C H A R T E R O A K F E D E R A L C R E D I T U N I O N

ANNUAL REPORT
07
C H A R T E R O A K F E D E R A L C R E D I T U N I O N

T HE C HAIRMAN’ S R EPORT
C HARTER O AK F EDERAL C REDIT U NION | ANNUAL R EPORT 2007
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The purpose of an annual
report is to keep our
members fully informed.
Upon reading this year’s
report you will be able to
take a step back and
review what transpired in
2007 and catch a glimpse
of what is being planned
for 2008 and beyond.
Pierre Brochu
Chairman of the Board Throughout 2007 your
Credit Union continued to prosper. Assets grew to
just under $580 million and we expanded and
improved our infrastructure. In September our
beautiful new Niantic office opened. Located at 335
Main Street, the branch offers five drive-up lanes, an
Internet café, two ATMs and even a walk-up remote
teller window. Anyone visiting this office will quickly
see that we went to great lengths to provide
members with state-of-the-art technology. Visitors
will also notice that we continue to provide, as
always, first class personal service.
During the Fall of 2007 we began construction of a
new Norwich office. This office will be located at One
Connecticut Avenue. It will be directly across the
street from our current location at the entrance to the
Norwich Industrial Park. We expect this full service
facility to open in the Fall of 2008. Just like the
Niantic office, this one will be filled with time saving
technology. Of course, once this beautiful office has
opened, members will continue to enjoy more of
the first class personal service Charter Oak is
renowned for.
During 2007 we executed a lease for property
located at 601 Norwich/New London Turnpike in the
Uncasville section of Montville. We expect to open
this new facility in June 2008, after completely
renovating the site. Members in Montville will
appreciate the convenience of this office as it is
located in the Midway Shopping Center adjacent to
Beit Brothers Supermarket and Rite Aid Pharmacy
on Route 32.
We also entered into a new lease in late 2007 which
resulted in our Willimantic office being relocated. In
March 2008 we moved into 893 Main Street. In the
heart of downtown, this office is double the size of
our old location. We expect to see increases in the
number of accounts opened and lobby activity as a
result of the foot traffic in the business district. A
substantial portion of the population in Willimantic is
Hispanic. To better service this segment of the
population all of our staff members are bi-lingual. In
addition, our signage and brochures are available in
both Spanish and English.
Niantic Office

Y OUR C REDIT U NION
Adults Taking Charge Of Their Financial Future.”
Fitch students helped to market the office. They
created posters and other collateral material to
spread the word that Charter Oak was coming! As
this new venture gets underway, we look forward to
creating lasting relationships with these young adults.
We recognize that today’s youth
represent the members
of tomorrow.
Senior Staff: Clint Bramlett, Richard W. Stout Jr., Patricia Lima,
Bradley Sullivan, Brian Orenstein
In October of 2007 Charter Oak signed a three year
partnership agreement with the Groton School
System. In April 2008 we cut the ribbon to celebrate
opening our first in-school branch. Located at Fitch
High School, this branch will offer a special array of
services designed exclusively for students. The faculty
and administrators at the school will have access to
this office as well. All will certainly welcome the
opportunity to conduct business where they work.
Some further elaboration on the Fitch branch is
appropriate given the significance of this
undertaking. No one can deny the importance of
teaching young adults the “facts of life” when it
comes to managing money and establishing credit.
Yet, far too often, frank discussions on these
important topics somehow are overlooked.
Collaborating with educators, your Credit Union is
endeavoring to increase the knowledge of young
adults. The objective of an in-school branch is to give
young adults the opportunity to learn to save and
manage a checking account while establishing credit
prior to graduation. Credit Union employees helped
to establish the curriculum that will be used by the
students. The students created a program name and
tag line. The name chosen for this initiative is
“Focused On Finances”. The tag line is “Young
As you have come to
expect and
appreciate, the Credit
Union continued to
make huge investments
in technology throughout
the past year. These
investments not only make it
easier for you to conduct your
business, they also make it
safer. Multifactor authentication was launched early in
2007 for both home banking and on-line bill
payment. Last year we increased spending on
member education. More than anything else,
education has proven to be the best way to help
members guard against fraud, Internet scams and
the perils of identity theft. During the new year we
will intensify our anti-fraud outreach initiatives aimed
at seniors. This group has historically been victimized
by fraudsters more than other groups. Outreach
efforts will include conducting lectures at senior
centers and holding group meetings with video
presentations at senior housing complexes.
