We are pleased to present this thirty-seventh annual report to the members of Albertsons Employee’s Federal Credit Union.  Despite uncertainty in the financial markets and a weak economy, your credit union had a very successful year and experienced significant growth during 2002.

 The Federal Reserve lowered the Federal Funds Overnight Interest Rate to 1.25% after spending most of the year at an already unheard of low rate of 1.75%.  This puts rates at their lowest since 1961.  While many other financial institutions lowered their deposit rates to more closely match the Federal Funds Rate, we worked hard to keep our deposit rates above market.  That is the kind of dedication to members that you can expect from your Board of Directors.

 Net income actually rose in 2002, despite low yields on investments and fierce competition for loans.  This is in part due to the aggressive steps taken over the past year to improve efficiency and implement new products and services.  The Credit Union had a substantial increase in its Fees and Other Revenues as a result of the Money Gram program and the Guaranteed Asset Protection (GAP) and Mechanical Breakdown Protection (MBP) loan programs implemented during the year.  An increase in VISA transaction volumes also contributed to the increase in Fees and Other Revenues.

 Capital and reserves reached $28.2 million as of December 31, 2002, a 9.1% increase over 2001.  This puts the Credit Union’s Capital-to-Asset ratio at 17.0%, and its Net Worth Ratio, a calculation used by our regulator, the National Credit Union Administration (NCUA), to determine a credit union’s financial strength, at 16.2%.  By comparison, credit unions in our peer group have an average Net Worth Ratio of 10.7%.

 The Credit Union’s Assets grew to $165.8 million, a 7.7% increase over 2001.  Members’ savings grew to $138.4 million, a 7.6% increase over 2001 and member loans were at $72.6 million at year end, a 4.9% decrease.  With strong deposit growth and low loan demand, Cash and Investments grew to $89.1 million, a 21.6% increase over 2001.

 The need for constant improvement in productivity and increased efficiency in a competitive marketplace extends across all areas of the Credit Union’s operations.  Advances in technology have helped improve operational efficiencies, especially in the area of document imaging and record retention.  With continued advances in technology, electronic payments will continue to gain on traditional check writing in both acceptance and volume.  In response to this increased demand, the Credit Union implemented a new ATM/Point-of-Sale/MasterCard Debit program in October and there has been a substantial increase in debit card usage as members find this automated payment system both convenient and economical.

 The Credit Union remodeled its Orlando Branch Office in 2002 and also installed cash dispenser machines at the Salt Lake City and Portland Distribution Centers.  Support for this program remains strong and machines are on order for the Denver and Phoenix Distribution Centers.  We will continue to review additional cash dispenser sites where a strong commitment to the Credit Union exists.

 The growth and prosperity of the Credit Union can be attributed to many things, all of which play an important role in the cooperative nature of our organization.  We work hard to provide exceptional value to all members through innovative solutions, competitive rates and pricing, and quality service.  With your continued support, and the strong support we get from our sponsor, Albertson’s, Inc., we will improve our ability to provide beneficial financial services and maximize the value of credit union membership.

 We are pleased to be part of the team that produced the results reflected on the Statement of Financial Condition and Statement of Earnings and proud that we are part of the Credit Union industry.  Our sincere thanks to the Credit Union’s capable employees and volunteers.  They live the credit union philosophy through their strong commitment and dedication to credit union principles. 

 We also want to thank our members for their continued loyalty and confidence in Albertsons Employees’ Federal Credit Union.   We will work hard to develop processes that ensure we meet our members’ needs and expectations, and we are committed to building loyal relationships with our members, employees, sponsor and communities in which we operate.

 Phyllis Thomason             Robert P. Baker              Michael T. Shalz
President & CEO            Chairman                       Treasurer

 

Statement of Financial Condition
(as of December 31^st)

2002* 2001* 2000* Assets Cash and Equivalents $30,787,080 $41,071,044 $23,209,553 Investments 58,342,521 32,241,013 26,109,854 Loans to Members-Net 71,231,815 75,104,382 74,996,082 Accrued Interest Receivable 540,875 685,856 813,835 Property and Equipment-Net 3,262,958 3,385,830 3,377,772 Other Assets 1,618,657 1,384,032 1,278,980   $165,783,906 $153,872,157 $129,786,076 Liabillities Notes Payable $0 $0 $0 Dividends Payable 209,613 268,174 337,242 Other Liabilities 359,694 351,784 311,470 Shares Share Accounts 138,438,675 128,679,894 106,713,307 Total Liabilities and Shares 139,007,982 129,299,852 107,362,019 Members' Equity Regular Reserves 2,567,248 2,567,248 2,567,248 Undivided Earnings 24,208,676 22,005,057 19,856,809 Total Members' Equity 26,775,924 24,572,305 22,424,057   $165,783,906 $153,872,157 $129,786,076

* Taken from Audited Financial Statements

Statement of Earnings
(as of December 31^st)

