for us to review the past year and look ahead to what the future might hold.

2009 was a year that saw unprecedented challenges in the economy. Low consumer confidence, declining home values, high unemployment and increasing loan delinquencies were all factors which created harsh conditions in the financial services industry.

Although the Credit Union was profitable at an operational level (taking into account income and normal operating expenses) we did incur a loss of $6.4 million in 2009 due to circumstances related to the economy and outside of our control. Despite this, SF Fire Credit Union has weathered this turbulent economic climate well – particularly when compared to others in the financial services sector.

We did so by employing the following strategies to ensure the continued safety and soundness of your Credit Union:

Management of What Could Be Controlled

The Credit Union was successful at meeting its expected income target – and at the same time controlled costs with our normal operating expenses being less than what was budgeted.

Utilization of Capital for Events Outside of Our Control

The Credit Union used its capital for its intended purpose – unexpected expenses or losses – in 2009. Several significant events occurred that were caused by market conditions and were not a result of actions taken on the part of the Credit Union. The Federal Government’s conservatorship of Wescorp (SF Fire Credit Union’s Corporate Credit Union) resulted in a loss of approximately $3.1 million. Another expense was a deposit insurance premium assessment by American Share Insurance that was required of all insured Credit Unions. It was based on asset size, with SF Fire Credit Union’s assessment being approximately $850,000. Finally, increasing loan delinquencies associated with the economy’s high unemployment required the Credit Union to set aside approximately $7 million to cover possible future loan losses should circumstances not improve.

Now it’s time for us to look ahead with confidence to what 2010 has in store for us. Know that your Credit Union remains safe and strong with over $48 million in capital, and is well positioned to weather a stagnant or slow economic recovery. We have had the honor and privilege of serving our members since 1951, and look forward to providing exceptional service, innovative products and high value well into the future.

Diana Dykstra

President and Chief Executive Officer