Protecting your privacy and identity remains one of
our top priorities. Members can be assured that we
shall continue our efforts to stay ahead of the
schemes and ploys of cyber felons.
C HARTER O AK F EDERAL C REDIT U NION | ANNUAL R EPORT 2007
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A CHANGE IN L EADERSHIP
C HARTER O AK F EDERAL C REDIT U NION | ANNUAL R EPORT 2007
Brian A. Orenstein was
named Chief Executive
Officer in September 2007.
He is replacing Larry K.
Hertell. Brian joined the
Credit Union in 2004 as
Senior Vice President and
Chief Financial Officer. He
came to Charter Oak with
Brian A. Orenstein 22 years of experience in
CEO
the financial services
industry. He is well qualified to lead your credit union
into the future.
In December 2007 Bradley Sullivan joined Charter
Oak. He became the Credit Union’s Chief Financial
Officer. Like his predecessor, Brad comes with many
years of experience and a diverse background. The
Chief Financial Officer at Charter Oak is a critical
position. The incumbent is charged with
responsibilities that include leading the Credit
Union’s Asset Liability Committee, managing the
investment portfolio and overseeing the general
financial health of your Credit Union.
Larry K. Hertell had been the Chief Executive Officer
of the Credit Union for the past 15 years. The Credit
Union grew exponentially during his tenure. The
Board and entire staff extend to him the very best of
luck in the years ahead.
C ONTINUED C OMMITMENT
TO OUR C OMMUNITY
All of our directors and employees are committed to
the philosophy of giving back to the community. This
commitment goes beyond the brick and mortar that
make up our offices. It also goes beyond our staff’s
desire to deliver first-class personal service. In fact,
here at Charter Oak one has the sense that a grass
roots movement has been adopted by all. Consider
some of last year’s accomplishments.
In total, Credit Union employees raised over $111,000
to support neighbors in need. The United Way and
American Diabetes Association were among the
recipients of the staff’s generosity. Non-cash donations
were also made in the form of back packs, canned
food, clothing and toys. In fact, our employees even
donated over one hundred pints of blood in response
to pleas made by the American Red Cross.
During 2007 Charter Oak received the Gold Employee
Campaign Performance Award from The United Way.
Also bestowed was the Outstanding Achievement
Award from the American Diabetes Association and
The Dish and Assist Award presented by the
Connecticut Sun, our local women’s professional
basketball team.
Pictured: Pierre Brochu, Asjha Jones, Cathie Forier
It has long been a tradition at Charter Oak to allow
employees to participate in fund raisers during work
hours. When they do volunteer work during business
hours, they receive full pay. There are also countless
hours donated by employees after work. It is the
employees’ commitment, coupled with your Credit
Union’s benevolence, which combine to help make
our community a better place to live.
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T HE P ROMISE OF 2008
The need for different and innovative products and
delivery channels continues to evolve. Charter Oak
adheres to the philosophy that one size does not fit
all. Some members seldom come into their local
branch. Instead, they prefer to utilize direct deposit,
ATMs, internet banking and electronic bill pay. These
members even opt to receive their statements
electronically. There are other members however,
who are traditionalists. As such, they look forward to
visiting their local branch. They like one-on-one
personal contact and enjoy receiving first class
personal service face to face. Typically members in
this group also prefer to receive statements the
traditional way; through the U.S. mail. In today’s
competitive environment, we strive to meet the
needs of these different minded members as well as
those who desire something in between.
The evolution of financial products is an endless
process. This evolution has led to the introduction of
the Health Saving Account or HSA. It is an interest
bearing checking account designed for those who
are self employed or those who are participants in a
high deductible health insurance plan where they
work. This terrific account is much like a 401(k).
