2008 Annual Report

2008 REPORT TO THE MEMBERSHIP

Patriot Federal Credit Union had a successful and eventful year as we grappled with a turbulent and difficult economic climate in 2008. We saw unprecedented turmoil in the financial markets that has not been witnessed since the 1930s. Patriot fared well, however, as consumers recognized credit unions as a better financial institution alternative, your credit union remained committed to the conservative principles that are our heritage and your security.

Financial Performance:

Patriot continued to grow, exceeding $400 million in assets. Total assets reached an all time high of $402,822,193, as of December 31, 2008, representing a 4.5% increase over the previous year. Through prudent management of expenses and share and loan rates, the credit union attained a strong capital to asset position of 12.37%, by year end. In addition to Patriot's strong capital position and required reserves maintained by the credit union, members' funds are protected by the National Credit Union Share Insurance Fund, an agency of the Federal Government.

Certified financial statements for the years ending September 30, 2007, and September 30, 2008, were provided by Patriot's independent auditing firm, Orth, Chakler, Murnane and Company, Certified Public Accountants.

Community Support:

Patriot continued to remain a strong presence in the communities we serve and in the spirit of the credit union philosophy of "People-Helping-People®," we supported many charitable and worthwhile organizations throughout its community charter area.

To help in the fight to stamp out homelessness and substandard housing, Patriot contributed to Habitat for Humanity in both Franklin and Washington Counties. The credit union's contribution was used to help build homes for local families in need.

We supported the local American Cancer Society's Relay for Life event. The Relay for Life event celebrates survivorship and raises money for research. Patriot is proud to support a cause which touches the lives of so many.

The American Heart Association is dedicated to finding ways of curing and preventing the number 1 killer in America; cardiovascular disease. Patriot participated as a sponsor in the association's signature event, the Heart Walk. The local event promotes physical activity and heart healthy living in a family environment.

The credit union also played a part in granting the wishes of seriously ill children by contributing to the Make-A-Wish Foundation. Whether it's a day at Disney Land, or meeting a famous celebrity, Make-A-Wish, makes it happen!

Patriot's contribution to the Chambersburg Meals on Wheels program helped pay for the home delivery of meals to local senior citizens who are unable to purchase or prepare their own meals

Patriot supported the Pennsylvania Free Enterprise Week. PFEW is a program that heightens the awareness of Pennsylvania's youth about their future role in the American free enterprise system. Inspirational speakers address key topics, concerning all aspects of business, and provide quality learning opportunities that promote the understanding of the link between personal freedom and economic opportunity.

Patriot and our employees combined efforts to contribute a total of nearly $6,000 to United Way Agencies in Franklin and Washington Counties. Contributions flow directly into local communities to fund programs that help children and youth succeed, and strengthen and support families. Their programs provide early education for children, parenting classes, substance abuse support, teen pregnancy support, access to health and wellness initiatives, and economic self support initiatives.

Patriot was the major presenting sponsor for Celebrate the Arts at Old Market Day during ChambersFest. This event drove over 10,000 people to Downtown Chambersburg, PA, and provided Patriot with the opportunity to promote the advantages of credit union membership to the community and beyond.

Member Education:

Several educational seminars were conducted, at no charge to the member, as part of our continuing efforts to keep members informed on a variety of consumer topics.

Understanding Your Credit Score Seminar - This popular seminar helped members understand how a credit score is determined and how it affects the consumer's buying power.
Home Buying Seminar - Among other things, members learned how much house they could afford, and how to qualify for a mortgage.
Auto Buying Seminar - This seminar taught members how to negotiate the best vehicle price and understand financing options and warranties.
AARP Driver Safety Program - Patriot hosted and sponsored the AARP Driver Safety Program for drivers age 50 and over. Participants in this eight hour refresher course learned defensive driving skills, new traffic laws, and rules of the road. Upon completion of the course, many graduates were eligible to receive a discount on their vehicle insurance premium.

These no-cost seminars and the accompanying educational materials represent additional advantages of membership at Patriot Federal Credit Union.

Scholarships:

Patriot's ongoing commitment to members and community took shape in the form of several scholarship offerings in 2008. Patriot offered a scholarship for the Chambersburg Chamber of Commerce and the Washington County Chamber of Commerce Leadership Development Programs. The goal of these scholarships is to develop first rate community leaders. Patriot also awarded a $2,500 scholarship award to Ryan Coccagna, a graduating senior of Chambersburg Area Senior High School and a credit union member. Ryan enrolled in St. Francis University to pursue a degree in accounting. This memorial scholarship was established in honor of Richard E. Baumunk, a past board member and original founder of the credit union.

Expansion and New or Enhanced Products, Services and Benefits:

In 2008, Patriot expanded its capabilities and boosted its productivity, and in the process assisted current and potential members in new and better ways.

E-SMART Pay - Patriot introduced a new and improved bill pay service called e-SMART Pay. The service is free and can be accessed from Patriot's website. E-SMART Pay gives you the security and convenience to pay anyone with a mailing address, from your accountant to your plumber. With just one password to remember, you have the option to pay one-time payments, or to plan recurring payments anytime you wish, 24/7.
Increased Share Coverage - The National Credit Union Administration (NCUA) was able to provide even more peace of mind for credit union members when they increased share insurance coverage on members' funds from $100,000 to $250,000.
SMARTLine Added Security - In its quest to provide you with the safest and most secure services, Patriot added a layered pass code system for your audio voice response service. This action provided members with stronger controls in the authentication and log-in process.
Expanded Branch Service - The 26,000 square foot addition and renovation of Patriot's main branch office, located at 800 Wayne Avenue, in Chambersburg, PA, was completed in 2008. The expansion project provided your credit union with twice as much space to serve an expanding membership. The drive up, located at the rear of the Corporate Center, was expanded from six to eight lanes and includes two, new state-of-the-art SMART ATMs.Members are enjoying the added convenience and safer traffic patterns provided by the relocated drive up facilities.
ATM Growth - Patriot installed a SMART ATM at 90 West Queen Street in Chambersburg near Patriot's Federal Street Branch Office. The technology of this new, state-of-the-art ATM takes convenience and safety to a higher level than ever before. Members receive instant acknowledgement of their cash and check deposits, and are given faster availability to their funds. Your credit union currently offers members access to 15 Patriot-owned ATMs in Franklin County, Fulton County and Washington County.

Safe - Sound - Strong

Patriot Federal Credit Union is safe, sound, and strong.

That's our commitment to you!