2005 Annual Report - Corporate One Federal Credit Union

Transcription

2005 Annual Report
You belong.
Membership
matters.
Library
Nearly 200 million
Americans belong
to their local library,
gaining access to
2.5 billion volumes
in print and on disc.
Source: The American
Library Association
Health Club
In 2005, 41.3 million
people in the U.S.
took part in the fitness
craze by belonging to
a gym, health club or
workout facility.
Source: International Health
and Sportsclub Association
Super Store
Retail establishments
have embraced the
membership trend
with the introduction
of frequent buyer
cards and clubs.
Source: The National
Retail Federation
Corporate
More than 90 percent
of the nation’s 9,000+
credit unions use a
corporate credit union.
Many use the services
of two or more different
corporates.
Source: Association of
Corporate Credit Unions
Corporate
One
A membership society
These days, it’s all about belonging. People join
together to form groups for a variety of reasons.
From the country club to the local pharmacy, being
a member matters. Members are rewarded for their
loyalty with benefits ranging from exclusive access to
materials to discounts on products and services. So
whether you’re a frequent flier or frequent buyer, it
pays to belong.
At Corporate One Federal Credit Union, our members
know something about the benefits of membership.
Membership in Corporate One gives credit unions
access to innovative and affordable financial solutions.
What’s more, our members get a financial partner
who shares their sense of purpose and responsibility.
Combine that with personal attention, education
and training, and access to our expert staff, and it’s
easy to see why Corporate One remains one of the
largest and most progressive corporate credit unions
in America.
Corporate One – it’s where you belong.
Where you
belong.
Table of contents
Great People and Great Products ......................... 08
DESCO FCU ......................................................... 09
Transmission Builders FCU ................................... 10
Peace of Mind ..................................................... 11
Foresight and Innovation ..................................... 12
La-Porter FCU ...................................................... 13
Bayer Employees FCU .......................................... 14
Customized, Affordable Solutions ........................ 15
A Shared Purpose ................................................ 16
Kentucky Employees CU ...................................... 17
GE Evendale Employees FCU................................ 18
A Responsible Partner .......................................... 19
From the Chairman and the President .................. 20
Board of Directors ............................................... 21
Senior Management ............................................ 22
Management’s Discussion and Analysis of
Financial Condition and Results of Operations ..... 24
Report from the Supervisory Committee .............. 32
Independent Auditors’ Report.............................. 33
Financial Statements ............................................ 34
Notes to Financial Statements .............................. 38
You Belong .......................................................... 46
08/09
Member Benefit:
Great people and great products
The credit unions that belong
to Corporate One depend on us
for critical financial products and
services. While those solutions are
important to our members’ success,
they’re only half of the story. Our
knowledgeable and accredited
people are what make Corporate
One more than just another vendor.
Credit unions count on us to help
them serve their members each
and every day. For many of our
members, we’re practically a part of
their back-office staff.
We have experienced and licensed
staff members who understand the
regulations and strategies involved
in credit union investing. Likewise,
our accredited operations staff
members have extensive experience
serving credit unions and pride
themselves on superior member
service.
While our people make it easy to do
business with us, it’s our customized,
affordable solutions that make it
hard to do business without us. As
a full-service corporate, we offer
a wide range of correspondent
and investment solutions designed
to meet the needs of all of our
members – no matter how far
reaching or specific their needs
might be. With something for
everyone, it’s easy to see why
so many credit unions belong to
Corporate One.
Correspondent Services
ACH Intercept
ACH Origination
Access Daily Deposit Service (ADDS)
Alliance One selective-surcharge ATM group
ATM/debit card programs
Automated Capture & Exchange (ACE)
Business checking
Fraud prevention tools
Securities safekeeping
Settlement services
Share draft imaging
Investment Solutions
Callable and step-up certificates
Community Investment Fund
Customized certificates
Fed Funds Plus
Fixed- and variable-rate term certificates
Liquidity options including Charlie Mac, lines of
credit, SimpliCD issuance, and security sales
Money Market Maximizer
Overnight certificates
SimpliCD
Treasury and agency securities
Lee and DESCO belong.
R. Lee Powell, CEO
DESCO Federal
Credit Union,
Portsmouth, Ohio
Assets: $181MM
Cindy and Transmission Builders belong.
Cindy Brock, CEO
Transmission Builders
Federal Credit Union,
Kokomo, Indiana
Assets: $66MM
10/11
Member Benefit:
Peace of mind
In a quickly changing world, our
members deserve a measure of
certainty when it comes to their
financial partner.
If the importance of business continuity
and disaster recovery planning wasn’t
already clear to the credit union
movement, its importance is certainly
clear after last year’s hurricane season.
In addition to our annual disaster
recovery exercises, in 2005, Corporate
One began a comprehensive business
continuity initiative to help maintain
critical business processes at acceptable
levels in the event of a minor disruption
or even a disaster.
Last year, we also built on our track
record of safety and soundness
by expanding our dedicated risk
management department. Employing
a philosophy of enterprise-wide risk
management, Corporate One is
determined to enhance its existing
controls to mitigate risk across our
entire business – people, policies,
procedures, systems and facilities.
In addition to being regulated by the
National Credit Union Administration,
Corporate One engages internal and
external auditors to ensure our safety
and soundness. Our Board’s Asset/
Liability Committee (ALCO) and our
risk management department design
and carry out controls to help mitigate
our exposure to credit, liquidity,
interest rate and operational risk.
Corporate One continued to be
profitable in 2005, with a return on
assets (ROA) of 27 basis points. Last
year, our capital reserves grew nearly
6 percent to $196 million at year’s
end, of which nearly $86 million was
held in reserves & undivided earnings
(RUDE). With earnings retention and
capital shares from new members,
our capital ratio remained well above
regulatory limits at 7 percent.
In fact, in reaffirming our P-1
commercial paper rating – its highest
possible rating – Moody’s noted
Corporate One’s “excellent liquidity,
high quality investment portfolio
and adequate profitability and riskadjusted capitalization.”
Our members belong with an
organization that will manage their
money safely and sensibly. That peace
of mind is an important benefit to
belonging with Corporate One.
12/13
Member Benefit:
Foresight and innovation
At Corporate One, we’re not just
serving our members’ immediate needs.
We’re committed to helping them be
successful today and tomorrow. That’s
why we continue to invest in innovative
correspondent services that can help
our members remain competitive now
and in the future.
Last year, in response to demand from
our members for a low-risk turnkey
solution for Check 21, we rolled out
Automated Capture & Exchange
(ACE), a back-counter branch capture
system that allows our members to
manage check deposits more easily
and efficiently by taking advantage of
Check 21 technology.
During months of talking with our
members and conducting research,
analysis and testing, we determined
that shouldering the related risks
and costs of entering into this new
era of deposit processing was the
right thing to do. As a result, we’re
offering our Partner members the
necessary hardware, software,
services, and support – valued at
more than $5,000 per branch – at
no cost. The service is also available
to Associate members for a nominal
fee. Plus, credit unions can even
“test drive” ACE for 60 days
without any monthly fees.
This leadership and emphasis on
innovation is already paying dividends
for our members. At the end of 2005,
we had installed ACE at more than
100 credit union branches and we
expect hundreds more installations
by the middle of 2006. At the end
of 2005, our members had archived
nearly 1 million items using ACE. As
we continue to sign agreements with
clearinghouses and other financial
institutions, we’re positioning our
members to realize the efficiencies
and cost savings of electronic
deposit automation.
It clearly pays to belong to
Corporate One.
Ron and La-Porter belong.
Ronald Budzinski, CEO
La-Porter Federal
Credit Union,
Michigan City, Indiana
Assets: $53MM
Bob and Bayer Employees belong.
Robert Burrow, CEO
Bayer Employees
Proctor, West Virginia
Assets: $167MM
14/15
Member Benefit:
Customized, affordable solutions
For many Americans, belonging to a
Our members also benefit from
no matter their size, to better serve
credit union means access to great
affordable correspondent solutions
their own members.
rates on loans and savings accounts,
that allow them to offer low- or no-
financial education, and a chance to
cost financial services to their own
Credit unions that belong to Corporate
control the direction of their financial
members. For example, belonging to
One also benefit from dozens of
institution. In much the same way,
Alliance One, our selective-surcharge
education and training opportunities
belonging to Corporate One gives our
ATM group, allows credit unions to
throughout the year. Events like our
members access to affordable financial
give their cardholders convenient
ATM Users Conference, Economic
solutions, education and training,
surcharge-free access to more than
Forum and Asset/Liability Management
and the chance to strengthen their
3,600 ATMs across America, for only
Conference give members the chance
relationships with their members.
$250 a year – that’s less than 7 cents
to gain insights from nationally
per ATM.
recognized industry experts. Plus, our
One way that our members see
live online webinars give busy members
tangible benefits of membership is
And for as little as $100 per month,
a chance to stay informed and remain
in the competitive investment rates
our members can offer share draft
productive without having to leave
and affordable back-office solutions
services, helping to cement their
their credit union for training.
we offer. Last year, we worked hard
relationships with their members. Plus,
to continue to pay competitive rates
our fraud prevention tools help credit
It’s solutions like these that make
on our investments in a rising rate
unions better know their members
belonging to Corporate One a good
environment with a flattened
and protect their assets. These
choice for our members.
yield curve.
solutions help each of our members,
16/17
Member Benefit:
A shared purpose
More and more credit unions are
realizing the importance of belonging
with Corporate One. In 2005, we
added 68 new members, bringing
our total membership to 788. Yet,
each one of those 788 credit unions is
unique. Whether large or small, state
or federally chartered, with one SEG
or one hundred, each member shares
a common interest in their corporate.
Together, they make us one of the
leading corporate credit unions in
the nation.
Last year, this shared sense of purpose
continued to help us attract members
nationwide. Corporate One now
has relationships with credit unions in
39 states and the District of Columbia.
New and existing members continued
to partner with us for correspondent
and investment solutions in 2005, with
our members signing more than 400
implementation agreements for new
Corporate One products and services in
their branches. This continued growth
gives us the resources to offer solutions
that are better, faster, more efficient and
more robust. Likewise, growth in capital
makes us stronger and helps protect our
members’ investments with us. When
we grow, all of our members benefit.
