Your Dream. Our Purpose.

Transcription

1 2012 Annual Report Your Dream. Our Purpose.

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3 Your Dream. Our Purpose. Chairman/CEO s Report 3 Statement of Income 6 Supervisory Committee Report 4 Volunteers and Executive Staff 7 Treasurer s Report 4 Locations 7 Statement of Financial Condition 5

4 chairman/ceo S Report 3 It was recently reported that sales of personal computers have plunged by 14%. Now, the devices of choice are the tablet and the smartphone. Many people, especially the younger generation, turn to these devices first while shopping and transacting business. Whoever thought that you would buy a book online, or that digital books would replace paper-based books as quickly as they have? Book retailers that didn t adapt (remember Borders?) have gone bankrupt and others will follow suit. They either resisted the consumer s move to a more convenient, accessible use of their product, or they failed to see it coming. They were denying the reality of our rapidly changing world brought on by improved technology. There is a similar sea of change in banking that is following the same cycle. Like bookstores that relied on a physical product, we used to rely on currency to transact business. Like books, our currency has been digitized. When you use a credit card or debit card, you are using digital money. There is no movement of physical currency behind the scenes. Rather, there is simply a memo on a ledger that some of your money was moved to someone else s account. Fewer and fewer needs for cash exists today. We use debit cards to pay for cab fare, subway fare (by way of a MetroCard), coffee, shoes, books, you name it. Virtually all financial transactions can be completed without physical cash. This digitization extends to financial paperwork as well. We recently spoke to a member about their new car purchase. Your Dream. Our Purpose. Core Purpose: To help our members achieve their financial goals. We Will Always: Listen to you to get to know you Find out where you want to be tomorrow Do the right thing Provide the right solution/recommendation Respect you The entire purchase process was completely virtual. There was no trip to the credit union to arrange financing, no multiple trips to the dealer and no physical paperwork. Everything, including the signing of loan documents, was completed electronically. The only time this member had to see anyone was when they went to the dealer to pick up the car, which was a pleasurable 45 minute experience, start to finish. And if this or any of our other members ever need the help or advice of a Service Expert or Loan Expert, they are all just a call, chat, text, or away at the member s choice! This is where the world is rapidly heading. Branch banking, as it was, is going the way of the dinosaur. I think this really became clear when branch offices began installing coffee bars to try to attract new customers. That should tell you something when you have to have a coffee service to bring traffic into a branch. Maybe people just don t need the branch. People now realize that branch-based banking is less convenient than PC-, tablet- and phone-based banking. Banks and credit unions are shifting away from branches. Your credit union is no different. In our case, we had another deterrent to our branch banking system. Many of our branches were located in secured FAA Air Traffic Control facilities. It was difficult, if not impossible, to access the branch unless you were working at the facility. As the employee base at these facilities was reduced, primarily due to technological advancement, there were fewer and fewer people that were able to use them. They became very expensive to operate. We made the difficult but necessary decision to close all of these limited-access branches. There are now two aspects to our branch network. First, we have publicly accessible branches in Clark, NJ and near JFK Airport in Jamaica, NY. Second, we are part of a nationwide shared-branching network. These Shared Service Centers ( give our membership

