Navy Federal Credit Union 2006 Annual Report Download - page 15

Navy Federal Annual Report 2006 25
Low rates, new products and flexible loan
options continue to attract record numbers
of members to Navy Federal. The Credit
Committee said “yes” to more than 834,000
requests for credit in 2006, a 16% increase over last
year. That resulted in a total of $20.7 billion in
loans, 22% more than in 2005.
More than 511,700 consumer loans were
approved by the Committee for approximately
$6.4 billion. Over half of that volume, a record
$3.4 billion, was issued for 191,000 auto loans.
Navy Federal’s consumer loan portfolio achieved
record net growth of $951 million for the year,
and outstanding balances reached $7.3 billion.
Combined consumer loan limits were raised to
accommodate rising costs for automobiles, boats,
RVs and other items.
We revamped our credit card line, which now
features three rewards cards with unmatched
benefits— nRewardsSM,goRewardsSM and Flagship
RewardsSM, with more choices for gifts, cash back
and travel. Over 214,600 credit card accounts
were approved for $745 million, an increase of
18% in both the number of accounts and volume
over 2005.
Demand for equity loans and lines of credit
continued to grow, with the Committee approving
a record 58,000 loan requests for approximately
$3.8 billion. Over 80% were fixed equity loans.
Loan limits were increased, which resulted in a
higher average loan amount of $60,000.
More than 49,400 mortgage loans, a 22%
increase over 2005, were approved for $11.6
billion. We raised the loan limit
on our popular HomeBuyers
Choice mortgage and introduced
a 40-year term. To improve member
convenience, Navy Federal also
added mortgage staff in branches,
extended evening and weekend hours for tele-
phone applications and reduced loan processing
times.
Throughout its history, Navy Federal has
provided products and services that bring value
to members, thus engendering their trust for
generations. Today, the credit union effectively
manages members’ pooled savings in order to
support the goals of both present and future
generations of borrowers. This strategy is consis-
tent with the Credit Committee’s commitment
to put members first while preserving the safety
and soundness of Navy Federal.
Patricia A. Jackson
Chairman
24
The Supervisory Committee independently
evaluates the soundness of Navy Federal’s
operations and activities in compliance
with the Federal Credit Union Act and Navy
Federal’s bylaws. The Committee helps to ensure
that management protects and safeguards assets by
implementing sound internal controls and by
maintaining practices and procedures that con-
form to generally accepted accounting principles.
The Committee also ensures
that Navy Federal’s audited financial statements
fairly and accurately represent Navy Federal’s
financial condition.
The Supervisory Committee is assisted in
carrying out its responsibilities by the independent
accounting firm of PricewaterhouseCoopers LLP
(PwC). PwC auditors perform quarterly audit
procedures and a comprehensive end-of-year audit
of Navy Federal’s financial condition. The results
of these audits are reflected in their Report of
Independent Auditors, which appears in this
Annual Report.
The National Credit Union Administration
(NCUA), the regulatory agency for all federally-
chartered credit unions, performs periodic super-
visory examinations. The results of the NCUA
2006 examination confirm that Navy Federal
continues to be financially strong and a leader in
the credit union movement. No significant areas
of concern were identified in the 2006 examination,
and Navy Federal was proud to again receive
NCUA’s highest rating.
The Supervisory Committee also provides an
avenue of open communication for you, the mem-
bers of Navy Federal, and acts as your ombudsman.
The Committee reviews and responds, in writing,
to all letters and e-mails it receives from Navy
Federal members. Both the membership and the
management of Navy Federal benefit from this
open communication because your individual
concerns are addressed on a personal basis, and
your comments help to ensure that Navy Federal
maintains the highest level of member service.
Based on the results of the Examination
Report of NCUA, the quarterly audit procedures
and the Report of Independent Auditors, it is
the opinion of the Supervisory Committee that
Navy Federal continues to be in a strong finan-
cial condition. The Committee can also assure
you that the policies, programs and management
practices of your credit union are sound and
are effectively administered, and that your
Supervisory Committee, the management and
the staff of Navy Federal will continue to provide
world-class service to each and every member.
Michael C. Wholley
Chairman
(clockwise)
Patricia A. Jackson,
Chairman
REPORT FROM
THE CREDIT COMMITTEE
REPORT FROM
THE SUPERVISORY COMMITTTEE
(clockwise)
Michael C. Wholley,
Chairman
Bennie O. Pearce
Vernon Hutton III
Joe R. Campa Jr.
Edward R. Cochrane Jr.
Kenneth R. Burns
Jerry W. Turner
Joan C. Cox
2006 Loan Approvals
# Approved % Change $ Approved
Dollars in millions % Change
Consumer 511,738 15.9% $6,384.2 18.9%
Mortgage 49,436 21.7% $11,636.2 32.4%
Equity 58,474 8.3% $3,809.1 15.0%
Credit Cards 214,603 18.0% $745.1 18.3%