Even with liquidity remaining tight
and credit unions’ investable dollars
shrinking in 2005, membership in
Corporate One continued to appeal
to credit unions. Our commitment to
paying extremely competitive rates on
our investments, our focus on superior
service and a national marketing effort
helped us to grow share balances
in 2005. At the end of 2005, we
remained the sixth largest corporate
credit union in America, with more
than $3.02 billion in assets.
John and Kentucky Employees belong.
John Graham, CEO
Kentucky Employees
Credit Union,
Frankfort, Kentucky
Assets: $42MM
Pat and GE Evendale Employees belong.
Patrick Taylor, CEO
General Electric
Evendale Employees
Cincinnati, Ohio
Assets: $623MM
18/19
Member Benefit:
A responsible partner
Corporate One is proud to belong to
the credit union movement – whether
we’re helping out across the globe or
just across town.
Last year, through our continuing
partnership with the World Council
of Credit Unions and the Ohio
Credit Union League, Corporate One
signed an agreement giving WOCCU
ownership of the software system that
we developed, tested and installed
in Bolivia in 2004. The system is now
being used as a shared-branching
system by credit unions in remote
locations throughout Bolivia. Estimates
indicate that this system, created
by Corporate One at no cost to the
project, will serve approximately
500,000 people – almost 6 percent of
Bolivia’s entire population – by the end
of 2006.
Closer to home, 2005 saw the worst
hurricane season in decades. For credit
unions, these tragedies served as a
powerful reminder that we all belong
to the same movement. In response to
the devastation, our staff, management
and Board of Directors raised more
than $14,000 to donate to the National
Credit Union Foundation’s National
Disaster Relief Fund via the Ohio Credit
Union Foundation.
At the end of 2005, we had invested $7
million in the Community Investment
Fund, resulting in a contribution of
$115,000 split between the National
Credit Union Foundation and the Ohio
Credit Union Foundation. We also
supported our members in Indiana by
helping to raise $5,000 for the Indiana
Credit Union Foundation through a
members-only auction and reception.
With responsibility came recognition.
We’re proud to have been named one
of the best places to work in Central
Ohio in 2005 by Columbus Business
First. Employees at more than 100
companies gauged their workplace
in terms of people practices, work
engagement, feeling valued, manager
effectiveness and alignment with goals
– and our staff gave Corporate One
high marks. Additionally, Corporate
One was asked to participate in a
panel discussion on the future of
Check 21 on World Business Review
with General Alexander Haig and
CUES president Fred Johnson. The
segment aired on CNBC and Bravo! in
November 2005.
It’s easy to see why our members feel
like they’re part of something special.
20/21
From the Chairman
and the President
A letter to our members
There are many reasons why people
join together. Perhaps we share
common interests or goals. Maybe
we join simply to gain access to a
commodity. Sometimes, it’s as simple
as feeling a sense of belonging.
Belonging can provide all of these
things and more. Throughout
this year’s annual report, we’ve
highlighted some of the benefits of
belonging to Corporate One.
Belonging to Corporate One means
owning and supporting one of
the nation’s leading corporate
credit unions. Belonging gives our
members access to many of the
financial solutions they need to
run their credit union – including
Automated Capture & Exchange,
our revolutionary solution for
Check 21. Belonging also means
access to dozens of training and
education sessions each year that
keep our members informed. Most
importantly, belonging gives credit
unions easy ways to enhance their
relationships with their members,
whether it’s providing share draft
images online, offering access
to selective-surcharge ATMs or
protecting assets from fraud.
Belonging to Corporate One
also has an important intangible
benefit: a partnership with an
organization that shares your sense
of responsibility to your members.
Belonging to Corporate One means
being part of something special.
We’d like to thank the Board of
Directors, management team and
staff of Corporate One. As a result
of their remarkable dedication and
effort, Corporate One continues to
be a great place to belong.
Most importantly, we’d like to thank
the credit unions across America who
are members of Corporate One. As
a result of their support, Corporate
One is able to offer innovative, easyto-use financial solutions delivered by
great people.
Stephen F. Halas, Chairman
CEO, Ohio Catholic FCU
Lee C. Butke, President/CEO
Corporate One Board of Directors
Front Row (from left to right):
Stephen F. Halas,
Ohio Catholic FCU (Chairman)
Jerome R. Valco,
The Ohio Educational CU
(Vice Chairman)
Phillip R. Buell,
Superior FCU
James A. Depue,
CES CU
Gerald D. Guy,
Kemba Financial CU
(Secretary)
Janice L. Thomas,
PSE CU
Back Row (from left to right):
Charles F. Plassenthal,
Dayton Firefighters FCU
John J. Shirilla,
Best Employees FCU
(Treasurer)
Lee C. Butke,
President/CEO (left)
Stephen F. Halas, Chairman
CEO, Ohio Catholic FCU
John C. Wagner,
Emery FCU
Corporate One Senior Management
Front Row (from left to right):
Back Row (from left to right):
Not Pictured:
Tammy Cantrell,
SVP, Asset/Liability Management
Joseph Ghammashi,
VP, Risk Management
Melissa Ashley,
VP and Chief Financial Officer
Cherí Couture,
VP, Human Resources and
Administration
Lee Butke,
President/CEO
Kurt Lykins,
VP and Chief Technology Officer
Robert Coyan,
SVP, Marketing and Operations
22/23
Financial Review
24/25
Management’s Discussion and Analysis
of Financial Condition and Results of Operations
2005 In Review
The changing interest rate environment
and tight liquidity within the credit
union network continued to present
challenges in 2005. However,
Corporate One remained focused
on providing value to its members
through competitive investment rates
and innovative correspondent services.
In 2005, the value of these services
helped us to add 68 new members, with
combined assets of $25.2 billion. And
as a result of deposits from these new
members, average balances increased
slightly, despite national trends of tight
liquidity at credit unions. Accordingly,
net interest income was $12.5 million in
2005, up slightly from 2004.
In 2005, we sold securities resulting
in a net gain of $1.1 million, which
approximated gains recognized in
2004. We sold these securities to
help us manage the flow of member
deposits. Proceeds from these sales
provided needed liquidity during
periods of lower share balances or
were reinvested in securities that better
positioned our portfolios.
It is important to offer a variety of
investment products to our members
because as the interest rate environment
changes, certain products are more
attractive than others. In 2005, our
on-balance-sheet term deposits grew,
however SimpliCD sales were down
significantly relative to 2004 due to tight
liquidity and a relatively flat yield curve.
As a result, brokerage income was down
in 2005, compared to 2004, and was
the single largest factor in the decline
in net settlement income over the same
period. The success of this product in
2006 is largely dependant upon the
interest rate environment and liquidity in
the credit union network. Nonetheless,
SimpliCD continues to be a valuable
product to round out our full array of
investment offerings.
Beyond great rates, we continued to
offer our members a complete package
of correspondent solutions including
ATM/debit card programs, share draft
processing and imaging, and depository
and electronic payment services. These
services are designed to meet the
changing needs of our members and
enable them, regardless of size, to offer
a complete line of financial services to
their members. The newest addition
to these correspondent services is
Automated Capture & Exchange (ACE),
our Check 21 solution. We spent a
significant amount of time and money
in both 2004 and 2005 developing
this solution because of its benefits for
credit unions, which include reductions
in handling costs, faster clearing and
return times, reduced float, and reduced
opportunities for fraud. In late 2005,
we began offering Phase I of ACE,
which is an image archive service. This
service allows credit unions to replace
their current microfilming efforts by
electronically imaging and archiving
their deposit items. The items can
then be easily and quickly retrieved
via MemberView®. Not only is Phase I
of ACE a valuable new service for our
members, it is a critical step in preparing
for the electronic settlement of deposit
items. In the long term, our solution will
be cost-effective to both our members
and to Corporate One. While our
investment in the development of this
product contributed to an increase in
operating expenses in 2005 compared
to 2004, we believe our members are
worth the investment.
New accounting guidance related
to investments in limited liability
companies became effective in 2005,
which required us to account for
our investment in Primary Financial
Company LLC (Primary Financial) using
the equity method. Our adoption of the
equity method resulted in a cumulative
effect of change in accounting of $0.4
million. Additionally, Corporate One
will recognize its proportionate share of
Primary Financial’s income or loss
going forward.
Net income was $7.5 million for the
year ended December 31, 2005, a $1.5
million decrease from the same period
in 2004. This decrease was primarily
due to tight liquidity and a challenging
rate environment for our off-balancesheet investment products, and our
significant investment in ACE.
Capital Position
Our members and prospective members
review our capital as part of their
evaluation of our safety and soundness.
Since December 31, 2004, our total
capital, which includes reserves and
undivided earnings (RUDE), membership
capital and paid-in capital, increased
almost $11.0 million, or 6 percent. This
increase was primarily due to strong
earnings and increased membership
capital from new members. Total capital
was approximately $196.5 million as
of December 31, 2005. Because our
average asset levels have held steady,
this increase in our total capital has
resulted in an increase in our capital
ratio. As of December 31, 2005, our
regulatory capital ratio was 7 percent,
which is more than adequate based on
our operations and the risks involved
in our business and is well above the
minimum regulatory level of 5 percent.
Net Interest Income
In 2005, liquidity was tight within
Financial Review
the credit union network. According
to statistics from the Credit Union
National Association, this year ranked
one of the strongest for growth in loans
and weakest for growth in savings for
credit unions nationwide, resulting in
a reduction in total available dollars
credit unions had to invest. Yet, despite
these conditions, by continuing our
national calling strategy, we were
successful in adding 68 new members.
In fact, at the end of 2005, we had
investment relationships with 19 of the
100 largest credit unions in the nation.
Deposits from these new members
helped to increase our overall share
balances slightly when most of our peers
experienced lower share balances in
2005 compared to 2004.
Our goal is to provide credit unions
with competitive investment products
and our ability to attract deposits in
2005 is proof that we are achieving this
goal. The increase in balances in 2005
added to our net interest income in
2005—accordingly, net interest income
was $12.5 million for the year ended
December 31, 2005, compared to $12.1
million for the same period in 2004.
