2007Annual Report

Board of DirectorsDon Rawe

Chair

Calvin SmithVice Chair

Jimmie Johnson, Sr.Treasurer

Linda KunzeSecretary

Judith BekiszDirector

Charles RamirezDirector

David WilliamsonDirector

Gerald AlfredAdvisory Director

Kim Birchett Mary Larson

Minnie Busby Claudia Lopez

Donna Fullen Simona Marmalichi

Mike Funk Chandra McPhearson

Lacey Gandy Asa Mercadel

Cindy Johnson Tammy Musso

Dawn Kaegael Kiley Priddy

Jennifer Kahan Minnie Sierra

Credit Union Staff

AGENDA

Call to Order ..............................................................Don Rawe, Board Chair

Invocation .........................................................................Jimmie Johnson, Sr.

Determination of Quorum ................................Linda Kunze, Board Secretary

Reading of 2006 Annual Meeting Minutes ........Linda Kunze, Board Secretary

Comments from the Chair ..........................................Don Rawe, Board Chair

Comments from the President ........................................Mike Funk, President

New Business .............................................................Don Rawe, Board Chair

Unfinished Business....................................................Don Rawe, Board Chair

Report of Nominating Committee

Door Prizes ..................................................................Calvin Smith, Director

Adjournment

Comments from the ChairLibertyOne Credit Union wants to be your primary financial institution.To that end, your Board of Directors and staff is committed to quality inall aspects of the operation of LibertyOne. Your Board meets monthly toprovide oversight to the operations of LibertyOne, and to set policy.During these monthly meetings the Board strives to maintain a qualityfocus.

LibertyOne is blessed with a staff that sees quality as its most importantjob. The staff is led by President Mike Funk and Vice President MaryLarson. They emphasis quality in all LibertyOne’s operations, and thecommitment of staff can be seen in the attitude they bring to their jobs,and in the services provided.

This commitment to quality has led LibertyOne to offer an extensivearray of services. These services include free checking, free worldwideATM’s, the five star program, internet access to your accounts, our loanprogram encompassing signature loans, automobile loans, home equityloans, and mortgage loans, and our savings program including regularsavings, CD’s and IRA’s. Since the date of our last Annual Meeting, anumber of additional services have been added to the wide range ofoffered services. During this period we began a program to offer studentloans, our online banking and ATM program are now real-time, and wehave established an Ambassador Program.

The Ambassador Program is an example of the culture of excellencethat LibertyOne strives to create. Through this program, individualLibertyOne members have been selected to serve as ambassadors tointroduce fellow employees to the many benefits a membership inLibertyOne offers. It is a way to tell the LibertyOne story to Federalemployees that are not currently members.

As a member, do you have your checking account with LibertyOne? Doyou look to LibertyOne as your first source for automobile financing? Ifyou are considering a home equity loan, do you think about securingthis loan at LibertyOne? Do you have your savings withLibertyOne? If you find the answer is yes to these questions,then LibertyOne can be considered yourprimary financial institution. We hope youwill continue to use these services and lookinto other services offered by LibertyOne. Ifnot, please visit LibertyOne and let our staffshow you the many benefits thatLibertyOne can offer.

Don RaweChairman, Board of Directors

(Years ended December 31) 2 0 0 7 2 0 0 6

INCOME

Interest from Loans $ 2,624,889.24 $ 2,477,910.09

Income from Investments 1,082,908.91 863,680.80

Other Operating Income 802,015.16 759,071.45

Total Income $ 4,509,813.31 $ 4,100,662.34

EXPENSE

Employee Compensation $ 746,418.41 $ 712,410.87

Employee Benefits 193,303.07 192,541.03

Travel & Conference Expense 42,437.80 41,802.83

Office Operations Expense 582,980.72 628,675.97

Education & Promo Expenses 80,249.08 93,292.49

Loan Servicing Expense 43,167.69 37,076.02

Professional and Outside Services 98,978.20 79,512.30

Provision for Loan Losses 268,923.46 215,599.84

Operating Fees 10,857.74 9,968.21

Miscellaneous Expenses 45,779.31 52,847.62

Total Operating Expense $ 2,113,095.48 $ 2,063,727.18

Non-Operating Gains or Losses $ 0.00 $ 0.00

Dividend on Deposits 2,103,267.32 1,742,233.12

NET INCOME $ 293,450.51 $ 294,702.04

DISTRIBUTION OF EARNINGS

Interest Paid to Members $2,103,267 $0.46

Expenses 2,113,095 0.47

Net Income 293,451 0.07

$4,509,813 $ 1.00

Interest Paid to Members

46%Expenses

47%

Net Income

7%

Financial Highlights

Distribution of Earnings

Comments from the PresidentI am so proud to work at a credit union that still goes out of its way to putits members first!

In a time when most credit unions have given up on the principles on whichwe were all founded and decided to let everyone join their credit union,YOUR credit union has done just the opposite. We’re taking a stand andpledging to serve only U.S. Government employees and their families andwe’re proud of that. We’ve been making some phone calls to federalworkers and trying to do what we can to get the word out and surprisinglyenough, some people are disturbed that we are calling. We are all in thistogether and you are the reason LibertyOne even exists, so it seems to methat we should all be helping each other out.

Your credit union spends over $8,000 per month just reimbursing ATM feesthat other banks charge you to get your money. To our 5-Star members, wegive you 1% higher on CD rates that were already among the highestaround, before we added the 1%. This can all be done because of thepeople-helping-people philosophy and when it appears that any of ourmembers, board members or employees are abandoning this principle, ithurts me deeply. We should be proud that we all belong to a credit unionthat still reviews loans based on character, capacity to repay and collateral.Sure, we pull your credit, but we evaluate all of it and don’t just look at ascore to determine if we will approve it or not.

