2 0 0 6 A N N U A L R E P O R TP.O. Box 1937 Portland, Oregon 97207-1937

503-227-5571 + 1-800-452-0900 + www.unitusccu.com

Your savings federally insured to at least $100,000 and backedby the full faith and credit of the United States Government

National Credit Union Administration, a U.S. Government Agency

Federally Insured by NCUA

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SupervisoryCommittee

Don ForemanChairman

Dan Duffy

Ray Anderson

Matt Goodwin

he summarized financial statement in-formation included in this annual report

was prepared by Unitus Community CreditUnion management and compiled from theCredit Union’s consolidated financial state-ments.

In preparing the financial statements,management depends upon the CreditUnion’s system of internal accounting con-trols in meeting its responsibility for reliableinformation. The Supervisory Committee,which consists of four volunteer membersappointed by the Board of Directors, moni-tors the accounting system on behalf of allUnitus members.

The Committee meets periodically withthe Board of Directors, the Chief InternalAuditor, and management to discuss ac-counting, financial reporting, internal con-trol systems and processes, and auditingmatters.

As part of fulfilling its duties, the Com-mittee engaged the independent account-ing firm Moss Adams LLP to conduct the2006 audit of the Credit Union and providean opinion of the financial statements as awhole. A copy of the certified audit report isavailable for review by interested membersupon request.

The audit substantiated the solid finan-cial performance of the Credit Union andaffirmed the operational practices of man-agement. It also offers definitive evidencethat the membership’s assets are secure. Itis the Committee’s opinion that the CreditUnion’s day-by-day practices remain in com-pliance with the Credit Union bylaws, stateand federal regulations, and acceptable ac-counting procedures.

Also under the direction of the CommitteeMoss Adams LLP managed the 2006 verifica-tion of members’ accounts. The outcome of thisaudit further substantiates the responsible fi-nancial operation of the Credit Union.

My thanks is extended to Committee mem-bers for their time and energy given during thepast year. We look forward to serving the Unitusmembership in 2007.

R E P O R T O F T H E S U P E R V I S O R Y C O M M I T T E E

T

I N D E P E N D E N TA U D I TO R ’ S R E P O R T

It is the Committee’sopinion that theCredit Union’s

day-by-day prac-tices remain in

compliance withthe Credit Union

bylaws, stateand federalregulations,

and acceptableaccountingprocedures.

To the Board of Directorsand Supervisory CommitteeUnitus Community Credit UnionPortland, Oregon

We have audited, in accordance with auditingstandards generally accepted in the UnitedStates of America, the consolidated statementsof financial condition of Unitus CommunityCredit Union and subsidiary as of December 31,2006 and 2005, and the related consolidatedstatements of income, members’ equity, andcash flows (not presented herein) for the yearsthen ended; and in our report dated February 23,2007, we expressed an unqualified opinion onthose consolidated financial statements.

In our opinion, the information set forth inthe accompanying condensed consolidated fi-nancial statements is fairly stated, in all materialrespects, in relation to the consolidated financialstatements from which it has been derived.

Moss Adams LLPSpokane, WashingtonFebruary 23, 2007

1937 Oregon Telephone Employee‘s Credit Unionformed July 7,1937

1942 Real Estate Loans introduced

1968 $10 million in assets

1972 Employees of Oregon’s independent telephonecompanies eligible to join

1973 Name changed to Oregon Telco Credit Union

1976 Moved to the newly built Oregon Telco Building

1982 Checking Accounts introduced

1983 ATM Card introduced

1984 $100 million in assets

1985 Wholly owned CUSO opened, offering insuranceand travel agency services

1986 Debit & Credit Cards introducedOregon Telco spearheads “Credit Unions forKids” ($7.3 million raised over next 20 years forDoernbecher Children’s Hospital)

1992 50,000th account opened(over 28,000 members)

1998 Web Site introduced

1999 Online Banking introduced

2000 Shared Branching introduced

2001 Oregon Telco first credit union in stateto be granted community charter$500 million in assets

2002 First branch opened (Mall 205)

2004 Name changed to Unitus Community Credit UnionMEMBERS Financial Services introduced,offering assistance with financial planning

2006 Headquarters moved to Unitus Plaza, wheresixth branch is openedBusiness Services introducedUnitus Mortgage established

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early seventy years ago, on July 7,1937, seventeen employees of

Pacific Telephone and Telegraph met toform the Oregon Telephone Employee’sCredit Union. The purpose of the CreditUnion was to pool its savings and cre-ate a fund for making low cost loans tomembers. By year’s end the number ofmembers had grown to 217, and theirpooled assets totaled just over $3,000.