Our Fed Funds Plus account continues
to be popular with our members, as we
strive to pay a competitive spread to fed
funds; however, tight liquidity in 2005
resulted in an overall decrease in our
overnight shares. Yet, we continued to
experience growth in our term deposits,
as many of our members saw value in
extending out slightly on the interest rate
curve, with demand for term products
shifting to shorter-term certificates in
2005 compared to 2004.
Selected Financial Information
As of and for the year ended December 31,
(Dollar amounts are in thousands)
NET INTEREST INCOME
In addition to tight liquidity, the interest
rate environment was challenging in
2005. The Federal Reserve continued
to push short-term rates up, increasing
the fed funds target rate eight times in
2005. Additionally, global demand for
structured and corporate debt securities
of U.S. issuers resulted in spreads
tightening to historic levels on many of
the assets in which we invest. When
managing our investment portfolio, we
continually challenge ourselves to find
value in the marketplace so we can pay
competitive rates and ensure Corporate
One remains financially strong. In
2005, we continued to utilize our Part I
expanded investment authority granted
by the NCUA in 2004. Part I authority
allows us to invest in asset-backed
securities rated AA and A. Over the
last year, we increased our investment
in these types of securities resulting
2005
$
12,507
2004
$
12,106
2003
$
12,663
2002
$
11,809
2001
$
12,039
NET SETTLEMENT INCOME
7,577
8,228
10,109
8,599
8,145
NET GAIN ON SALES OF SECURITIES
1,092
1,012
675
970
6
14,079
12,343
12,565
14,965
12,278
7,097
9,003
10,882
6,413
7,912
TOTAL OPERATING EXPENSES
INCOME BEFORE OTHER ITEMS
OTHER ITEMS*
402
7,499
6,880
NET INCOME
$
Average Assets
$ 2,789,173
$ 2,705,184
$ 2,576,720
$ 2,476,925
$ 1,885,673
Total Capital
$
$
$
$
$
196,504
$
9,003
185,451
$
17,762
171,037
$
6,413
145,268
$
7,912
132,700
Return on Assets
0.27%
0.33%
0.69%
0.26%
0.42%
Regulatory Capital Ratio
7.05%
6.86%
6.64%
5.86%
7.15%
* Other items include the cumulative effect of a change in accounting in 2005 as disclosed in note 2 and the net gain on the sale of
Primary Financial in 2003.
Financial Review
in increased interest income with
minimal additional credit risk. This, in
turn, helped us to provide members
with great rates. We also rotated our
investments out of sectors where the
spreads had tightened and invested
in sectors where the spreads were
wider. Additionally, we saw increased
value in the products offered by U.S.
Central, particularly in structured
callable term offerings. As a result of
this repositioning of our portfolios,
we were able to continue to pay great
rates. However, because of pressures on
the spreads we earn, our net interest
margin decreased slightly in 2005
compared to 2004.
Table One:
Corporate One also has a branch of
CU Investment Solutions, Inc. (ISI),
a National Association of Securities
Dealers (NASD) registered broker/
dealer, housed within our office.
Through ISI, our members have
access to the inventories of multiple
broker/dealers’ institutional trading
desks and receive very competitive
pricing on the securities they buy and
sell. Since SimpliCD and securities
are both off-balance-sheet products,
they contribute to fee income instead
of net interest income. However,
2005
Components of Net Interest Income
Average
Balance
Interest-earning assets:
Time deposits
Asset-backed securities
Mortgage-related securities
Other investments (primarily U.S. Central)
Loans to members
can also issue certificates of deposit
through Primary Financial, providing
them with a source of liquidity.
In addition to offering competitive
investment products, we further
differentiate ourselves by assigning
our member credit unions to a specific
Corporate One investment representative.
Our investment representatives are
licensed and able to understand the
investment needs of our members. We
also arm our investment representatives
with a variety of products. In addition to
our on-balance-sheet products, Corporate
One is a co-broker of Primary Financial,
enabling us to offer SimpliCD. SimpliCD
allows credit unions to easily invest
substantial funds in federally insured
certificates of deposit. SimpliCD searches
for the best rates and offers single
transaction settlement. Credit unions
$
15,436
547,918
491,091
1,658,603
43,037
Interest or
Dividends
$
2004
Average
Rate
459
19,156
18,298
52,237
1,667
2.97%
3.50%
3.73%
3.15%
3.87%
Average
Balance
$
Interest or
Dividends
Average
Rate
36,382 $
631,321
485,585
1,483,433
21,692
881
10,934
10,990
32,066
485
2.42%
1.73%
2.26%
2.16%
2.24%
Total interest-earning assets
2,756,085
91,817
3.33%
2,658,413
55,356
2.08%
Interest- and dividendbearing liabilities and members’
share accounts:
Overnight shares
Term shares
Membership capital shares
Other borrowings
1,090,730
1,141,418
83,172
334,997
31,523
34,545
2,235
11,006
2.89%
3.03%
2.69%
3.29%
1,259,365
967,723
76,677
258,811
15,127
23,660
651
3,812
1.20%
2.44%
0.85%
1.47%
Total interest- and dividendbearing liabilities and members’
share accounts
$ 2,650,317
79,309
2.99%
$ 2,562,576
43,250
1.69%
NET INTEREST INCOME
NET INTEREST MARGIN
$ 12,508
$
0.45%
12,106
0.46%
26/27
it is important to mention them in
the context of net interest income
because these are valuable investment
alternatives for credit unions and
more examples of the investment
solutions and value we provide to
our members.
multiplied by prior year’s rate), interest
and dividend rates (changes in rates
multiplied by the prior year’s volume)
and the combined impact of dollar
volume and interest and dividend
rates (changes in volume multiplied by
changes in rate).
Table One provides more information
on the composition of interestearning assets, interest- and dividendbearing liabilities and members’ share
accounts and their weighted average
rates. The resulting net interest
margin of Corporate One for 2005
and 2004 is presented for comparison
purposes. Table Two provides a rate
and volume analysis, which further
illustrates changes between 2005
and 2004 in the components of
net interest income attributable to
dollar volume (changes in volume
Settlement Fees
In addition to providing a wide range
of competitive investment products to
meet our members’ needs, Corporate
One also provides a complete line
of correspondent services. Net
settlement income generated from
our fee-based services was $7.6
million for the year ended December
31, 2005. This represents an 8 percent
decrease from 2004, which is mostly
due to a decrease in fee income from
brokerage services.
Table Two:
Volume and Rate Variance Analysis
Interest-earning assets:
Time deposits
Asset-backed securities
Mortgage-related securities
Other investments (primarily U.S. Central)
Loans to members
Usage of our Access Daily Deposit
Services (ADDS) and ACH services
by new members, as well as
increased usage among existing
members, resulted in an increase in
net settlement income from these
products. Because ADDS users were
the first members to benefit from
our Check 21 solution and because
they will continue to be the first to
benefit as we roll out Phase II of
ACE, we saw a significant increase in
members joining our ADDS program
in 2005 and late 2004. In the future,
we expect that revenue from ADDS
will decrease and be replaced by
revenue from ACE, and net revenue
from ACH will continue to increase
as more consumers use electronic
payment methods.
2005 versus 2004
Volume
$
Total interest-earning assets
(507)
(1,443)
124
3,784
478
Rate
$
200
11,174
7,138
14,686
354
Volume and Rate
$
(115)
(1,509)
46
1,701
350
Total
$
(422)
8,222
7,308
20,171
1,182
2,436
33,552
473
36,461
Interest- and dividend-bearing
liabilities and members’ share accounts:
Overnight shares
Term shares
Membership capital shares
Other borrowings
(2,024)
4,238
55
1,120
21,283
5,710
1,411
4,710
(2,863)
937
118
1,364
16,396
10,885
1,584
7,194
Total interest- and dividend-bearing
liabilities and members’ share accounts
3,389
33,114
(444)
36,059
INCREASE (DECREASE) IN NET INTEREST INCOME
$
(953)
$
438
$
917
$
402
28/29
In late 2005, we began rolling out ACE.
As of the end of 2005, we had installed
ACE at more than 100 credit union
branches. We are offering incentives
to our members to allow them to try
the product without fees for a period
of time. The timing of the roll out and
the incentive pricing resulted in minimal
revenue from this product in 2005, but
we expect revenue from ACE to increase
in the future.
Corporate One partners with First Data to
offer the STAR network to our members.
Transaction volume in our ATM programs
continues to grow, as debit card usage
continues to increase. This increase in
volume has also resulted in an increase in
ATM net settlement income.
Although we saw increases in revenue
from ADDS, ACH, ATM and ACE, it was
not enough to offset the decrease in
net settlement income from brokerage
services and share drafts. Tighter liquidity
at our member credit unions and an
interest rate environment less favorable
to SimpliCD certificate sales were
the primary reasons for the decrease
in income from brokerage services.
Additionally, reductions in consumer
usage of share drafts contributed to the
decrease in income from share drafts.
This trend is expected to continue as
more consumers shift to electronic
payment methods. Table Three
summarizes net settlement income for
2005 and 2004.
Operating Expenses
Total operating expenses were $14.1
million in 2005, an increase of $1.7
million relative to 2004. Our investment
in the development of ACE contributed
to this increase. In developing ACE, we
are focused on the long-term benefits
for our members. The efficiencies and
savings our members enjoy as a result of
ACE will never be reflected in Corporate
One’s earnings. However, as a memberowned organization, we understand
that creating innovative and valuable
products for our members is our job.
In 2005, we incurred consulting and
other technology-related expenses
in developing this solution, resulting
in increased office operations and
occupancy expenses in 2005 compared
to 2004. ACE will remain a high priority
in 2006 and we will likely continue to
see higher operating expenses related
to it. Ultimately, we believe that our
solution will not only benefit our
members, but will be cost-effective for
Corporate One as well.
Corporate One is committed to
managing the risks associated with
our business activities and has had a
formal risk management department
for many years. Additionally, in 2005,
we embarked on an initiative to deploy
enterprise risk management throughout
our entire organization. Enterprise
risk management is critical not only to
managing our risks, but to maximizing
the value of Corporate One for our
members. Accordingly, in 2005, we
added personnel and resources to our
risk management department. This
contributed to the increase in salaries
and benefits and office operations and
occupancy expense in 2005 compared
to 2004.
