01/25/2012: Seneca Federal Savings and Loan Association Officers Report

Mutually owned by you our members, lending decisions that are made locally, and personal customer service, all attributes of Seneca Federal, proudly serving the Central New York community for 84 years. To achieve this milestone, Seneca Savings has been fortunate to have a dedicated staff of employees and officers, who understand the importance of knowing their customers and providing them with the best possible service.

To further promote Seneca Savings in the communities in which it serves, Seneca Savings opened its doors to local business owners and customers with “meet and greet” after hour gatherings at all three branch locations. Seneca Savings also continued its participation and contribution to various community events and programs such as the “Go Red for Women” campaign; fund raising walks for the American Cancer Society and Paige’s Butterfly run; sponsorship of the Baldwinsville Schools scholarship fund; and other local charities to numerous to list here.

With little change in the national economy, which is still experiencing high unemployment rates and a flat interest rate environment, to sustain long-term viability Seneca Savings has continued to build liquidity and monitor and control interest rate risk. Growth in capital continues to remain a focus of Management and all employees continue to seek ways to improve efficiency and reduce expenses. Consolidated capital, as of December 31, 2011 is a very healthy balance of $10.6 million.

In remaining true to Seneca Savings’s charter of fostering homeownership, $13 million in residential mortgage loans were originated in 2011. Seneca Savings continued participation in the Onondaga County Community Development (OCCD) for the Home Ownership Program. The Board of Directors approved 12 $1,000 grants in 2011, 8 of which were used, to qualified low-income households. In September 2011, Seneca Savings requested to participate in OCCD’s Rehabilitation Program, offering improvement loans to qualified low to moderate income households at a quarter percent discount from typical interest rates. Seneca Savings also participates in the Federal Home Loan Bank’s First Home Club Program. In 2011, two loans were approved through this program to first time home buyers.

As a proactive measure, Seneca Savings added additional Visa debit card security features to prevent customers from becoming a victim of debit card fraud, at no additional cost to our customers. These new features, along with ongoing employee and customer education, represent Seneca Federal’s commitment to customer information security.

Late in 2011, Seneca Savings began its working relationship with its new Federal regulator, Office of The Comptroller of the Currency, as their merger with the Office of Thrift Supervision was completed in July. Seneca Savings recognizes the challenges ahead to meet the extensive regulatory changes brought forth by state and federal agencies. To better assist and inform customers and noncustomers, in 2012, Seneca Savings will continue to focus on education and training of its employees.

Financial Quest Inc., Seneca Savings’s wholly owned subsidiary, continues to offer various nontraditional products to its clientele, providing additional investment options to maximize return without FDIC insurance. Financial Quest’s performance in 2011 contributed to Seneca Federal’s net earnings for the year amid various economic uncertainties.

On behalf of our Directors, Officers and Employees, we wish to thank all of our members who have remained loyal customers of Seneca Savings. Please remember to communicate any comments or suggestions to us, your input is important.

Respectfully submitted,

The Officers of Seneca Savings Savings & Loan Association

Katrina M. Russo – CEO

Wendy K Bodnar V.P.-CFO