The Bank hired the firm of Peat, Marwick, Mitchell & Co. to assist in reviewing the organizational structure and to help plan effective resource allocation. We believe that the outcome of this activity will produce a stronger and more efficient Bank and will have a positive effect on earnings and client services.

The structure of our management team was strengthened significantly during 1982. Two vice presidents were hired, the Vice President for Commercial Lending and the Vice President for Real Estate. The Marketing Division was fully staffed with additions to research and communications personnel. The Operating Services Department was created to develop and manage our in-house management information

Avenues for Growth

The National Consumer Cooperative Bank is the leading bank in a specialized market: the consumer cooperative sector. The Bank's mandate is to provide credit products and services to cooperatives on a sound business basis. This mandate requires multi-industry experience, viable services, flexible financing and responsive marketing.

The success of the Bank is directly linked to the success of the coopera tive sector. The Bank's existing market in consumer cooperatives contain over 20,000 consumer and producer cooperatives throughout the United States. Cooperatives range from thousands of informal buying clubs to multi-million dollar enterprises. The spectrum of cooperatives is broad; it includes food, cable, healthcare, housing. farm supplies, manufacturing and childcare.

In order to assist cooperatives to develop and achieve their greatest potential, the Bank must allocate its development resources effectively. The Bank assessed the potential of several major industries and the role the Bank could play in those industries. During the year, staff conducted market research, met with consultants, queried cooperative leaders and evaluated the Bank's first development efforts. Based on this analysis, the Bank selected four key industrieshousing, healthcare, food and cable

television and developed strategic plans to encourage development of the Bank's portfolio in those sectors.

Housing cooperatives represent one of the largest areas of potential grow th in the cooperative sector. During the year the Bank continued to play a major role as a nationally known leader in this market. It received approval as a national seller/servicer of project loans from Federal Home Loan Mortgage Corporation (Freddie Mac). It also received preliminary approval as a national seller/servicer for individual blanket loans from The Federal National Mortgage Association (Fannie Mae); full approval is ex pected in 1983. This will allow the Bank to increase the number of loans to housing cooperatives through use of the secondary market. The Bank is also helping to expand capital available to housing cooperatives by aggressively developing

and

streng ngg ages to mexING TV. T ofte ndustry

The reta and whose t

* Amade fresh chalenges for the Bank Revs. and the contest of food have festenst numerous food op eratives in the last few years how ever these same exome trends have also eroded profit margins for food cooperatives. Additional staff was hired and market research was conducted on new types of food cooperatives as we as ndustry trends. The Bank undertook two Joan development projects one assisting warehouse mergers, the other assisting the development of an urban shopping mall. The Bank's commitment to this industry remains high

In 1982, the Bank directed its resources to caba telers as a new and potentially strong market for the Bank. Professional staff was hired and bank officers trained to position the Bank as a leader in cooperative cable television systems.

An aggressive market development program was implemented. In December, the Bank's efforts paid off when the country's first subur ban cable cooperative was awarded the franchise for a medium sized town.

The Bank's grow th is closely related to the growth of financially healthy cooperatives. Bank strategy concentrates on encouraging the development and expansion of cooperatives with credit needs. Loan portfolio growth in 1983 will build on the extensive marketing and development work done in 1982.