Liquidity Risk Management
Liquidity was very tight throughout
the credit union network in 2005. One
of the benefits of membership with
Corporate One is that members may
access liquidity from us when they
need it, and do so at a very reasonable
rate. In 2005, we saw credit unions
take advantage of this benefit, with
average loans to members increasing
98 percent over 2004. Throughout this
period of tightened liquidity, we were
able to fulfill every member’s request for
funds, whether through a withdrawal of
their deposits with us or by borrowing
against their Corporate One advised line
of credit.
Because liquidity needs can change
rapidly, we have to be prepared at
all times for members’ demand for
the shares they hold with us and for
loans. We constantly monitor our
members’ liquidity needs and evaluate
Table Three: Net Settlement Income
ATM
2005
2004
Percentage
Change
$ 3,247
$ 3,136
3.5%
Brokerage
1,579
2,305
-31.5%
Share Drafts
1,466
1,696
-13.6%
Settlement
537
543
-1.1%
ACH
541
465
16.3%
ADDS
197
83
137.3%
$ 8,228
-7.9%
ACE
TOTAL NET SETTLEMENT INCOME
10
$ 7,577
Financial Review
the adequacy of our liquidity sources.
To meet day-to-day member liquidity
requirements, we keep a portion of
our assets very liquid. In addition, we
buy securities with readily determined
market values that can be sold or
borrowed against to generate liquidity.
In fact, throughout 2005 and 2004, we
sold securities to fund our members’
requests for deposits and to reposition
our portfolios, proving that the securities
we buy do have a ready market. We also
match our members’ term certificates
against assets with similar cash flows
and maturities. What that means is
when a term certificate matures, there
is also an asset maturing at about the
same time, producing the necessary
liquidity to meet our members’ needs.
We are able to do this because members
have historically held term certificates to
maturity, and term certificates are not
as prone to sudden liquidity demands as
our overnight balances.
In 2005, we continued to maintain a
variety of liquidity sources. We keep
a $750 million advised line of credit
with U.S. Central, as well as committed
lines of credit with three financial
institutions outside of the credit union
network totaling $135 million. We also
continue to maintain fed funds lines
with various financial institutions. Fed
funds lines do not require collateral for
overnight borrowings and therefore
give us increased flexibility should we
need liquidity to meet member needs.
We have the ability to issue commercial
paper in the national capital markets
up to $175 million. We maintain the
highest possible ratings from Moody’s
and Standard and Poor’s, a P-1 and
A-1+ rating, respectively, enabling us
to access this market in the most costefficient manner. As a member of the
Federal Home Loan Bank of Cincinnati,
we also have access to its many
credit facilities. However, liquidity
does not come without costs. As a
member-owned organization, we
are focused on reducing those costs.
We strive to keep ourselves fully
invested to earn the best possible
return for our members, while
ensuring we can meet our members’
liquidity needs. We also have
diversified our sources of liquidity so
we can take advantage of the most
competitive rates in the market.
Market/Interest Rate Risk
Management
When members deposit funds
with us, we can choose to invest
those funds in a variety of securities
that closely match the duration
and repricing characteristics of
the underlying deposit, resulting
in minimal mismatch. For our
overnight liabilities that reprice daily,
we generally invest such deposits
in investments that reprice every
month or sooner. We generally
match fixed-rate liabilities that
mature in excess of one month
with fixed-rate securities that have
the same or approximately the same
maturity. As a result of the way we
manage our balance sheet, when
interest rates move, the value of our
floating-rate assets and liabilities does
not fluctuate significantly. Movements
in interest rates do affect our fixedrate securities; however, there also is a
corresponding change in the value of
the deposit liabilities matched against
those fixed-rate securities.
Our primary method of measuring
interest-rate risk is a Net Economic
Value (NEV) calculation. NEV is defined
as the fair value of assets less the
fair value of liabilities and members’
accounts. The purpose of the NEV test
is to determine whether Corporate
One has sufficient capital to absorb
potential changes to the market value
of our assets and liabilities given
sudden changes in interest rates.
As expected, given our strategy for
managing our balance sheet, our
stress tests indicate little overall NEV
volatility should interest rates move up
or down. Figure One illustrates how
closely matched our balance sheet is
as a result of our strategy. This graph
Figure One: Repricing Sensitivity - December 31, 2005
(Dollar amounts are in millions)
ASSETS
$2,000
LIABILITIES
$1,500
$1,000
$500
0-30
days
31-90
days
91-180
days
181-365
days
1-3
years
3+
years
Financial Review
also illustrates that the majority of
our assets and liabilities have effective
durations (or the period of time until
the instrument reprices) of less than 30
days. This relatively short-term duration
also helps reduce our interest rate risk.
NEV scenarios are performed monthly,
testing for a sudden and sustained
increase or decrease in interest rates
of 100, 200 and 300 basis points.
A summary of Corporate One’s NEV
calculation as of December 31, 2005
and 2004 is shown in Table Four. At
December 31, 2005 and throughout
2005, we maintained well below the
28 percent change-from-base limit
imposed by our Board and the NCUA
to maintain our Part I expanded
authority. Also, our NEV ratio at
December 31, 2005 and throughout
2005 in all scenarios was considerably
greater than the minimum regulatory
ratio of 2 percent. These results are
expected, given our strategy for
minimizing interest rate risk.
To assess the effectiveness of
our interest-rate-risk monitoring
procedures, we engage an
independent asset/liability
management consultant to analyze
our interest rate risk on a quarterly
Table Four: Net Economic
Value Calculation
basis and report the results of its
independent analysis directly to our
Asset/Liability Committee (ALCO) and
Board of Directors.
Credit Risk Management
Protecting our members’ investments is
our number one objective. Therefore,
when we add assets to our balance
sheet we take credit risk management
very seriously. We have been granted
Part I expanded investment authority
from the NCUA and this authority
allows Corporate One to manage its
balance sheet more effectively and
take on certain additional credit risk.
We believe that the nominal amount
of additional credit risk is worth the
value we are finding in securities rated
AA and A. Our ability to invest in
securities with slightly more credit risk
and greater returns helps us continue
to provide great rates to our members.
However, even with the expanded
investment authority, we maintain
a low credit risk profile because of
the strategies we have in place to
minimize this risk. These strategies
include having policies and procedures
in place to ensure that our portfolio is
properly diversified and collateralized.
Net
Economic
Value
NEV
Ratio
Actual
Dollar
Change
from Base
Actual
Percentage
Change
from Base
As of December 31, 2005
300 b.p. rise in rates
Base scenario
300 b.p. decline in rates
$174,567
$195,883
$213,508
5.85%
6.57%
7.16%
-$21,316
-10.88%
$17,625
9.00%
As of December 31, 2004
300 b.p. rise in rates
Base scenario
200 b.p. decline in rates
$171,480
$187,491
$191,263
6.06%
6.63%
6.76%
-$16,011
-8.54%
$3,772
2.01%
These exposure guidelines are
established by our risk management
department, independent of the
investing function within Corporate
One and affirmed by our ALCO.
These policies and procedures require
high quality, investment-grade ratings
for all investments we purchase.
We perform an individual analysis
of our investments both before
and after we purchase them. The
analysis is not only performed by the
investment department, but also by
our risk management department.
The analysis includes an evaluation
of the strength and integrity of the
parties, and we invest only with
the most creditworthy obligors.
Risk management also monitors
the performance of the underlying
collateral in each of these investments
for as long as we own the security.
Additionally, we primarily invest in
securities with credit enhancements
such as excess spread, subordination,
or financial guarantees by a third
party guarantor, which reduce the
likelihood that Corporate One will
incur credit losses.
Based on the dollars invested, more
than 40 percent of our investments
are asset-backed securities. The
collateral backing the majority of
these are either auto loans, credit
card receivables, student loans,
mortgages or home equity loans.
Our analysis of asset- or mortgagebacked securities also includes an
assessment of the creditworthiness of
the collateral backing these securities.
However, because this collateral is
consumer debt, factors such as a
weakened economy can affect the
loss experience of the collateral.
Should actual loss experience of the
collateral exceed expectations,
30/31
(see Figure Two). The level of credit risk
we take is low, as indicated by the lack
of credit losses we have experienced.
the credit quality of such securities
may deteriorate.
We use this same methodology when
we lend money. We evaluate the credit
applicant’s ability to repay loans from
us by analyzing their financial strength.
Also during the review, we consider the
quality and liquidity of the collateral
that the applicant pledges to Corporate
One to secure borrowings. As a result
of our strategy for minimizing credit
risk, we have a well-diversified balance
sheet. All of our investments are issued
by agencies of the U.S. government or
have some of the highest credit ratings
that Moody’s and Standard and Poor’s
assigns; or are issued by U.S. Central,
a AAA-rated financial institution, or
other regulated depository institutions
Operational Risk Management
Corporate One provides a variety of
products and services to our members
and is reliant on the ability of our
employees and systems to process
a large number of transactions.
Accordingly, Corporate One is
exposed to a variety of operational
risks including errors and omissions,
business interruptions, improper
procedures, and vendors that do not
perform in accordance with outsourcing
arrangements. These risks are less direct
than credit and interest rate risk, but
managing them is critical, particularly
in a rapidly changing environment with
Figure Two: Portfolio Diversification
(Based on dollars invested at December 31, 2005)
By Investment Type
U.S. Central
By Credit Rating
U.S. Central
50.14%
Asset-Backed Floating 25.68%
50.14%
AAA Rated
24.63%
Mortgage-Related
11.07%
Agency
14.16%
Asset-Backed Fixed
5.54%
Other
Other
4.48%
AA Rated
3.61%
Agency
3.09%
A Rated
2.98%
4.48%
increasing transaction volumes. In the
event of a breakdown or improper
operation of systems or improper
procedures, we could suffer financial
loss and other damage, including harm
to our reputation.
