LHCU News - Interoffice Circulation and Bulletin Boards


Dear Friends:

The year 2011 was marked with high volatility not only in the stock market, but also in the bond market and in particular Government securities. As mentioned in previous quarters, federal agencies continue to call their bond issues for redemption on anything yielding above 3.00%. As a result of these early redemptions, we experienced unusual one time capital gains and do not expect a similar situation for 2012. We do however expect the downtrend in interest rates to continue until inflation kicks in and once we see lower unemployment rates. To cover this risk, we have substantially increased our reserves for interest rate fluctuation and for potentially impaired loans. These reserves should cover all future contingencies.

In 2011, the US Government levy for failed corporate credit unions was lower then expected and as such we have provided all members with an extra dividend at year end.

A current trend amongst many credit unions is to expand their field of membership. Many once “employee only” credit unions have re-chartered into public community credit unions. From day one it was our goal and mission to serve only the employees of the Lufthansa “Konzern” and its subsidiaries. We should recognize and be grateful to Lufthansa German Airlines which is sponsoring our credit union with its infrastructure at no cost. Without this ongoing support, we would not have been able to pay triple the savings rates and lower loan rates to active Lufthansa employees and retirees.

We would also like to recognize our volunteer Board of Directors, credit, and supervisory committees all whom render their time and dedication to the credit union without compensation.

On behalf of our Board of Directors, we wish you a happy, healthy, and prosperous new year.

Sincerely,

Franz Herzig
Treasurer