The seven original Board mem-bers were Isaac W. Anderson, D.O.Denman, Jake A. Ellis, Frederick M.Gavin, Genard D. Gleason, H.S. Hayes,and E.T. Healy. Worth noting is thatFrederick Gavin was the grandfather ofTerry Gavin, our current Board Chair-man and co-author of this report. Thiscontinuity from generation to genera-tion is a recurring theme as we lookback through the years.

From our modest beginning in 1937,your Credit Union grew to becomeUnitus, embracing all people from allwalks of life in the seven county regionwe now serve. Some 60,000 of ourfriends and neighbors are Unitus mem-bers, and total assets have surpassed$660 million. These measures of suc-cess—along with strong growth inloans, member savings, and capital

Unitus CommunityCredit Union

Board of Directors

Terry GavinChairman

Barbara LeonardVice Chairman

Don MasonSecretary

Gordon AkesonDirector

Stacy AugustineDirector

Tom FaulknerDirector

Pete ReineckerDirector

Rhonda CramerAlternate Director

Will RaderAlternate Director

Charlie VanRossenAlternate Director

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reserves—indicate that we have con-tinued to meet the ever changing anddiverse needs of our members. (Seekey indicator charts on page 4.)

Remaining true to our foundingprinciple of “people helping people” iswhat distinguishes Unitus to this day.Through the decades we have treatedmembers like family, making a positivedifference in their lives and, in duecourse, the lives of their children andtheir children’s children. For many mem-bers, we have been the only financialinstitution willing to finance a first car,issue a first credit card, and help withother financial challenges.

Today, we find ourselves serving asmany as five generations of the samefamily! We look forward to servingeach new generation and remain com-mitted to helping every memberachieve the milestones of life, fromstarting a family and buying a home topaying for college and saving for retire-ment. Each generation brings a newset of specific needs and wants, andUnitus responds with the services andsolutions to satisfy them.

Unitus also makes a differencein the community. In 2006, the gener-ous contributions of members and

A M E S S A G E T O O U R M E M B E R S

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Consolidated Statements of Income

Years Ended December 31,2006 2005

Interest income:Loans receivable $ 30,317,996 $ 24,527,061Investment securities 3,281,800 3,948,749

33,599,796 28,475,810Interest expense:

Dividends and interest onmembers’ share accounts 16,930,588 12,798,799Borrowed funds 37,275 177,499

Net interest income 16,631,933 15,499,512Loan loss (benefit) provision (55,270) 85,818

Net interest income afterLoan loss (benefit) provision 16,687,203 15,413,694

Non-interest income 9,117,777 4,116,416Non-interest expense

Compensation and benefits 8,881,042 7,848,397General and administrative 9,976,343 8,110,609

18,857,385 15,959,006Net Income $ 6,947,595 $ 3,571,104

Consolidated Statements of Members’ Equity

Members’ EquityBalance at December 31, 2004 $ 62,785,814Net income 2005 3,571,104Accumulated other comprehensive income:Net change in unrealized loss onsecurities available for sale (289,037)Balance at December 31, 2005 66,067,881Net income for 2006 6,947,595Accumulated other comprehensive income:Net change in unrealized loss onsecurities available for sale 694,577Balance at December 31, 2006 $ 73,710,053

F I N A N C I A LS T A T E M E N T SUnitus Community Credit Union

Consolidated Balance Sheets

Years Ended December 31,ASSETS 2006 2005Cash and cash equivalents $ 28,458,252 $ 15,000,964Investments 51,402,655 83,963,949Loans, net of allowance 551,216,390 500,925,497Accrued interest receivable 2,608,062 2,141,382Property and equipment, net 11,173,283 9,407,055NCUSIF Deposit 4,602,195 4,499,267Federal Home Loan Bank stock 2,746,300 2,746,300Other Assets 8,681,065 7,990,574

Total Assets $660,888,202 $626,674,988

LIABILITIES AND MEMBERS’ EQUITYLiabilities:

Members’ share andsavings accounts $575,958,569 $549,143,312Accrued expenses andother liabilities 11,219,580 11,463,795