To mitigate and control operational
risk, Corporate One has comprehensive
policies and procedures designed to
provide a sound and well-controlled
operational environment. All vendor
relationships are reviewed on an
annual basis and a financial analysis
of our major business partners is
completed. Corporate One also
engages an independent accounting
firm to perform periodic internal
audit procedures on the internal
controls of Corporate One. This firm
reports monthly on such procedures
to Corporate One’s Supervisory
Committee and Board of Directors.
Additionally, business continuity plans
exist and are tested for critical systems,
and redundancies are built into the
systems as deemed appropriate.
Financial Review
Supervisory Committee
Report from the Supervisory Committee
From left to right:
Michael P. Cooper,
AurGroup Financial CU
James A. Depue,
CES CU (Board Liaison)
Sonja J. Hann,
Midwest Community FCU (Chairman)
Not pictured:
Edward J. Enyedy,
School Employees Lorain County CU
Corporate One’s 2005 financial
statements, prepared by
management, were audited in
accordance with auditing standards
generally accepted in the United States
of America by KPMG LLP, Independent
Certified Public Accountants. KPMG
LLP’s report on Corporate One’s
financial statements is included within
this annual report.
In addition to the annual audit, Condit
and Associates, Independent Certified
Public Accountants, performs periodic
internal audit procedures on the
financial statements and internal
controls of Corporate One, and
reports monthly on such procedures
to Corporate One’s Supervisory
Committee and Board of Directors.
Based on the annual audit and
internal audit procedures, the
Supervisory Committee is confident
that Corporate One is subjected
to a thorough and professional
examination process.
32/33
Independent Auditors’ Report
The Board of Directors
Corporate One Federal Credit Union
We have audited the accompanying
balance sheets of Corporate One
Federal Credit Union (Corporate
One), as of December 31, 2005 and
2004, and the related statements of
income, changes in members’ equity,
and cash flows for the years then
ended. These financial statements are
the responsibility of Corporate One’s
management. Our responsibility is to
express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance
with auditing standards generally
accepted in the United States of
America. Those standards require that
we plan and perform the audit to obtain
reasonable assurance about whether the
financial statements are free of material
misstatement. An audit includes
consideration of internal control
over financial reporting as a basis for
designing audit procedures that are
appropriate in the circumstances, but
not for the purpose of expressing
an opinion on the effectiveness of
Corporate One’s internal control over
financial reporting. Accordingly, we
express no such opinion. An audit also
includes examining, on a test basis,
evidence supporting the amounts and
disclosures in the financial statements,
assessing the accounting principles
used and significant estimates made by
management, as well as evaluating the
overall financial statement presentation.
We believe that our audits provide a
reasonable basis for our opinion.
Corporate One has reported share
accounts as equity in the balance
sheets and statements of changes in
members’ equity that, in our opinion,
should be reported as liabilities in order
to conform with accounting principles
generally accepted in the United States
of America. If these share accounts
were properly reported, liabilities would
increase and members’ equity would
decrease by $2,534,993,350 and
$2,508,358,948 as of December 31,
2005 and 2004, respectively.
In our opinion, except for the effects
on the balance sheets and statements
of changes in members’ equity of
reporting share accounts as members’
equity, as discussed in the preceding
paragraph, the financial statements
referred to above present fairly, in all
material respects, the financial position
of Corporate One as of December 31,
2005 and 2004, and the results of
their operations and their cash flows
for the years then ended, in conformity
with accounting principles generally
accepted in the United States
of America.
Columbus, Ohio
March 13, 2006
34/35
Balance Sheets
December 31,
2005
Assets
Cash and cash equivalents
Investments in financial institutions
Securities available for sale, at fair value
Loans to members
Deferred deposits
Other assets
TOTAL ASSETS
Liabilities and members’ equity
Liabilities:
Commercial paper and other borrowings
Dividends and interest payable
Accounts payable and other liabilities
$
90,303,958
1,462,161,597
1,260,723,253
61,703,313
122,033,886
23,748,401
$
$
3,020,674,408
$ 2,856,720,575
$
363,500,000
9,062,692
2,887,816
TOTAL LIABILITIES
Members’ equity:
Share accounts
Paid-in capital
Reserves and undivided earnings
Accumulated other comprehensive loss
TOTAL MEMBERS’ EQUITY
TOTAL LIABILITIES AND MEMBERS’ EQUITY
See accompanying notes to financial statements.
2004
$
$
109,996,541
1,254,451,277
1,332,764,591
28,098,309
110,765,673
20,644,184
233,460,000
6,639,884
3,301,590
375,450,508
243,401,474
2,534,993,350
25,681,996
85,800,284
(1,251,730)
2,508,358,948
25,681,996
79,376,015
(97,858)
2,645,223,900
2,613,319,101
3,020,674,408
$ 2,856,720,575
Financial Review
Statements of Income
Year ended December 31,
2005
2004
Interest income:
Investments and securities
Loans to members
$ 90,149,925
1,667,092
$ 54,871,237
484,629
TOTAL INTEREST INCOME
91,817,017
55,355,866
Dividend and interest expense:
Share accounts
Other borrowings
Commercial paper
68,303,833
9,514,661
1,490,864
39,438,053
3,190,121
621,414
TOTAL DIVIDEND AND INTEREST EXPENSE
79,309,358
43,249,588
NET INTEREST INCOME
12,507,659
12,106,278
17,093,299
9,516,518
18,061,991
9,834,339
NET SETTLEMENT INCOME
7,576,781
8,227,652
NET GAIN ON SALES OF SECURITIES
1,091,914
1,012,114
7,717,833
5,111,327
1,249,511
6,899,855
4,415,973
1,026,869
14,078,671
12,342,697
7,097,683
9,003,347
Settlement income:
Settlement fees
Settlement expense
Operating expenses:
Salaries and employee benefits
Office operations and occupancy expense
Other operating expenses
TOTAL OPERATING EXPENSES
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
Cumulative effect of change in accounting
NET INCOME
401,712
$ 7,499,395
$ 9,003,347
Financial
FinancialReview
Review
Statements of Changes in Members’ Equity
BALANCE AT JANUARY 1, 2004
Share
Accounts
Paid-In
Capital
Reserves and
Undivided
Earnings
$ 2,172,785,714
$ 25,681,996
$ 70,974,790
Comprehensive income:
Net income
Other comprehensive income unrealized loss on securities
available for sale, net of
realized gains
Accumulated Other
Comprehensive
Income (Loss)
$ 2,862,633
9,003,347
(2,960,491)
335,573,234
335,573,234
(602,122)
2,508,358,948
25,681,996
Comprehensive income:
Net income
Other comprehensive income unrealized loss on securities
available for sale, net of
realized gains
79,376,015
(602,122)
(97,858)
7,499,395
(1,153,872)
(1,153,872)
6,345,523
26,634,402
26,634,402
DIVIDENDS ON PAID-IN CAPITAL
BALANCE AT DECEMBER 31, 2005
2,613,319,101
7,499,395
COMPREHENSIVE INCOME
NET CHANGE IN SHARE ACCOUNTS
(2,960,491)
6,042,856
DIVIDENDS ON PAID-IN CAPITAL
BALANCE AT DECEMBER 31, 2004
$ 2,272,305,133
9,003,347
COMPREHENSIVE INCOME
NET CHANGE IN SHARE ACCOUNTS
Total
Members’
Equity
(1,075,126)
$ 2,534,993,350
$ 25,681,996
$ 85,800,284
(1,075,126)
$ (1,251,730)
$ 2,645,223,900
36/37
Statements of Cash Flows
Year ended December 31,
2005
Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net cash provided
by operating activities:
Cumulative effect of change in accounting
Depreciation, amortization and accretion
Net gain on sales of securities
Net change in dividends and interest payable
Other, net
$
7,499,395
2004
$
9,003,347
(401,712)
2,435,211
(1,091,914)
2,422,808
(3,043,822)
6,173,916
(1,012,114)
2,065,247
(4,907,589)
7,819,966
11,322,807
(207,494,320)
(878,234,893)
(368,255,623)
(787,323,520)
620,275,528
329,579,848
(11,268,213)
(33,605,004)
14,254
(2,379,025)
603,742,730
253,484,571
(30,349,948)
(16,785,209)
8,457
(846,084)
(183,111,825)
(346,324,626)
Cash flows from financing activities:
Net change in commercial paper and other borrowings
Net change in share accounts
Dividends on paid-in capital
130,040,000
26,634,402
(1,075,126)
34,302,314
335,573,234
(602,122)
NET CASH PROVIDED BY FINANCING ACTIVITIES
155,599,276
369,273,426
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
(19,692,583)
109,996,541
34,271,607
75,724,934
NET CASH PROVIDED BY OPERATING ACTIVITIES
Cash flows from investing activities:
Net change in investments in financial institutions
Purchases of securities available for sale
Proceeds from maturities and principal paydowns of
securities available for sale
Proceeds from sales of securities available for sale
Net change in deferred deposits
Net change in loans to members
Net change in NCUA share insurance deposit
Purchase of property and equipment
NET CASH USED IN INVESTING ACTIVITIES
CASH AND CASH EQUIVALENTS AT END OF YEAR
$
90,303,958
$ 109,996,541
Supplemental disclosure:
Dividends on share accounts and interest paid
$
76,886,550
$
41,184,341
38/39
Notes to Financial Statements
(1) SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
The purpose of Corporate One
Federal Credit Union (Corporate One)
is to foster and promote the economic
well-being, growth and development of
our membership base through effective
funds management, along with loan,
investment and correspondent services
for the ultimate benefit of our credit
union members. Corporate One
has a national field of membership and
operates primarily in the midwest part
of the United States. Corporate One is
subject to risks in the normal course of
business. These include market/interest
rate, credit, liquidity and operational risks.
reporting period. Actual results could
differ from those estimates.
Corporate One provides credit unions
access to the securities market through a
branch of CU Investment Solutions, Inc.
(ISI), a National Association of Securities
Dealers (NASD) registered broker/dealer,
housed within its office. As a co-broker
of Primary Financial Company LLC
(Primary Financial), Corporate One
also provides credit unions access to
Primary Financial’s SimpliCD program
for convenient, nationwide access to
competitive rates on federally insured
certificates of deposit.
