Ron Westad
President/CEO

To do good, we must do well.

What we do, who we are and what we will become

What we do

The expansion of the Arizona Federal branch network; the offering of insurance protections for your automobile, home or business; the expansion of mortgage options; the enhancements to CU Online functionality; the development of services in Spanish; the addition of 32,000 surcharge-free ATMs nationwide; the contributions and commitments to the communities we serve; the management of our financial performance to maintain our safety and soundness; the efforts to provide a positive service experience for all members all of the time; and, the return of $10 million in accumulated capital to members.

This is what we do. And this is what we did in 2006.

Within this year's annual report you may learn more of what we do. You may also learn of the power of a not-for-profit financial cooperative — Arizona Federal, to be specific. You see, with the active participation and involvement of every individual member and individual employee we have the potential to create real, tangible and measurable financial value.

This is what we do. And this is what we did in 2006.

And I didn’t even mention the everyday value represented by above average savings rates, loan rates below market averages, fees that are both short in number and low in amount, and in many cases services that carry no fee whatsoever.

I also did not mention the extensive number of community service hours contributed by both employees and members. Often the community service hours of employees were paid for by Arizona Federal and we matched members’ community service hours with dollars through our Community Partners grant program.

This is what we do. And this is what we did in 2006.

In recent annual reports, I have acknowledged that “to do good, we must do well,” and I have written of our belief that we are a “credit to our community,” and last year I addressed our commitment to provide more convenience, less cost, and greater care.

This is what we do. And this is what we did in 2006.

Who we are

I would like to remind you of who we are and what we stand for. We are a collection of 200,689 individual members (as of December 31, 2006) and nearly 700 employees, all of whom represent the communities we serve.

We have members and employees from all walks of life, from varied backgrounds to varied futures. We have individuals with resources to lend, and others with purchases to finance. We are guided by values and principles that recognize the worth of each and every individual.

We are locally-owned (by you, our members) and locally-operated (by us, our employees) for the benefit of both.

This is who we are.

We do not have a group of stockholders to satisfy – we need only satisfy each other. It is the most fundamental, and I would argue the most fundamentally successful, business model in America. It is the exchange of mutual commitments for mutual benefit—it is a mutual promise of fulfillment. If I fulfill my promise, and you fulfill your promise, everyone wins. A true financial cooperative can’t sustain itself, let alone create mutual value, without the fulfillment of mutual promises.

This is who we are.

What we will become

As I reach for the proverbial crystal ball, I offer this forecast of our future in 2007 and beyond: we are an organization creating real, tangible and measurable financial value for members and employees; we are an organization making and fulfilling promises; and we are the credit union of choice for both membership and employment.

This is what we do, who we are and what we will become.

Conclusion

As is my custom, I close with a note of thanks.

I extend my sincere gratitude to our volunteer Board of Directors and Audit Committee for their tireless efforts to represent the interests of each and every member and employee. This dedicated group of individuals has created value for members through their governance. They are elected by the membership and they serve for the benefit of members, employees and our overall communities.

I’d also like to thank each employee of Arizona Federal for their contribution to define “who we are.”

And, similarly, I must thank our loyal members for allowing us to fulfill our promise and for contributing to both what Arizona Federal is today and where we will go.

Ronald L. Westad
President & CEO