2002* 2001* 2000* Interest Income Interest on Loans $5,704,458 $6,212,365 $6,173,201 Interest from Investments 2,614,334 2,806,247 2,804,122   8,318,792 9,018,612 8,977,323 Dividend and Interest Expense 3,399,846 4,221,447 4,332,916 Net Interest Income 4,918,946 4,797,165 4,644,407 Provision for Loan Losses 589,649 669,358 493,742 Net Interest Income After Provision for Loan Losses 4,329,297 4,127,807 4,150,665 Fees and Other Revenues 2,329,284 2,077,281 2,075,130 Operating Expenses Compensation and Benefits 2,087,252 1,899,735 1,784,135 Other Operating Expenses 2,367,710 2,194,495 2,154,944   4,454,962 4,094,230 3,939,079 Non-Operating Income/Expenses Provision for (Recovery of) Investment Loss 0 (9,147) 0 Other Non-Operating (Income)/Expense 0 (28,243) 0 Disposition of Assets 0 0 0 Net Earnings $2,203,619 $2,148,248 $2,286,716

* Taken from Audited Financial Statements

 

SUPERVISORY COMMITTEE REPORT

 The Supervisory Committee has ongoing responsibilities to appraise policies, review operational procedures and perform internal audits designed to verify that the accounting records accurately reflect the operations of the Credit Union.  The Supervisory Committee verifies that there are adequate internal controls in place to protect the Credit Union, its members, management and employees.

 The Supervisory Committee selected the national accounting firm of Deloitte & Touche LLP to conduct an independent audit of the Credit Union for calendar year 2002.  This audit included examination, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  The audit also included members’ account verification, review of share and loan ledgers, review of loan delinquency and the adequacy of the allowance for loan losses account, review of internal controls and procedures and confirmation of credit union investments.

 The Supervisory Committee received a copy of the Independent Auditors’ Report for the year ended December 31, 2002 and a copy of this report is available at the Boise Credit Union Office for members to review.  It is the opinion of the Supervisory Committee that Albertsons Employees’ Federal Credit Union is operating effectively, that the financial statements present fairly its financial position and that operations are handled in accordance with generally accepted accounting principles and related federal regulations.

 Doyle Troyer, Chairman
Supervisory Committee

Credit Union Officials and Management Staff

Phyllis Thomason, President & CEO
Michael S. Vickery, Vice President & COO
Theresa Koenen, Loan Manager
Ann Cargile, Loan Servicing Supervisor
Chris Demaray, Manager, Member Service & Human Resources
Leo Francis, Manager, Branch Operations & Regulatory Compliance
Bonnie Maxwell, Card Services Supervisor
Stacey Devereaux, Manager, Accounting & Electronic Services
Clem Godin, Orlando Branch Manager
Tanya Brumfield, Dallas/Fort Worth Branch Manager
Laura Sotelo, Los Angeles Branch Manager

Board of Directors

Robert P. Baker, Chairman
Bill Carter, Vice Chairman
Michael T. Shalz, Treasurer
Lary Matthews, Secretary
Kevan Fenderson
Cynthia Forsch
Doug Gibson
Pradip Mehta
Gary Morton


Supervisory Committee

Doyle Troyer, Chairman
Michele Koci
Roger Belnap
Mike Blackham

Offices – 

Boise Main Branch
P. O. Box 8145
Boise, ID 83707
(208) 385-5200 

Orlando Branch
3305 Lake Breeze Road
Orlando, FL 32808 
(407) 292-2006 

Dallas/Fort Worth Branch
1327 Brown Trail
Bedford, TX 76022
(817) 285-8292

Los Angeles Branch
341 E Imperial Hwy.
Fullerton, CA 92835
(714) 738-4681

Member Services
NCUA Deposit Insurance	Safe Deposit Boxes*
Payroll Deduction	VISA Credit Cards with 1% Purchase Rebate
Share Draft Checking	Personal Loans
Overdraft Protection	Real Estate Loans
-- Line of Credit	Home Improvement Loans
Direct Deposit	Automobile Loans
-- Government & Payrolls	RV Loans
Savings Accounts	Stock Loans
Vacation Club	Credit Disability Insurance
Christmas Club	Credit Life Insurance
Money Market Accounts	Free Cashiers Checks
Time Share Certificates	Lifetime & Family Membership
IRA’s	Roth IRA’s
Western Union Money Orders &	Free Notary Service**
Quick Collect	Toll Free Electronic Teller “ET”
Money Gram & Express Pay	Guaranteed Asset Protection (GAP)
CUNA Brokerage Services	Mechanical Breakdown Protection (MBP)
Free Travelers Checks	ATM/Point-of-Sale/MasterCard Debit
Discount Movie Tickets**	Internet Home Page
Free Home Banking “CUOnLine”	Bill Payer
Drive Through Window***	Excess Share Insurance Coverage
Quick Cash Dispensing Machines**

*Available Boise Only ** Available at Some Locations ***Available at Each Branch Office

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