Message from the CEO — July 2010

In March 2010, LANCO held its 46th Annual Meeting. At that meeting I reviewed the 2009 financial performance of LANCO, provided budgeted projections for 2010 and answered some great questions from our shareholders pertaining to the economy and interest rates.

The economic recession continued through most of 2009 with some economists declaring that a recovery was in progress as we ended the year. Indeed we were beginning to see the signs of a national recovery. Unemployment claims were slowing, home sales were improving, companies with losses in 2009 were reporting first quarter gains in 2010 and the stock market was also recovering.

While these are all signs of a recovery, it will be consumer spending driven by confidence that will sustain growth and recovery. Confidence in our government and big corporations have further eroded as we have witnessed events such as big bank bailouts, Toyota’s recall, Greece’s financial crisis and the BP oil rig explosion.

At LANCO, we monitor these national trends but our focus is on Lancaster County and our membership. I believe the recovery will be slow and will experience some setbacks along the way. Interest rates will most likely remain at or near current levels for the rest of 2010.

LANCO continues to support our membership, which now exceeds 11,400. LANCO ended the first quarter of 2010 with assets in excess of $55 million and deposits of nearly $51 million which represents annualized growth rates of 18.6% and 20.5% respectively.

We believe growth in membership and deposit balances are votes of confidence in the Board, Managers and Staff. Thank you for that support and I assure you we will continue to work hard to earn your trust and keep you informed in these uncertain times.

Barry A. Ashenfelder
President/CEO