(b) Investments in Financial
Institutions
Investments in financial institutions consist
of interest-bearing deposits primarily in
U.S. Central and other federally insured
depository institutions, and Federal Home
Loan Bank (FHLB) of Cincinnati stock.
The accounting and reporting policies of
Corporate One conform with accounting
principles generally accepted in the
United States of America (GAAP) and
prevailing practices within the financial
services industry, except as discussed in
note 1(h). The preparation of financial
statements in conformity with GAAP
requires management to make estimates
and assumptions that affect the reported
amounts of assets and liabilities and
disclosure of contingent assets and
liabilities at the date of the financial
statements and the reported amounts
of income and expenses during the
The following is a description of the more
significant accounting policies Corporate
One follows in preparing and presenting
our financial statements.
(a) Cash and Cash Equivalents
Cash and cash equivalents include
cash and amounts due from
depository institutions.
Corporate One is required to maintain
cash or deposits with the Federal Reserve
Bank. The required amount at December
31, 2005 was approximately $3.0 million.
(c) Securities
Securities not classified as held-to-maturity
or trading are classified as available
for sale, and are carried at fair value.
Unrealized gains and losses on these
securities are excluded from earnings, and
are reported as a separate component of
members’ equity. Such securities include
those that may be sold in response to
changes in interest rates, changes in
prepayment risk or other factors.
Amortization of premiums and accretion
of discounts are recorded as adjustments
to interest income from securities using
the interest method. Realized gains and
losses on the sale of securities available for
sale are credited or charged to earnings
when realized based on the specificidentification method.
Available-for-sale and held-to-maturity
securities are evaluated individually
to determine if a decline in fair value
below the amortized cost is other than
temporary. To determine whether the
impairment is other than temporary,
Corporate One considers whether
it has the ability and intent to hold
the investment until a price recovery.
Corporate One also considers the
reasons for the impairment and the
severity and duration of the impairment.
If the impairment was determined to be
other than temporary, the cost basis of
the security would be written down to
fair value as a new cost basis and the
amount of the write down would be
included in earnings.
(d) Loans to Members
Loans to members consist of settlement
loans, demand loans, certificate
secured loans and term loans. Loans are
stated at the current principal amount
outstanding. Interest income is accrued
on the daily balance outstanding at the
borrowing rate. Corporate One evaluates
each member’s creditworthiness on a
case-by-case basis. Loans are generally
collateralized by member credit union
share accounts and other member assets.
An allowance for loan losses was not
considered necessary at December 31,
2005 and 2004 based on management’s
continuing review and evaluation of the
loan portfolio and its judgment as to the
effect of economic conditions on the
portfolio. The evaluation by management
includes consideration of past loan loss
experience, changes in the composition
of the loan portfolio, the current
financial condition of the borrower,
quality of the collateral and the amount
of loans outstanding.
Corporate One incurred no loan losses
in either 2005 or 2004 and considers no
loans impaired as of December 31, 2005.
deposits from the general public and
usually are not democratically controlled by
their members.
(e) Deferred Deposits
Deferred deposits represent deposits
for which Corporate One has received
notification from the Federal Reserve
Bank but has not received credit. The
Federal Reserve Bank generally credits
deferred deposits within one to three
days of notification.
If members’ shares had been presented as
liabilities, total liabilities would have been
$2.53 billion and $2.51 billion greater and
members’ equity would have been less by
like amounts at December 31, 2005 and
2004, respectively.
(f) Property and Equipment
Property and equipment, included in
other assets on the balance sheets,
are stated at cost net of accumulated
depreciation. Depreciation is computed
using the straight-line method and is
based on the estimated useful lives of
the assets. Maintenance and repairs are
expensed as incurred.
(g) Income Taxes
Corporate One is exempt from federal
and state income tax pursuant to Section
501(c)(1) of the Internal Revenue Code
and Section 122 of the Federal Credit
Union Act, respectively.
(h) Members’ Share Accounts
Members’ share accounts are classified as
equity to denote the ownership interest of
the members. This classification conforms
to the regulatory requirements of the
National Credit Union Administration
(NCUA). Corporate One believes that
the American Institute of Certified
Public Accountants, in publishing a
guide opining that credit unions’ savings
accounts should be classified as liabilities
“consistent with the prevailing practice
of mutually owned savings and loan
associations and savings banks,” erred
in not understanding that credit unions
are fundamentally dissimilar to such
institutions which, for example, accept
Credit unions transacting business with
Corporate One are required to be a Partner
member or an Associate member.
Membership capital shares (MCS) are
required for Partner membership in
Corporate One. Partner members enjoy
Corporate One’s most favorable rates on
their investments and enjoy the lowest
fees on settlement services. MCS do not
have a stated maturity. These shares are
not subject to share insurance coverage
by the National Credit Union Share
Insurance Fund (NCUSIF) and, in the event
of liquidation of Corporate One, are
payable only after satisfaction of all other
claims. Notice of intent to decapitalize is
required and once notification is given, the
deposit will be redeemed in three years. At
December 31, 2005, there were $33,000
shares on notice.
Corporate One also offers an Associate
membership. Associate members are
required to maintain a $5 deposit. They
may earn lower rates than Partner members
on their investments with Corporate One
and pay fees on settlement services with
Corporate One according to the Associate
member rate and fee schedules.
(i) Paid-in Capital
Paid-in Capital (PIC) shares are investments
by member credit unions and denote their
ownership interest in Corporate One.
PIC has no stated maturity date, requires
a 20-year notice of intent to withdraw,
earns dividends that are non-cumulative,
and is classified as equity in the financial
statements. PIC is not subject to share
insurance coverage by the NCUSIF and,
in the event of liquidation of Corporate
One, is payable only after satisfaction of
all other claims and the repayment of
MCS. At December 31, 2005, there were
$375,000 shares on notice.
(j) Reserves and Undivided Earnings
Reserves and undivided earnings represent
earnings not distributed as dividends
to members. Portions of earnings are
set aside as reserves in accordance with
Corporate One’s policy and the NCUA’s
rules and regulations.
(k) Settlement Fees
Settlement fees are earned on various
settlement services provided to credit
unions and their affiliates. These services
consist of ACH and ATM programs,
depository services, share draft
processing, and certificate of deposit
and securities brokering.
(l) Reclassifications
Certain reclassifications have been
made in the prior year’s financial
statements to conform to the
presentation for the year ended December
31, 2005. These reclassifications had no
impact on net income.
2)
INVESTMENT IN PRIMARY
FINANCIAL COMPANY LLC
In 2003, Corporate One sold the
majority of its wholly owned subsidiary
Primary Financial to Corporate
Exchange, LLC (Corporate Exchange)
for cash, a note receivable, and shares
of Corporate Exchange. Such shares
were approximately 7 percent of the
outstanding shares at the date of the
acquisition and valued at $9,000. In
accordance with applicable accounting
guidance at that time, Corporate One’s
investment in Primary Financial was
accounted for at cost.
In March 2004, the Emerging Issues
Task Force (EITF) issued EITF No. 03-16,
Accounting for Investments in Limited
Liability Companies (LLC). This EITF
indicates that LLC investments should
be accounted for using the equity
method if the LLC meets criteria similar
to that of a partnership. The equity
method requires an investor to record
an investment at cost at the date of
acquisition and adjust its carrying
amount to recognize the investor’s
share of the earnings or losses of the
investee after the date
of acquisition.
settlement fees in the accompanying
statements of income.
Corporate One has determined that our
investment in Primary Financial meets
the criteria outlined in EITF No. 03-16
and should be accounted for using the
equity method, and, as such, Corporate
One adopted EITF No. 03-16 effective
January 1, 2005. As permitted by EITF
No. 03-16, we recorded a cumulative
effect of change in accounting of
$402,000, which represents Corporate
One’s share of the net assets of Primary
Financial at January 1, 2005. We also
recognized income of $59,000 related
to our share of Primary Financial’s
earnings in 2005 as a component of
Corporate One is a co-broker of Primary
Financial and, as such, earns a spread on
each certificate placed by Corporate
One. The original co-broker agreement
that was in place prior to the sale
remains in effect, and the terms are
similar to the terms of the agreements
with other co-brokers.
In addition to the consideration received
at the time of the sale, for 12 years,
Corporate One will receive additional
spread on the certificates it places under
the co-broker agreement discussed above.
Corporate One, for five years, will also
2005
Table One
Securities available for sale:
Collateralized mortgage obligations:
Fixed-rate
Variable-rate
Agency and whole loan mortgagebacked and asset-backed securities:
Fixed-rate
Variable-rate
TOTAL SECURITIES AVAILABLE FOR SALE
Amortized Cost
$
1,061
99,532
Gross
Unrealized Gains
Gross
Unrealized Losses
$
Fair Value
144
3
36
247,059
914,323
15
1,572
2,256
688
244,818
915,207
$ 1,261,975
$ 1,731
$ 2,983
$ 1,260,723
Gross
Unrealized Losses
Fair Value
$
$
1,058
99,640
2004
Amortized Cost
Securities available for sale:
Fixed-rate
Variable-rate
Fixed-rate
Variable-rate
$
14,329
58,744
Gross
Unrealized Gains
$
8
146
$
12
4
$
14,325
58,886
329,639
930,151
303
1,488
1,372
655
328,570
930,984
$ 1,332,863
$ 1,945
$ 2,043
$ 1,332,765
40/41
receive a portion of the spread on all
certificates placed by certain co-brokers
that were placing certificates at the
time of the sale. Further, for 12 years,
Corporate One will receive a royalty
on all other co-broker placements of
certificates of deposit through
Primary Financial. Corporate One
recognized income of $551,000 in
2005 and $854,000 in 2004
related to these additional spread and
royalty arrangements.
Simultaneous with the sale of Primary
Financial, Corporate One entered
into a management contract with
Primary Financial. For a period of two
years beginning September 1, 2003,
Corporate One agreed to provide
Primary Financial with executive
management services, including
executive oversight, event planning
and marketing services. For a period
of three years beginning September
1, 2003, with the option to renew
annually, Corporate One agreed to
provide Primary Financial with certain
support services including accounting,
payroll and benefits administration,
technical support and certain treasury
functions. Corporate One recognized
$475,000 in 2005 and $524,000 in
2004 related to this management
contract as a component of settlement
fees in the accompanying statements
of income.
