BOARD OF DIRECTORS MANAGEMENT TEAM AND TERMS OF EXPIRATION Harriet May Manuel R. Ybarra President/CEO March 2010 Chairman of the Board Rudolf Kuehne Senior Vice President Gregory J. Watters Information Technology March 2012 Vice Chairman Crystal Long Senior Vice President Frank Garcia Consumer Loans and March 2011 Remote Services Secretary/Treasurer Steven G. Lutz Yolanda M. Estrada Senior Vice President March 2010 Chief Financial Officer Assistant Secretary/Treasurer Sarah E. Newman-Altamirano Senior Vice President John Fernandez General Counsel March 2010 Musette Bracher Annie Koch Vice President March 2011 Marketing Jose I. Quiñonez, Jr. Ceci Davila March 2012 Vice President Sales and Service Operations ADVISORY MEMBERS Barbara Franco Daniel Anchondo Vice President Internal Audit Guadalupe Giner Arturo Moreno Elizabeth Hill Vice President Business Services Janie Shockley AUDIT COMMITTEE Vice President Human Resources Gregory J. Watters Chairman Frank Garcia Ricardo Soto moving forward . 1 board of directors . 2 chairman’s message . 3 president’s message . 4 GECU lending in 2009 . 5 audit committee report . 6 return to members . 7 distribution of earnings . 7 statements of financial condition . 8 statements of income . 9 mIf everoyonve is ing forward together, then success takes care of itself. – Henry Ford 1 GECU (left to right, front to back) Yolanda M. Estrada - Assistant Secretary/Treasurer Jose I. Quiñonez Jr. Gregory J. Watters - Vice Chairman Manuel R. Ybarra - Chairman of the Board Elizabeth Hill Frank Garcia - Secretary/Treasurer John Fernandez Annie Koch (not pictured) Daniel Anchondo Guadalupe Giner 2 CHAIRMAN’S The year 2009, was a most difficult one. We expected direction to a large and complex credit union to ensure it. In my report last March, I mentioned that we faced a a safe and sound operation and service quality that is in rough road in 2009, as the full effects of the economic the best interest of you, the members. A professional crisis would be felt in El Paso. We prepared for it. And, management staff follows that direction in day-to-day although not like that we have experienced in exceedingly operations. You elect directors who are not paid employees. good times, we had reasonable net income from operations Credit union regulators have high expectations of us. despite the economic downturn in El Paso. Net income from In 2009, your board of directors made some significant operations, however was severely reduced by extraordinary changes that were designed to ensure good governance in contributions to the funds that we must reserve against a complex business environment, for an equally complex losses from uncollectable loans and from investments credit union that is the largest locally owned financial once considered top quality, but which deteriorated with the institution in El Paso. We modified GECU’s bylaws, widespread mortgage-backed investments crisis. Our net approved by the Texas Credit Union Department, effective operating income was further reduced by assessments April 7 to reduce the number of directors from nine to seven, placed on credit unions by the National Credit Union as Director Luis Mata’s position was declared vacant due Administration, our national regulator, due to the losses to the lack of required attendance and Harriet May resigned at corporate credit unions that provide investment and as a director but remains President/CEO. This change other services to credit unions like ours. enforces a governance principle that a board of directors be Your credit union did not despair. GECU, owned by independent of management in directing the general affairs 288,588 members, is solid as a rock. We have been here of the credit union. This change required amendments to for 77 years and plan to be around for another 77. You can parts of the bylaws to: 1) govern the conduct of meetings; rest assured that your money is safe and that we continue 2) prohibit directors or their immediate family from paid to lend money. At the close of 2009, GECU had $1.6 billion employment at the credit union; 3) define participation of in assets. We used the $1.5 billion in deposits of our the President/CEO at director meetings; 4) establish members for net loans of $1.3 billion, a testament to the potential suspension of a director when a director’s conduct credit union philosophy of our founders of “not for charity, is a threat to the safety and soundness of the credit union not for profit, but for service.” A true example of people or the director’s fiduciary duty to the credit union; 5) govern helping people. The reductions to our net income from the board’s executive committee; and 6) prohibit the operations required GECU to tap its rainy day capital fund, President/CEO from being a director. In addition, your which is there for times such as those we experienced in board confirmed a bylaw