2008 Chairman's and President/CEO's Report

A Foundation Rooted in Strength, Stability and Trust

2008 was a positive year for your credit union. In spite of all the challenges brought on by the global economic crisis, Mutual Security sustained and grew, driven by a commitment to adhere to safe and sound business practices. Our dedication to you, our member/owners, was ever present in our decision making process during what many in the industry have described as one of the most difficult and devastating periods of our lifetime.

At a time when consumers were abandoning their relationships with large financial institutions, the membership at Mutual Security continued to grow to a record high of over 32,000 members with assets increasing to $224.2 million. Remaining steadfast in our commitment to providing members a safe haven for their financial needs, your credit union is proud to say that trust has been and continues to be a key component in developing and sustaining relationships with our member/owners

Looking back on 2008 we have made significant progress in our strategic goals despite the turbulent economic environment.

Our management worked vigorously to develop products and services designed to assist our members in achieving their financial goals. Products and services were analyzed to ensure that they offered additional value. Our Eco-Friendly Auto Loan was created to cater to those members dedicated to helping the environment. We introduced a new and exciting high-yield checking account, Ultimate Checking, which allows members to earn a significantly higher-than-average yield plus rewards them for using electronic services that save both time and money. Services such as our VISA Bonus Check Card ensured that members did not pay unnecessary fees with a network of over 67,900 surcharge free ATM’s nationwide and additional rewards were provided just for making every day purchases.

We enhanced programs such as our Skip A Payment Loan Program, which was expanded to include Home Equity and Mortgage Loans, and was designed to help members meet unforeseen expenses during a long cold winter of high heating costs.  In 2008 our Mortgage Department closed $16 million in mortgages. Our Spring Home Equity Loan Program was a tremendous success, allowing members to consolidate bills and to make upgrades to their homes for future savings. Our VISA Credit Card Program was converted to a new processing system to provide greater opportunities for members to receive even better rates and rewards while providing enhanced security features.

In keeping with the credit union philosophy of “people helping people”, we made significant strides to deliver on our pledge to improve financial literacy. In September of 2008, we proudly opened a new branch at New Fairfield High School. This branch provides students with internship opportunities and encourages young adults to develop sound early saving habits and offers instructions as how to handle their finances responsibly. Mutual Security staff presented Junior Achievement courses at local high schools, instructing young adults in money management skills. Our Annual Berny Klaus and Joe Fernandes Community Scholarship Program awarded $7,000 in scholarships to assist students in achieving their goal of pursuing higher education.

We were out and about in the communities we serve sponsoring many charitable events and hosting a variety of programs to improve our community relations. Our branch offices hosted several Art Shows for local schools showcasing the works of very talented young artists; sponsored “Stuff A Bus” days which collected non-perishable items for the local food pantries and supported numerous outreach programs to benefit the communities we serve. Once again, Mutual Security Staff were the top fundraisers for the CT Credit Union Charitable Raffle providing money to the CT Food Banks!

The Board of Directors, Management and Staff of Mutual Security will continue to provide you, our member/owners, the highest level of commitment to protecting your hard earned money. We will ensure that risk is managed conservatively and is based on safe and sound business practices. We remain uniquely positioned to offer highly competitive lending products that will enable our members to achieve their financial goals/dreams.

In these uncertain times, what is certain is our dedication to our core principles and values to ensure we meet and/or exceed our member’s needs and expectations. We thank you for your loyalty and dedication in making Mutual Security Credit Union one of the strongest, most stable and well trusted financial institutions in the state. At Mutual Security, “We Work for You” and look forward to serving you and strengthening our relationship as we move forward into our 55^th year in 2009!

Thank You!

Bruce M. Likly, Chairman of the Board of Directors

Larry F. Holderman, President/CEO