(3) SECURITIES
The amortized cost and fair value
of securities at December 31 are
summarized in Table One.
Corporate One does not believe any
securities in the investment portfolio
at December 31, 2005 and 2004
were other than temporarily impaired.
The unrealized losses in the portfolio
resulted primarily from increases in
market interest rates and not from
deterioration in the creditworthiness
of the issuer. The unrealized losses
on securities that have been in loss
positions less than 12 months and
greater than 12 months at December 31
are summarized in Table Two.
2005
Table Two
Fixed-rate
Variable-rate
Fixed-rate
Variable-rate
Total Temporarily Impaired Securities
Less Than 12 Months
12 Months or Longer
Fair
Value
Fair
Value
Unrealized
Losses
$
Total
Unrealized
Losses
1,058
523
154,115
202,463
(838)
(496)
81,479
24,214
(1,418)
(192)
235,594
226,677
(2,256)
(688)
$ 413,252
$ (1,369)
$ 107,274
$ (1,614)
$520,526
$ (2,983)
$
(3)
(1)
$
Unrealized
Losses
(35)
$ 56,674
$
Fair
Value
1,058
57,197
$
(3)
(36)
2004
Fixed-rate
Variable-rate
Fixed-rate
Variable-rate
Total Temporarily Impaired Securities
$
Less Than 12 Months
12 Months or Longer
Fair
Value
Fair
Value
1,256
1,224
Unrealized
Losses
$
(2)
$
7,285
5,374
228,119
185,114
(1,145)
(627)
35,393
22,470
$ 415,713
$ (1,774)
$ 70,522
Total
Unrealized
Losses
$
$
(10)
(4)
Fair
Value
$
8,541
6,598
Unrealized
Losses
$
(12)
(4)
(227)
(28)
263,512
207,584
(1,372)
(655)
(269)
$486,235
$ (2,043)
42/43
The expected distributions of securities
available for sale at December 31, 2005
are reflected in Table Three. Expected
distributions may differ from contractual
final maturities because of scheduled
principal paydowns and because issuers
may have the right to call or prepay
obligations with or without call or
prepayment penalties. The majority of
the variable-rate securities are amortizing
securities and the entire principal amount
outstanding is included in the maturity
category that corresponds with the final
return of principal.
At December 31, 2005, approximately
80 percent of the dollar amount of
Corporate One’s securities were
variable-rate securities, the majority
of which had interest rates that reset
monthly, predominantly based upon
LIBOR. Of these variable-rate securities,
20 percent of the dollar amount of such
securities had interest rate caps that are
fixed at the time of issuance and the caps
range from approximately 5 percent to
18 percent. Less than 2 percent of the
dollar amount of variable-rate securities
had interest rate caps that fluctuate
depending on the resetting of the
interest rate on the underlying collateral
of the security.
Table Four provides a summary of
securities’ gain (loss) activity and the net
represents other comprehensive loss.
(4) OTHER ASSETS
Included in other assets is a deposit with
the NCUA for share insurance, accrued
interest receivable, accounts receivable
and net property and equipment.
Members’ shares are insured by the
NCUA up to $100,000. For such
insurance coverage to be in place,
Corporate One must maintain a
non-interest-earning NCUA share
insurance deposit in an amount equal
to 1 percent of Corporate One’s total
insured shares. At December 31, 2005
and 2004, the deposit was $649,099 and
$634,846, respectively.
Property and equipment, valued at
cost less accumulated depreciation, at
December 31 are summarized in
Table Five.
(5) COMMERCIAL PAPER,
LINES OF CREDIT AND OTHER
BORROWINGS
Corporate One had no outstanding
commercial paper at December 31,
2005 and 2004. Commercial paper
outstanding averaged approximately
$47.0 million and $44.7 million during
2005 and 2004, respectively, and the
maximum amount outstanding at any
month-end during 2005 and 2004
was $175.0 million and $85.0
million, respectively.
Corporate One sells securities under
agreements to repurchase the same
or “substantially the same” security at
a specified future date and price. The
securities underlying the agreements
are delivered to broker/dealers who
Maturity Distribution
Table Three
Fixed-rate:
Due in one year or less
Due after one year through five years
Due after five years through ten years
Due after ten years
Amortized Cost
$
128,141
112,441
605
6,933
Fair Value
$
127,396
110,958
590
6,932
TOTAL FIXED-RATE SECURITIES
AVAILABLE FOR SALE
248,120
245,876
Variable-rate:
Due in one year or less
Due after five years through ten years
Due after ten years
99,304
361,098
334,436
219,017
99,376
361,461
334,951
219,059
1,013,855
1,014,847
$ 1,261,975
$ 1,260,723
TOTAL VARIABLE-RATE SECURITIES
AVAILABLE FOR SALE
Table Four
2005
2004
Net unrealized loss on securities available
for sale arising during the period
$
Less: Net realized gain from sales of
securities available for sale
OTHER COMPREHENSIVE LOSS
(62)
1,092
$
(1,154)
$
(1,948)
1,012
$ (2,960)
arrange the transaction. The broker/
dealers may have sold, loaned or
otherwise disposed of such securities in
the normal course of their operations
and have agreed to resell to Corporate
One the same or “substantially the
same” security at the maturity of the
agreement. At December 31, 2005
and 2004, Corporate One had no
agreements to repurchase securities.
Corporate One did not sell any securities
under agreements to repurchase during
2005. During 2004, Corporate One
sold securities under agreements to
repurchase that averaged approximately
$12.5 million and the maximum
outstanding at any month-end was
$113.0 million.
Corporate One has received
commitments from several financial
institutions enabling Corporate One
to borrow funds under revolving lines
of credit through October 2006. At
December 31, 2005 these commitments
totaled $135.0 million and no amounts
were outstanding on these lines of
credit. The interest rates on these lines
are indexed off of money market rates,
primarily LIBOR, plus a margin of up
to 50 basis points. As collateral for
these lines of credit, Corporate One
has pledged securities to these financial
institutions that have a fair value of
approximately $153.1 million.
In addition, Corporate One has an
uncommitted line of credit with U.S.
Central that, by its nature, may be
withdrawn by U.S. Central. Corporate
One may take advances on this line of
credit up to $750.0 million based on the
amount of eligible collateral available to
support such advances. Eligible collateral
consists of all shares and certificates
with U.S. Central. As such, all of
Corporate One’s shares and certificates
with U.S. Central have been pledged
under this line of credit agreement. The
interest rate on this line is variable and
is established by U.S. Central on a daily
basis. At December 31, 2005 and 2004,
Corporate One had $29.0 million and
$13.5 million outstanding, respectively,
on this line of credit.
As a member of the FHLB of Cincinnati,
Corporate One is eligible to take
advantage of the FHLB’s numerous
credit products and advances.
Advances and borrowings from the
FHLB are required to be collateralized
by securities held in safekeeping by
the FHLB. At December 31, 2005 and
2004, Corporate One had securities
held in safekeeping at the FHLB with
fair values of approximately $385.7
million and $339.0 million, respectively,
which provided a borrowing capacity
of $334.5 million and $302.0
million, respectively. At December
31, 2005 and 2004, borrowings of
$334.5 million and $220.0 million
were outstanding at interest rates
of 4.12 percent and 2.20 percent,
respectively. These borrowings
matured in January 2006 and
January 2005, respectively.
(6) SHARE ACCOUNTS AND
PAID-IN CAPITAL
Balances and weighted average
rates of share accounts and PIC at
December 31 are summarized in
Table Six.
Settlement and regular share
accounts are available to members
on demand and pay dividends either
Table Five
2005
2004
$ 4,287
11,044
$ 4,249
8,765
15,331
13,014
8,703
7,349
$ 6,628
$ 5,665
Buildings and improvements
Equipment
Less: Accumulated depreciation
NET PROPERTY AND EQUIPMENT
Table Six
2005
(Dollar amounts are
in thousands)
Settlement and
regular shares
Balance
Rate
Balance
Rate
$ 1,217,184
3.33%
$ 1,307,854
1.78%
1,232,788
3.71%
1,120,113
2.58%
85,021
3.75%
80,392
1.75%
Share certificates
MCS
TOTAL SHARE
ACCOUNTS
PIC
2004
$ 2,534,993
$
25,682
$ 2,508,359
5.25%
$
25,682
3.25%
daily or monthly. Share certificate
accounts have specific maturities and
dividend rates. Dividend payments
on share certificate accounts vary
according to the type of share
certificate issued and the length
of maturity. Total share certificate
accounts by maturity at December 31,
2005 are summarized in Table Seven.
established in the contract. Advances
on these commitments generally
require repayment within one year
of the advance. Since a portion of
the commitments are expected to
terminate without being drawn upon,
the total commitment amounts do
not necessarily represent future
cash requirements.
(7) COMMITMENTS AND
CONTINGENCIES
Corporate One is a party to various
financial instruments with off-balancesheet risk that are used in the normal
course of business to meet the
financing needs of our members and to
manage our exposure to market risks.
These financial instruments involve,
to varying degrees, elements of credit
risk that are not recognized in the
balance sheets.
(8) RETIREMENT PLAN
Corporate One is a party with Primary
Financial to two defined contribution
plans which cover substantially all of
their employees. One of the plans is a
contributory plan, to which employees
can contribute a portion of their
compensation on a pre-tax basis.
In 2005 and 2004, for each eligible
participant, Corporate One contributed
a total of 11.5 percent of the
participant’s eligible compensation to
the participant’s accounts in the plans.
Retirement expense was approximately
$640,000 in 2005 and $474,000
in 2004.
These financial instruments include
commitments to extend credit.
The contractual amounts of these
instruments represent the extent of
Corporate One’s exposure to credit loss.
Corporate One uses the same credit
policies in making these commitments
and obligations as it does for onbalance-sheet instruments. In extending
commitments, Corporate One evaluates
each member’s creditworthiness on
a case-by-case basis. All outstanding
commitments are subject to collateral
agreements and have termination
clauses. At December 31, 2005 and
2004, these financial instruments
included outstanding commitments
to extend credit totaling
approximately $874.0 million and
$700.0 million, respectively.