change recognizing the Operations 2009. Your credit union is well positioned to absorb those Center as GECU’s headquarters. losses and it continues to be well capitalized. Finally, I recognize that the financial road that our Your credit union’s management and employees, country has traveled in the last two years and that of led by President and Chief Executive Officer Harriet May, economic hard times traveled in El Paso are still rough. continue to make sacrifices, foregoing salary increases and However, you can be confident that your credit union will bonuses and the inconvenience of doing more with less to continue moving forward despite those bumps in the road. continue to provide quality services that you, the members, Your credit union is rock solid. Your money is safe. Your demand. They recognize that these are difficult economic credit union is dedicated to helping you meet your financial times. Most importantly, they understand that GECU must goals and fulfilling the credit union philosophy of “not for move forward with operations that are safe and sound, and charity, not for profit, but for service.” that the decisions made are in the best interest of you, the members. This is dedication. Let me say a few words about governance. This member -owned financial institution has continued to grow in assets and complexity of operations from its humble beginnings in 1932. Those days when directors approved Manuel R. Ybarra Chairman of the Board individual loans and rates for simple savings directly are long gone. Your board of directors provides the strategic 3 PRESIDENT’S Despite the economic challenges El Paso faced in 2009 champion winning $10,000, with runners-up 2009, I’m pleased to report that GECU continued to receiving $2,500 each. This year’s contestants did grow and improve the financial lives of our members. an outstanding job, collectively reducing their debt Challenges are nothing new to your credit union, by $24,689 and saving $20,520. particularly during difficult times. How we turn those challenges into opportunities and accomplishments I Financial Education is how we move forward. GECU continued to reach out to El Pasoans wanting In a year marked by a stagnant economy, layoffs information and tools to help them become financially and downsizing throughout the city, GECU ended the secure. Over 2,000 people attended free seminars year on a positive note with over 288,000 members, throughout the year on topics including: budgeting, $1.6 billion in assets, $1.5 billion in deposits and a credit responsibility, financial education and strong net worth of 7.4%. When other financial institutions homeownership. were facing foreclosures, cutbacks or had all but stopped lending money, GECU was open for business making over I SmartBranch $639.8 million in loans to members and El Paso Upgrades to GECU’s website, including FinanceWorks TM , businesses. This wasn’t the year to bury our heads in Email, Online Chat and Business Cash Management, the sand, to wait and see what would happen. With made it easier for members to manage their accounts, money to lend to our members and the business handle their finances and pay their bills from their community, GECU wanted to be part of the solution, personal computer. not the problem. We continued to make mortgage, home equity, vehicle and business loans at a time when they I GECU Socorro Branch were needed most – to put El Paso’s economy and our Opened in May 2009, in a traditionally underserved members’ financial quality of life back on track. As a area , GECU’s newest branch received an enthusiastic result, we increased our loan portfolio by $70.5 million response from the community, ending the year with (5.6%) with an 89.0% loan to deposit ratio. GECU $1.54 million in deposits and $1.69 million in loans. was living up to the credit union mission of people helping people. Long time GECU employee, Fermin Acosta Jr., Senior While we worked hard to grow deposits and loans, Vice President of Administrative Services, retired on we also focused our efforts on improving your access December 1, 2009, after 39 years of service to GECU. to GECU’s products, services and financial education Fermin has long been a champion of the credit union seminars. Some of these highlights include: movement helping countless members with solutions to their financial challenges. We appreciate his dedication I En d- of-Year Car Loan Sale to GECU. GECU wishes him the very best in his future. The Parking Lot Pre-approval Party contributed to the GECU’s success wasn’t a solo effort; it was your success of GECU’s End-of-Year Car Loan Sale. The success, too. This success depends on the trust you parking lot event, held in December at the Operations have in us to serve your financial needs and our Center together with El Paso auto dealers, provided dedication to be good stewards of your money.