REED CREDIT UNION ANNUAL MEETING CHAIRMAN’S REPORT MARCH 25, 2012

Good afternoon.

My name is Carlos Uresti and I am honored to serve as Chairman of Reed Credit Union. I’d like to take a moment and introduce the other members of your credit union’s board of directors.

Thanks to each of you for your service. As you probably know already, your board of directors serves voluntarily and we are not compensated for this service. That’s yet another difference between credit unions and banks! And it’s an important one. Like you, each of us is a member of Reed Credit Union. We have our savings here. We have loans here. And we have a vested interest in overseeing this financial institution. We take that responsibility seriously. It is our fiduciary responsibility to you to make sure we are establishing strong, clear policies that direct the management and staff in their day-to-day operations. We receive periodic training and frequent regulatory updates to ensure we have the knowledge to uphold our duties on your behalf, particularly in the wake of an avalanche of new regulations as a result of the Wall Street meltdown. But our duty is also to uphold the mission and values of Reed Credit Union. In this high speed, high tech world, it would be easy to lose our direction. Even as our credit union seeks to offer more convenience to the members, we must never lose track of our core mission: which is to serve people.

I’d like to think that our “people helping people” philosophy and mission contributed to the mass influx of new credit union members this past fall. We are not-for-profit financial cooperatives focused on our members…real people with real needs. That mission obviously has begun to make sense to a huge number of people. While they initially may have abandoned their bank because of ridiculous fees on their debit or credit cards, it is our job as members of a credit union to help them understand that credit union membership means more than simply lower fees.

We need to continuously point out the credit union difference: Not-for-Profit

Credit unions are not-for-profit financial cooperatives. We exist to serve our members, not to make a profit. Unlike most other financial institutions, credit unions do not issue stock or pay dividends to outside stockholders. Instead, earnings are returned to our members in the form of lower loan rates, higher interest on deposits, and lower fees.

Ownership Credit unions are economic democracy. Each credit union member has equal ownership and one vote -regardless of how much money a member has on deposit. At a credit union, every customer is both a member and an owner. Volunteer Boards Each credit union is governed by a board of directors, elected by and from the credit union's membership. Board members serve voluntarily.

Membership Eligibility By current federal statute, credit unions cannot serve the general public. People qualify for a credit union membership through their employer, organizational affiliation like churches or social groups, or by geographic proximity. Financial Education for Members Credit unions assist members to become better-educated consumers of financial services. Additionally, CUNA is partnering with the National Endowment for Financial Education, a not-for-profit foundation, to expand financial education among high school students. A national study shows that just ten hours of personal finance education can positively affect students' spending and savings habits for a lifetime. Social Purpose Credit unions exist to help people, not make a profit. Our goal is to serve all members well, including those of modest means -every member counts. Our members are fiercely loyal for this reason. They know their credit union will be there for them in bad times, as well as good.

We have a mission to serve and to help more people realize the American dream.

The fact that you are here today shows me you, too, have a vested interest in the future of this credit union and its mission. With 2012 being the Year of Cooperatives, we credit union members have an opportunity to build on the momentum of Bank Transfer Day to educate our families, friends, colleagues and neighbors about what it means to be a member of a not-for-profit cooperative credit union.

Well known publications have also taken notice of the consumer shift to credit unions as they reported as recently as this month. For example, CNN Money reported that credit unions added 1.3 million new customers in 2011, bringing total credit union membership to 91.8 million. The Christian Science Monitor, in an article titled “Why Credit Unions and Small Businesses are Beating Out Big Banks”, reported that credit unions now have $1 trillion in assets. A survey by Bankrate.com released this month shows that more consumers believe that credit unions are safer than big banks – 40% versus 34%. And U.S News and World Report says that consumers seeking free checking are now switching to credit unions, community banks, and online banks from big banks.

Reed Credit Union is well positioned to be your primary financial service provider. We offer a wide array of services including:

• savings

• share drafts

• loans

• CDs

• Retirement accounts

• Youth accounts

• Field of membership expansion to include any affiliation to NOV or several other small business within the general vicinity of our main office

• Financial planning

In other words, we can do what a bank does, but we do it better because our credit union is not out to nickel and dime our members in order to maximize profits. Rather, our credit union seeks to find the right mix of products and services to help us succeed. Most importantly, we must help those around us understand that being part of the credit union means you are treated as a person. We are not faceless numbers – viewed as potential profit centers to boost a bank’s stock value. We are owners. Whether we have $25 or $25,000 in our account, each of us has a voice to choose our leadership and drive the decisions that affect our money. These are important differences that keep credit unions accountable to the people we serve. Not to an anonymous group of big-money investors. At the end of the day the only investors we have to satisfy are our members -you and me.

Our credit union’s management and staff has done an excellent job of helping the credit union emerge from the tough recession and being accountable to the highest standards demanded by our membership and board of directors. Please join me in thanking Dorothy and her entire team for all their work and for taking care of our resources. And thanks to all of you for taking the time to be involved in your credit union. Here’s to a successful year ahead for you, your family, your business, and the credit union