Commitments to extend credit to
members remain effective as long as
there is no violation of any condition
(9) FAIR VALUE OF FINANCIAL
INSTRUMENTS
The estimated fair values of financial
instruments have been determined by
Corporate One using available market
information and appropriate valuation
methodologies. Due to their short-term
nature, the fair values of cash and cash
equivalents, deferred deposits, NCUSIF
deposit, and dividends and interest
payable approximate carrying values.
The fair values of loan commitments
are determined based on the fees
currently charged to enter into similar
agreements, taking into consideration
the remaining terms of the agreements
and the present creditworthiness of the
counterparty. Neither the fees earned
during the year on these instruments
nor their fair value at year’s end are
material to the financial statements.
The fair values of Corporate One’s
remaining financial instruments were
based on the following methods
and assumptions:
• Investments in financial institutions
are based on discounted cash flow
analyses using current market rates.
• Securities available for sale are
based on quoted market prices.
• The fair value of loans to members
is estimated using discounted cash
flow analyses, using interest rates
currently offered for loans with
similar terms to members of similar
credit quality.
• The fair value of commercial paper
and other borrowings is based on
discounted cash flow analyses using
current market rates.
• The fair values approximate
carrying values for share accounts
payable on demand at the balance
sheet date. The fair value of
fixed-maturity share accounts is
2005
Table Seven (Dollar amounts are in thousands)
Due in 90 days or less
$
233,180
Due after 90 days through one year
577,110
417,276
Due after five years
TOTAL SHARE CERTIFICATES
5,222
$ 1,232,788
44/45
estimated by discounting the future
cash flows using the rates currently
offered for share certificates of
similar remaining maturities.
The fair values of Corporate One’s
financial instruments at December 31
are summarized in Table Eight.
(10) REGULATORY
REQUIREMENTS
The NCUA periodically examines
Corporate One’s operations as part of
its legally prescribed oversight of credit
unions. Based on its examination, the
NCUA can direct Corporate One to
change operations and management,
adjust historical financial statements,
and make other changes in accordance
with their findings. Additionally,
the NCUA requires that corporate
credit unions maintain a minimum
capital ratio (capital divided by 12
month rolling daily average net assets
(DANA)) based upon the corporate’s
investment authority as authorized
by the NCUA. There are a number
of remedies available to a corporate
credit union should its capital ratio
fall below the required minimum
ratio. However, despite such
remedies, the NCUA could restrict the
corporate’s ability to, among other
things, accept additional deposits,
open new accounts, make loans or
pay dividends. Throughout 2005 and
2004, Corporate One’s capital ratio
exceeded the required minimum
regulatory ratio of 5 percent. The
NCUA defines capital as reserves
and undivided earnings, PIC and
MCS. At December 31, 2005 and
2004, Corporate One maintained
a regulatory capital ratio of 7.05
percent and 6.93 percent, on total
regulatory capital of $196.5 million
and $185.5 million, respectively. The
NCUA also requires a corporate credit
union to retain earnings of up to 15
basis points of DANA if its retained
earnings ratio (reserves and undivided
earnings divided by 12 month
rolling DANA) falls below 2 percent.
Throughout 2005 and 2004, Corporate
One’s retained earnings ratio exceeded
2 percent. At December 31, 2005
and 2004, Corporate One’s retained
earnings ratio was 3.08 percent and
2.97 percent, respectively, on total
reserves and undivided earnings of
$86.0 million and $79.0 million. As of
March 13, 2006, Corporate One was
in compliance with all of the above
capital regulatory requirements.
2005
Table Eight
Carrying
Value
Assets:
Cash and cash equivalents
Investments in financial institutions
Securities available for sale
Loans to members
Deferred deposits
NCUSIF deposit
Liabilities and members’ equity:
Commercial paper and other borrowings
Dividends and interest payable
Share accounts
2004
Fair
Value
$
90,304
1,462,162
1,260,723
61,703
122,034
649
$
90,304
1,454,847
1,260,723
61,579
122,034
649
$
363,500
9,063
2,534,993
$
363,464
9,063
2,534,993
Carrying
Value
$
$
109,997
1,254,451
1,332,765
28,098
110,766
635
233,460
6,640
2,508,359
Fair
Value
$
$
109,997
1,251,171
1,332,765
28,079
110,766
635
233,440
6,640
2,508,359
You belong.
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FCU • First County FCU • First Energy Family CU • First Entertainment CU • First Financial CU • First Illinois CU • First Miami University Student FCU •
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Formica-Evendale FCU • Fort Defiance Community FCU • Fort Financial FCU • Fort Knox FCU • Fort Worth City CU • Fortress Federal CU • Forum CU
• Foseco EFCU • Fostoria Carbon EFCU • Franklin County School EFCU • Freedom Financial FCU • Freedom First CU • Fremont FCU • Fresno Fire
Department CU • GIC FCU • Garfield Community CU • Gateway CU • GE Evendale EFCU • Geauga CU • General CU • General Portland Peninsula
EFCU • Genesis ECU • Geneva Area School ECU • GenFed FCU • Girard CU • Glass City FCU • Glenview CU • Globe Industries ECU • GNC
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Plains FCU • Greater Abyssinia FCU • Greater Cincinnati CU • Greater Cleveland Fire Fighters CU • Greater Miami Community FCU • Greater Visions
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• I & M Tanners Creek EFCU • Illinois Credit Union League Service Corporation • Illinois Credit Union League • Imeco FCU • Indiana Carpenters FCU •
Industrial Distributors FCU • Industrial FCU • Integrity FCU • International Harvester ECU • Iron Workers FCU • ITT EFCU • Jackson County Co-Op CU
• JCS EFCU • Jeanne DArc CU • Jeep Country FCU • John Deere Community CU • Kabel FCU • Kemba CU • Kemba Delta FCU • Kemba Financial CU
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County Postal CU • Lakes FCU • Lakeshore Community CU • Lakeview FCU • Lakewood School CU • Lampco FCU • Lan Fair FCU • Landmark CU •
Lane Metropolitan CME CU • Langley FCU • LaPorte Community FCU • La-Porter FCU • Latvian Cleveland CU • Lawrence County School EFCU • LCE
FCU • Lebanon FCU • Leblond FCU • Libbey FCU • Lima Ohio Postal EFCU • LincOne FCU • Little Company of Mary ECU • Little Flower Parish (Toledo)
FCU • Local 219 FCU • Local 50 Plumbers & Steamfitters FCU • Local 697 FCU • Local No 673 CU • Local Union 392 FCU • Logan Community FCU •
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Community FCU • McGill FCU • Med/Pro FCU • Medical Care EFCU • Medina County FCU • Member 1 CU • Members Advantage CU (IL) • Members
Advantage CU (IN) • Members Capital CU • Members Choice CU • Members Choice PA FCU • Members First CU Inc • Members Heritage FCU • Members
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CU • Mesquite CU • Metro ECU • Miami University Community FCU • Middletown Area School CU • Middletown City EFCU • Middletown Hospital CU
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• Morton Salt CU • Motorists Insurance ECU • Mountain High FCU • Mt. Olivet FCU • Muncie FCU • Mutual FCU • N & W FCU • National Loan Service
Center LLC • Nationwide FCU • Navy FCU • New Albany Schools CU • New Castle Bellco FCU • New Horizon FCU • New Horizons CU • New Mexico
Energy FCU • New Spirit CU • NFCDCU Inc • Nickel Plate CU • Nickel Steel FCU • North Island CU • North Olmsted School EFCU • North Star FCU •
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FCU • Notre Dame FCU • Novi Community CU • nuVision Financial FCU • NYC Mercury CU • Oak Trust CU • Oakland Municipal CU • OARDC ECU •
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Star One CU • Stark County Chapter of OCUL • Stark FCU • Stark Metro Housing Authority FCU • Starlight Baptist Church CU • State Employees CU •
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• Toledo Fire Fighters FCU • Toledo Metro FCU • Toledo Police FCU • Toledo Postal ECU • Toledo Teamsters FCU • Toledo Urban FCU • Tool Steel CU •
TopMark FCU • Total Assurance FCU • Towpath CU • TPS CU • Trailview FCU • Transmission Builders FCU • Tri County CU • Triangle CU • Trumbull
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CU • Universal 1 CU • University FCU • University of Illinois ECU • University of Kentucky FCU • University of Nebraska FCU • UPS CU • US FCU • USC
CU • Utah Community CU • Utelco CU • UT-MUO FCU • UTU FCU • Vacationland FCU • Valley Council CU • Vantage FCU • VBS FCU • Virginia CU Inc
• VyStar CU • Warren MSD FCU • Warren Niles Republic EFCU • Wayne County Community FCU • Weatherhead FCU • WECU CU • WELL Tel FCU •
Wepco FCU • WES CU • West AirComm FCU • West Holmes School ECU • West Ohio United Methodist CU • West Stark Community FCU • West Toledo
FCU • West Virginia FCU • Western Buckeye Chapter of OCUL • Western CU • Western Region FCU • Westlake Technology CU • Westminster FCU •
Westmoreland Community FCU • WGM FCU • WHG-PGH Steel Community FCU • Whitehall CU • Whitewater Community CU • Wickliffe School ECU •
Wilberforce University FCU • Willow Island FCU • Wiregrass FCU • Wiremens CU • Wittenberg University FCU • Woodco FCU • Woodlawn Auto Workers
FCU • Workers CU • Wright Patt CU • Wright-Dunbar Area CU • WT Community FCU • WYMAR FCU • Xerox FCU • Yellow Springs Community FCU • YHA
South Unit FCU • Yorkville Community FCU • Youngstown City School CU • Youngstown Firefighters CU • Youngstown Ohio City EFCU • Zane Trace FCU
8700 Orion Place
Columbus, Ohio 43240-2078
P.O. Box 2770
Columbus, Ohio 43216-2770
866/MyCorp1
www.corpone.org

2005 Annual Report - Corporate One Federal Credit Union

Transcription

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