Total liabilities 587,178,149 560,607,107Members’ equity:

Regular Reserves 22,489,988 20,559,198Undivided Earnings 51,566,823 46,550,018Accumulatedcomprehensive loss (346,758) (1,041,335)

Total members’ equity 73,710,053 66,067,881Total Liabilities andMembers’ Equity $660,888,202 $626,674,988

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countless hours of volunteer work byour staff aided these local charities:Doernbecher Children’s Hospital,SnowCap, Helping Hands, AmericanHeart Association, Easter Seals, Relayfor Life, Schoolhouse Supplies, Make-A-Wish Foundation, Oregon Mentor,Salvation Army, Clackamas Women’sServices, Good Neighbor Center, TheLinks, Habitat for Humanity, and anumber of other worthwhile programsand community events.

Also during 2006 we introducednew services and expanded others inour continuing quest to better serveour members. Highlights included:

• Our real estate department be-came a division of Unitus, gained itsown name as Unitus Mortgage, andintroduced Home Value Packages thatsave hundreds or thousands of dollarsin closing costs for members who useother Unitus services.

• We opened our Beaverton Branchin March, closely followed by theUnitus Plaza in downtown Portland inApril. The Unitus Plaza is home to oursecond downtown Portland branch, aswell as our administrative offices andUnitus Mortgage.

• Our innovative Platinum RewardsVisa Card debuted, featuring very com-petitive rates, a low fee structure, andan extensive array of reward choices—

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without all the tricks and gimmicks oftypical credit cards.

• Unitus members now have freeaccess to over 25,000 ATMs coast-to-coast, including more than 5,500ATMs in 7-Eleven stores. This is manythousands more free ATMs than anyother financial institution can offer!Unitus members also have free accessto more than 2,000 branch locationsthrough participating credit unionsnationwide.

• OnLine BillPay is now includedfree of charge with all Unitus checkingaccounts, saving members both timeand money.

• Member Advantage CDs wereintroduced at above market rates toreward members who have a Unituschecking account, debit card, and directdeposit.

• Once again Unitus staff touredarea colleges in late summer and earlyfall, introducing students to low costchecking, auto loans, and other ser-vices geared to their needs.

• Unitus awarded 13 scholarshipstotaling $13,000 to members or chil-dren of members. Four high schoolseniors, four college undergraduates,and two college graduates earnedscholarships, as did two outstandingLatino students and one individual rec-ognized for service to the community.

Patricia E. SmithPresident/CEO

Terry J. GavinChairman

Through thedecades we havetreated members

like family,making apositive

differencein their lives

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In 2007 we are extending our mem-bership area to include Clark County,Washington. Our free online bankingservice, uOnline, is taking on a newlook and many new features that willbenefit members. We will continue toexpand on the financial seminars andexpert financial assistance we makeavailable to members, as well as offernew ways for members to save moneyby making good use of Unitus services.Watch for further announcements asthe year progresses.

As a member-owned, not-for-profitfinancial cooperative, Unitus continuesto depend on the support of its mem-bers today, just as it did in 1937. Yourfellow members who serve on theBoard, along with our managementteam and staff, thank you for giving

Unitus the opportunity to make a differ-ence for you and your family. With ourdeep local roots, we are also pleasedto help generate jobs, dollars, and vol-unteer resources that benefit the com-munities where we all work and live.We have seen great success in our firstseventy years, but we firmly believethe best is yet to come!

Terry J. GavinChairman

Patricia E. SmithPresident/CEO

Anyone wholives or works in

Multnomah,Washington,Clackamas,

Marion,Polk,

Yamhill orClark Countyis eligible tojoin Unitus

K E Y I N D I C A T O R S

550’06‘03 ‘04 ’052002

MEMBERSHIP CAPITAL RESERVESSAVINGSLOANSMILLIONS OF DOLLARSTHOUSANDS MILLIONS OF DOLLARSMILLIONS OF DOLLARS

ASSETSMILLIONS OF DOLLARS

’06‘03 ‘04 ’052002 ’06‘03 ‘04 ’052002 ’06‘03 ‘04 ’052002 ’06‘03 ‘04 ’05200250300 35 475

575 350 40 500

600 400 45 525

625 450 50 550

650 500 55 575

675 550 60 600

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60

65

70

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