January 30, 2012

Dear UW Credit Union Members,

UW Credit Union was founded in 1931 by members of the University community who wanted a safe, convenient place to save and borrow money at reasonable rates. From our humble beginnings, the assets of the credit union have grown steadily and now exceed $1.4 billion, placing us among the largest credit unions in Wisconsin. Throughout the years, the values and principles of thrift have remained a part of our culture. We remain committed to our cooperative business mission and the credit unions' guiding principle of putting the best interest of our members first.

During these difficult economic times, we want to assure you that UW Credit Union is exceptionally strong and well positioned to serve you.

• We are very well capitalized. Over the past five years, we've boosted our capital position from over $84 million to $128.8 million. At year end, our net worth to assets ratio stood at 8.9%, well above the regulator's "well capitalized" level of 7.0%. Today we hold over $29 million more in capital (or 28.8% more) than the amount our regulators require for their top "well capitalized" rating of financial strength.
• We take a cautious approach in the quality and marketability of our investment securities, as well as the investments and deposits we maintain in other federally regulated financial institutions. Our approach continues to put safety and soundness first when making decisions about our balance sheet assets. We hold no investments denominated in foreign currencies, or backed by foreign governments.
• Our prudent lending practices are based on the fundamental principle of acting in the members' best interests. As a result, our loan portfolio does not contain exotic adjustable rate mortgages and other types of subprime mortgages that are currently causing concerns for many consumers. UW Credit Union has not originated mortgage loans through brokers or other third parties. Our mortgage loan portfolio reflects our own underwriting and the credit quality of our membership. This is reflected in continued low loan delinquencies. As of December 31, 2011, loans delinquent in payments, as a percent of total loans, was 1.40%, well below the 4.22% delinquent loan bank average most recently reported by the FDIC.
• UW Credit Union posted positive earnings for 2009, 2010 and 2011. These earnings are added to capital reserves to maintain financial strength.
• With ample liquidity available, we continue to make consumer and mortgage credit available to our members with over $966 million in new loans granted in 2011.
• Deposits in UW Credit Union are Federally insured up to $250,000 by the National Credit Union Administration and the National Credit Union Share Insurance Fund. This fund is backed by the full faith and credit of the United States Government.

Sincerely,

Paul Kundert
President & CEO