Chairperson’s Report

On behalf of the Board of Directors of the B&V Credit Union, this report is provided to the membership to summarize the Credit Union’s operation during 2006, our 52nd year.  We continue to operate in accordance with the intent of our charter and in keeping with our founding principles.  To a considerable degree, our continued success is attributable to the commitment of our staff and our volunteer committee and board members as well as the ongoing support of our sponsor, Black & Veatch Corporation.

Highlights of 2006

Our Total Assets at the end of 2006 were approximately $35.2 million, which is nominally $2.3 million less than at the end of 2005.  Since our loans to members increased somewhat compared to loans in 2005, most of the decline in assets is due to a decline in member’s share accounts, including a number of Certificates of Deposits which were not renewed, which then reduces total funds available for investment.  Based on our assessment of available alternatives, we believe our members have been able to identify more competitive rates for their deposits, particularly for short-term investments, from other institutions and have taken advantage of those opportunities.  Unfortunately, we have not been able to compete with rates offered by these institutions, in part due to the longer-term perspective we consider to be more appropriate for the Credit Union’s investments.  Although our Certificate of Deposit rates were increased slightly in September to demonstrate to our membership that the Credit Union is attempting to be competitive with certificate rates offered at other institutions, the effect on our total deposits was not as significant as we had hoped.

Despite the fact that the Credit Union was unable to offer highly competitive rates on Certificates of Deposit, we were able to increase our dividend rate for share deposits in three of the four calendar quarters of 2006.

In an effort to increase assets during 2007, in March we will initiate a promotion intended to increase activity in our Home Equity (HE) program.  We believe this promotion will attract new borrowers by offering an attractive introductory interest rate, slightly below prime, for new loans.  Also, for the Spring 2007 adjustment date, we will also waive our right to upwardly adjust the current rate for existing HE loans.  Since these temporarily reduced loan rates will still be higher than the return we are able to obtain from currently available investments, our objective is to increase income from loans to enable us to offer more competitive dividend rates, thereby attracting additional deposits that will then be available to support increased loan activity.  In addition, we also expect that introduction of a share draft program which we will begin offering this year will lead to increased deposits and loan activity, funds we may not have attracted in the past as a result of our not offering checking type services. 

Our office staff level of four, full-time personnel is unchanged from recent years and is considered to be appropriate to support the number and types of services we offer and to accomplish the tasks necessary to maintain compliance with the ever-changing regulations to which the Credit Union is subject.  Although the share draft plan will increase staff workload to a degree, we believe that the planned implementation, along with thoughtful reassignment and sharing of responsibilities and tasks, will enable the present staff level to deal with this additional service without being overtaxed.  Only after we get further into the share draft program will we be able to make a final determination on this aspect.

The Credit Union continues to explore alternatives and identify a preferred method or mechanism by which we can better inform and communicate with employees in our sponsor firm’s domestic regional offices, many of whom are not yet members, about the Credit Union and the services we offer.  The approaching launch of our share draft program, in conjunction with the direct deposit arrangement we have with Black & Veatch, will provide an additional benefit we can use as a basis for promoting the Credit Union and should be a major step toward our objective of becoming our member’s primary banking institution.

Board of Directors

Howard O. Andrews, Chairperson
Lawrence F. Beil, Vice Chairperson
William G. Stannard, Treasurer
David J. Johnson, Assistant Treasurer
Stuart M. Storrs, Secretary