To make things better for you, we have recently made all of your ATM anddebit card transactions “real-time” and your online banking transactions arenow posted in real-time. Again, there was significant expense in doing this,but we believe we owe you that kind of service. With mobile banking froma cell phone or hand held becoming more and more popular, we are alsomoving into that area and will devote significant resources to that project.

We have a new financial services representative that will actually come toyour house for an appointment; now that’s personal service! Some of ouremployees have made trips to members’ homes to deliver loan documentswhen the member couldn’t make it to the credit union and I routinely hearour employees talking to members on the phone and offering to do anythingthey can to make the member happy. In the society we live in today, this isunfortunately not the norm. I am proud to work somewhere thatthis is the norm. It’s expected by the members, by the boardmembers and by each employee.

I hope if you have the opportunity to talk to a co-worker, familymember or friend about LibertyOne Credit Union, you will helpthem understand how different we really are. Your creditunion doesn’t plan to let just anyone join and we areproud to be putting you first as we plan for the future.Show your pride and support YOUR credit union…it isnot owned by anyone else; it’s yours!

Mike FunkPresident

$8, 6

70, 9

39

$8, 7

98, 8

78 $9, 1

77, 7

40

$9, 7

78, 6

39

200520042003 2006 2007

$10

$9.5

$9

$8.5

$8

$7.5

$8, 3

90, 2

54

2006 2007200520042003

$60

$50

$40

$30

$20

$10

$46,

010,

417

$48,

943,

696

$51,9

37,1

43

$54,

484,

449

$57,0

66,3

68

Total Reserves (in millions)

Total Deposits (in millions)

$958,029

$2,401,026

$1,395,658

$1,315,386

$1,195,524

$800,514

$1,016,941

$1,076,153

$834,107

$2,654,870

$1,742,707

$962,698

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

$0 $500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

2007 New Loans (excludes 1st Mortgages and MasterCards)

PERSONAL LOANSNew Car 744 $12,427,023.53Used Car 1,207 11,958,573.09Boats, Motorcylces, RV 135 1,764,043.26Signature 2,142 3,916,086.17Credit Cards 1,134 1,502,845.56First Mortgage 72 7,957,767.95Home Equity 97 2,101,305.28Other Loans 118 629,012.61Total Personal Loans 5,649 $42,256,657.45Allowance for Loan Losses (240,694.44)Net Personal Loans $42,015,963.01

CASHTotal Cash on Hand $ 404,345.02

INVESTMENTSSWC Membership $ 644,281.95SWC CMF 3,632,249.18Banks and S&Ls 3,449,882.78NCUSIF 517,189.16U.S. Government & Agencies 16,098,660.81Unrealized Gain / Loss 47,043.08Other Investments 0.00Total Investments $24,389,306.96

FIXED ASSETSFurniture & Fixtures $1,939.55Leasehold Improvements 26,819.21Computer Equipment 47,910.67Total Fixed Assets $ 76,669.43

OTHER ASSETSTotal Other Assets $ 472,848.96

TOTAL ASSETS $ 67,359,133.38

Balance Sheet / Assets – (12/31/07)

ACCOUNTS PAYABLEAccounts Payable $ 346,254.92Notes Payable 0.00Taxes Payable 14,499.43Total Accounts Payable $ 360,754.35

ACCRUED INTEREST PAYABLEIRA Certificates $ 10,118.44Regular Certificates 61,749.12Total Accrued Interest $ 71,867.56

OTHER LIABILITIESAccrued Expenses $ 61,457.98Outstanding Checks 263,532.85Other Liabilities -2,792.41Total Other Liabilities $ 322,198.42

MEMBERSHIP EQUITYShare Savings $20,137,685.13Christmas Club 29,108.33Free Checking 1,351,203.52Prime Checking 2,964,841.76IRA Savings 233,647.01IRA Certificates 4,543,093.78Regular Certificates 27,806,788.53Total Membership Equity $57,066,368.06

RESERVESRegular Reserves $ 1,536,891.07Undivided Earnings 7,954,010.84Investment Allowance 47,043.08YTD Net Income 0.00Total Reserves $ 9,537,944.99

TOTAL LIABILITIES AND EQUITY $67,359,133.38

Balance Sheet / Liabilities and Equity – (12/31/07)

Total Membership Equity

Savings 35.34%

Checking 7.56%

IRA 8.37%

Regular Certificates 48.73%

Total Personal Loans

New Car 29.41%

Used Car 32.47%

Signature 9.27%

Credit Cards 3.56%

Mortgage Loans 23.80%

Other Loans 1.49%

Dallas Service Center1100 Commerce Street, #615

Dallas, TX 75242

Farmers Branch Service Center4050 Alpha Road, #120

Farmers Branch, TX 75244

Bedford Service Center4101 Airport Freeway, #141

Bedford, TX 76021

24 Hour Telephone Teller214-413-5588 option 1800-672-1320 option 1

Phone214-413-5588800-672-1320

Fax214-413-5593

Home Loans800-366-6041

MasterCard Customer Service800-299-9842

www.ezcardinfo.com

Emaillibertyone@libertyonecu.com

MISSION STATEMENT

“LibertyOne Credit Union

seeks to be our members

primary financial institution

and will adhere to the

highest ethical standards

while maintaining a sound

financial foundation.”

www.libertyonecu.com