Contributions are limited annually and indexed to
keep pace with rising health care costs. Contributions
are tax exempt. Over time, contributions accumulate
thus helping individuals and families better manage
their medical and dental expenses. Experts have
projected that millions of Americans will open HSAs
in the future. Your Credit Union is ready now to
accommodate members who wish to take advantage
of an HSA.
As we move into mid-year 2008, a systematic
evaluation of member satisfaction levels will be
undertaken. By way of focus groups, individual
interviews and questionnaires we will solicit your
feedback. We undertake satisfaction surveys because
we endeavor to ensure what you want, is what we
deliver. We also conduct surveys to ensure that we
consistently deliver first class personal service. We
will react to your comments! We want to be the
financial institution of choice in Eastern Connecticut!
Throughout the upcoming year we will continue our
long standing partnership with MEMBERS Financial
Services. A licensed MEMBERS representative is
located at our Chicago Avenue office. His name is
Steve Sylvester. He is available to meet with
members before, during and after normal business
hours to discuss wealth management, retirement,
investment and estate matters. If you are
contemplating retirement, we encourage you to
schedule a no cost and no obligation meeting with
Steve. You’ll be glad you did!
Insurance products such as homeowners, automobile,
umbrella and business coverage are available to both
members and non-members through our subsidiary,
The Insurance Professionals. As we enter our fourth
year of owning this company, hundreds of members
have saved many thousands of dollars by purchasing
protection from The Insurance Professionals. It is
interesting to note that in many instances, members’
premiums have been reduced while their coverage
has increased! Charter Oak has truly evolved into a
full service, one stop financial supermarket. Isn’t it
delightful knowing, that as a member, you receive
state-of-the-art technology, favorable pricing and first
class personal service?
C HARTER O AK F EDERAL C REDIT U NION | ANNUAL R EPORT 2007
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T HE P ROMISE OF 2008
To Conclude
We close out this annual report with a promise. Your
Credit Union will forever be that; your Credit Union.
We urge you, and indeed beseech you, to tell your
family, friends and neighbors about Charter Oak.
Like any financial institution, we need new members
to grow.
To each member we wish to extend a sincere thank
you. We appreciate that you have selected us to be
your financial partner. Without you we have no
purpose, no mission, indeed, no Credit Union.
Together, we shall forge ahead to create a better
tomorrow for you and our community.
God bless America!
Thank You!
C HARTER O AK F EDERAL C REDIT U NION | ANNUAL R EPORT 2007
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S TATEMENT OF F INANCIAL C ONDITION
Condensed Financial Highlights
2007 2006
Cash and Other Assets $ 20,613,236 $ 19,060,488
Loans to Members, Net 506,427,039 455,070,799
Investments 52,833,517 52,429,644
Total Assets $ 579,873,792 $ 526,560,931
Members' Shares and Savings $ 423,142,385 $ 417,207,617
Members' Equity 68,177,297 64,337,183
Other Liabilities 88,554,110 45,016,131
Total Liabilities and Equity $ 579,873,792 $ 526,560,931
Income $ 40,314,507 $ 34,503,853
Interest Expense 14,608,654 9,857,301
Operating Expenses and
Provisions for Loan Losses 22,051,887 19,172,997
Net Income $ 3,653,966 $ 5,473,555
Net Worth Ratio
Our net worth ratio continues to remain strong, which exemplifies a safe and healthy credit union.
This ratio was 11.76% at year-end 2007. The Net Worth Ratio is a key measurement of a financial
institutions' strength.
C HARTER O AK F EDERAL C REDIT U NION | ANNUAL R EPORT 2007
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C ONVENIENT O FFICE L OCATIONS
32 Chicago Avenue
Groton, CT
335 Main St.
Niantic, CT
20 Liberty Street
Pawcatuck, CT
238 West Town Street
Norwich, CT
(Moving to One Connecticut Ave in Fall ‘08)
625 Long Hill Road
Groton, CT
893 Main Street
Willimantic, CT
589 Hartford Pike
Dayville, CT
Fitch High School
Groton, CT
3 Boston Post Road
Waterford, CT
601 Norwich/New London Turnpike
Montville,CT
860.446.8085
charteroak.org