From the CEO
Lee Butke, President/ CEO, Corporate One Federal Credit Union
December 30, 2010

Dear Members:

Corporate One has had a strong 2010. Our unaudited financials through November show that your Corporate One has a solid financial foundation and a strong business model. First, and most importantly, we have not lost any of our member capital shares. We further strengthened our corporate by positioning you, our members, well from a retained earnings and capital perspective. We’ve made $11.6 million in net income through November, 30, 2010, which has enabled us to grow to $35 million in reserves and undivided earnings (RUDE). Combined with support from 39 new members through November, Corporate One continues to hold the most total capital dollars of any corporate credit union in the nation, with $182.8 million in total capital (current capital ratio of 5.33% meets the new regulation requirements of 5%).

Throughout 2010, we’ve continued to focus on expense control, which is evident in reduced expense levels compared to 2009. One ratio that we monitor closely is the percentage of expenses (excluding the NCUSIF premium assessment) we can cover with fee income. This ratio was 80.8 percent for the first eleven months of 2010, and is important as it indicates that we continue to operate one of the most efficient corporates in the nation, and that we’re working diligently to remain good stewards of your ownership investment with us.

Corporate One continues to receive strong support from our members, with just under $4.5 billion in assets under management (including on-balance sheet investments, SimpliCD sales and security sales). And, finally, an improvement in the markets has resulted in a dramatic 35 percent decrease in our Accumulated Other Comprehensive Loss (AOCL) since November 30, 2009.

On the horizon: 2011

Corporate One is in a strong position as we enter the New Year. We will use this positive momentum to continue providing value to our members through expense controls, increased profitability and risk mitigation. We also feel positive about the new regulation, and are moving forward with the changes needed to ensure compliance with the new regulations’ capital requirements.

Corporate One recently mailed official capital offering packets to all members, outlining how Corporate One intends to meet the new capital requirements, as outlined in the National Credit Union Administration’s newly published Regulation 704. The good news is that to meet the new capital requirements, we won’t be asking our existing capitalized Partner members for a single penny of new capital. We are simply asking for a “recommitment” of existing capital. Our offering also outlines how those members who are not currently capitalized with us may do so under the new requirements.

We have in-person town halls scheduled throughout Ohio and Indiana as well as in Illinois, Kentucky, West Virginia, Pennsylvania and New York in January to discuss the capital offering with our members. I encourage you to attend the meeting most convenient to you. For more information on the town halls and/or to register for one of the events, please click here or visit our Web site. I look forward to the opportunity to discuss Corporate One’s capital offering with you and answer any questions you may have about Corporate One and/or our offering.

With a strong 2010 almost behind us, we are looking forward to continuing our track record of success in 2011. On behalf of all of us at Corporate One, thank you for your continued support and all the best to you in the New Year.

Respectfully,

Lee C. Butke
President/CEO