• Annual Report 2007
• Chairman's Report 2007
• Treasurer's Report 2007
• Supervisory Committee's Report 2007
• President's Report 2007

Annual Report 2007

Consolidated Statements Of Operations
Years Ended December 31, 2007 and 2006

Consolidated Statements Of Financial Condition
Years Ended December 31, 2007 and 2006

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Chairman’s Report

The financial news in 2007 was largely bad for the economy with many Banking and Wall St. institutions taking huge losses on Sub-prime mortgages.  The Federal Reserve has recently stepped in to help avoid large scale failures.  In this environment Metro has done relatively well.  We did not loosen our standards or participate in the Sub-prime mortgage marketplace, so we have no exposure to the losses being suffered by the banks and brokers.   We were profitable and your deposits are safe and secure.

2007 was a re-building year for Metro, with a new CEO, new staff members, and new Home Office location.  In July we hired Peter Nalaskowski as our President/CEO and his first order of business was to get us moved to our new office space at 31-10 37th Avenue, Suite 403, in Long Island City.  Come visit our new facility when you’re in the area.

I would like to thank our Staff and Credit Union volunteers for their hard work this past year, especially during our extensive and extended CEO search.   And last year was the first in over two decades without long-time Directors Tom Amato and John Forster serving on our Board of Directors, both having “retired” after many years of dedicated service to Metro.    

Looking forward, with new Management in place and our new Office up and running we expect 2008 to be a year of growth, and investment in new and better products and services for our members.

Sincerely,

Robert G. Morrison
Chairman  

Treasurer’s Report 2007

As I sit here, half way through 2008 writing the 2007 Treasurer’s report, I recall the words of the wise philosopher Yogi Berra.  "It's deja vu all over again". For those of us who have been around the block a few times the current market and financial conditions are nothing new but can be frightening and disturbing just the same.  I am happy to report that your credit union has weathered the bumpy financial times well throughout 2007 and is well positioned going forward to expand services and returns to you, our member owners.

The financial performance for the credit union in 2007 showed a small decline in Assets, Shares and Loans. The Board and Management are committed to growing your credit union, but our first obligation to the membership is to provide safe and secure savings and loan opportunities for all our members.  Your board is committed to offer the best possible dividends on shares and fair rates on loans while minimizing those annoying fees whenever possible. We chose to forego offering exotic products or teaser rates to buy market share.

During 2007 dividends paid on member shares increased by $52,368 over the 2006 dividend while Share balances declined by $780,000. Members increased deposits in Credit Union Certificates as they redeployed their account balances from regular share and checking accounts to take advantage of the higher available rates. Members also increased usage of the Money Market accounts introduced in 2006.

Loan balances declined in 2007. Member borrowing activity slowed as economic growth declined and the financial markets tightened. Management recognized the potential stress on borrowers and increased loan loss reserves to handle possible loan defaults. In 2007, the Provision for Loan Loss was more than doubled from the previous year’s funding. The Allowance for Loan Loss is well funded and I can happily report that the credit union has limited exposure to the mortgage meltdown. Net income, while positive for 2007, declined compared to 2006 because of the increased Provision for Loan Losses.

2007 was a transition year for your credit union. The Board of Directors completed an extended search process for our new President and CEO. Peter Nalaskowski joined us in July 2007 and hit the ground running. Fortunately for us, Peter has great stamina, because we have had him running full speed the entire year.  Peter and his staff continued daily operations while preparing for and then implementing a move of the credit union to new facilities in February 2008. The sale of the headquarters location will more than double the credit union’s available reserves for expansion of services to you our members. I extend my thanks to Peter and his staff for all their efforts during 2007 and throughout 2008.

We know you our members have many choices for financial services, we appreciate you choosing to be members and we remain committed to you to keep IBM Metro if not the biggest to be the best value.  Use your credit union for all it is worth.

Report of the Supervisory Committee

The Credit Union Supervisory Committee consists of volunteer members appointed by the Board of Directors, plus a Board liaison and acts as a link between the board, management, and the membership. In 2007 the volunteers were Thomas McCarthy, Chairman, Lisa Belifiore, Steven Goldberger, Andrea Nelson, and Della Terzolo. Vincent D’Agostino was the Board liaison. In addition to providing a link to the members, the Supervisory Committee is also responsible for conducting an internal audit and to review that management is effectively carrying out the plans and policies established by the Board. The Supervisory Committee again retained the outside accounting firm of Wojeski and Company to audit the Credit Union’s practices and internal controls, and to render a decision on the financial reports that Management prepares. Management again received an unqualified opinion audit, indicating that Wojeski is comfortable with the reporting done by the Credit Union’s Management, and the financial condition of the Credit Union as of December 31, 2007.

To provide an extra level of comfort, the Committee has retained the services of Wojeski and Company, who provided us with the services normally performed by an internal audit function. Monthly, an accountant from Wojeski and Company makes an on-site visit to the Credit Union to review particular aspects of the Credit Union’s operation. A strict schedule has been prepared and approved to assure that all operations of the Credit Union are reviewed multiple times during the year.

The Supervisory Committee is established to serve all members, and to respond to any concerns or questions that may arise. The Committee may be independently contacted at:

Supervisory Committee
IBM Metro Employees Federal Credit Union
31-10 37th Avenue, Suite 403
Long Island City, New York 11101

Thomas G McCarthy
Chairman

PRESIDENT’S REPORT – 2007

Last year’s annual meeting took place on my third day as the credit union’s President. I was more than energized and optimistic about stepping in and making a difference for the future and I remain just as much if not more committed.  Although many areas would need to be addressed, there were certain major initiatives that were set before me that needed to be focused on. One was the securing of new office space and working hand in hand with this was the decommissioning and selling of our main branch and headquarters at 29-21 Queens Plaza North.  Another initiative was staffing a management team that would bring the expertise necessary to deliver better service and products to the membership.

After visiting several Manhattan locations with our realtor, I found 6,000 sq. ft of available office space several blocks away from our Long Island City branch.  Working with the prospective landlord, his architect and construction team, a bare concrete loft was built out to an efficient and cost effective new headquarters. We were able to move our operation the weekend of March 1, 2008. We closed  for business on Friday the 29th of February at 4PM at the Queens Plaza branch and were up and running the morning of Monday, March 3, servicing two members who arrived in person at 8:40AM at our new site.

The building that served as the credit union’s main branch for so many years was sold on April 2, 2008. As of this annual meeting date, just a footprint remains as the developers make room for a hotel in the soon to be revitalized Queens Plaza area. Although the building is gone, we intend to use the proceeds from the sale of it to serve the membership for years to come.

One of the most important resources the credit union has is its human resource. We are fortunate to have a dedicated and knowledgeable staff of employees and volunteers that have served the membership for many years. Recently, we’ve added to senior management and along with technological and product enhancements and the related training, the credit union will be well-positioned to meet the member needs of the future.

I am more excited today than I was a year ago regarding the prospects for our institution. Member growth is a concern for us as it is for the entire credit union industry. Our plans are to reach out to our existing membership with product offerings and by being more accessible. Greater access will be in the form of technology but whenever necessary, a person (MSR or Teller) will be available to conduct member transactions. Aside from the building sale proceeds, assets in the first half of 2008 have increased approximately 16% over those held at year-end 2007. With saving rates higher than most of our competitors we expect assets to continue to increase. Our challenge will be to deliver competitive loan products and find safe higher yielding investments to grow profitability.

Peter Nalaskowski
President & CEO

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