5 account access at over 5,000 credit union branches across the country. For all our talk about closing branches, we actually have a branch network that is larger than any bank branch network in the country! Our focus now is on improving the quality and accessibility of our electronic service delivery channels. In 2013, we are beginning the search for a new core computer system. The technology that we are using, while functional for the time being, will not grow with us into the future. It is imperative that we offer a better user experience nicer screens and more intuitive interfaces and provide you with the latest technological features and functionality. This upgrade will be a challenge, but it is necessary for our survival as a financial institution and for your satisfaction as a member. Your credit union is a strong, healthy, vibrant organization led by a team of dedicated volunteers and professionals. We are focused on managing costs, improving member value and returning to you, our owners, as many benefits as we possibly can. Thank you for using your credit union. Neal Holtzer Chairman Thomas J. O Shea President/CEO Supervisory Committee Report The Supervisory Committee s primary function is to oversee all aspects of the Credit Union to determine that it is soundly managed and that members assets are safeguarded. In order to fulfill this function, the Supervisory Committee monitors and evaluates the quality of the Credit Union officials, performs audits, and reports on the result of its audits and reviews. An ancillary duty of the Supervisory Committee is administering the annual Salvatore Perricone Scholarship Awards. Your Credit Union is constantly undergoing reviews and evaluations of their operations and financial reporting by both the Internal Audit Department and the external audit firm of Nearman, Maynard, Vallez, CPAs, P.A. Based upon the information gathered from both the internal and external audits, it is the committee s opinion that the operation of your Credit Union is in compliance with the applicable statutes and regulations; it is financially sound; and, as always, the interest of its members is being well served. Respectfully Submitted, Supervisory Committee 4 Treasurer s Report In this annual report you will find a Statement of Financial Condition and Income Statement for the year Your credit union is a strong and healthy financial institution. Our Net Operating Income for 2012, before extraneous items, was $974,065. After accounting for Federal Insurance Stabilization mandates, our net income was $835,444. Our assets at year end 2012 were $183,591,504. Our capital ratio, the indicator of our health continues to exceed the regulatory well-capitalized level, ending the year at 9.31%. We continue to invest for the future, in technology, services, and our people. We are dedicated to strengthening our relationship with you and providing you with the financial services you need. Nicholas Luca Treasurer

6 statement of financial condition December 31, 2012 December 31, 2011 ASSETS Cash and cash equivalents $1,788,509 $2,955,414 Investments: Available-for-sale 4,620,084 16,946,151 Other 50,064,691 32,780,208 Federal Home Loan Bank (FHLB) stock 126, ,400 Loans receivable, net of allowance for loan losses 120,969, ,259,683 Accrued interest receivable 733, ,384 Premises and equipment, net 248, ,955 National Credit Union Share Insurance Fund deposit 1,459,171 1,512,829 Assets acquired in liquidation 913,401 1,070,000 Other assets 2,668,009 3,305,876 5 LIABILITIES AND MEMBERS' EQUITY Total Assets $183,591,504 $201,058,900 Liabilities Members' share and savings accounts $165,591,806 $169,727,081 Borrowed funds 27,596 12,390,259 Dividends payable 5,560 9,881 Accrued expenses and other liabilities 2,194,097 3,573,090 Total liabilities 167,819, ,700,311 Commitments and contingent liabilities Members' Equity Regular reserve 5,152,000 5,152,000 Undivided earnings 11,948,180 11,112,736 Accumulated other comprehensive income (loss) (1,327,735) (906,147) Total members' equity 15,772,445 15,358,589 Total Liabilities and Members' Equity $183,591,504 $201,058,900 The consolidated financial statements include the accounts of Aspire Federal Credit Union and its wholly owned credit union service organization (CUSO) subsidiary, Aspire Medallion Funding, Inc. All significant intercompany accounts and transactions have been eliminated. Total assets for 2012 decreased by approximately $17,467,000 (8.7%), members shares and share equivalents decreased by approximately $4,135,000 (2.4%), and loans decreased by approximately $19,980,000 (14.0%), which was the result of the decline in Medallion loans being paid off on Aspire Medallion Funding s Statement of Financial Condition.

7 Statement of income December 31, 2012 December 31, 2011 interest income Interest on loans receivable $8,098,595 $7,934,038 Interest on investments 297, ,064 Interest income 8,396,502 8,472,102 interest Expense Dividends on members' share and savings accounts 812,454 1,276,383 Interest on borrowed funds 2,639 7,318 Interest expense 815,093 1,283,701 Net Interest Income 7,581,409 7,188,401 Provision for Loan Losses 927, ,417 Net Interest Income After Provision for Loan Losses 6,653,990 6,516,984 non-interest income non-interest expense Other non-interest income 1,902,013 1,709,030 Fees and service charges 1,193,526 1,203,237 Non-interest income 3,095,539 2,912,267 9,749,529 9,429,251 Compensation and employee benefits 3,487,759 3,688,110 Professional and outside services 2,492,604 2,337,719 Operations 1,112,131 1,074,203 Loan servicing 857, ,995 Education and promotion 364, ,088 NCUA assessment 138, ,207 Occupancy 330, ,972 Loss on disposition of assets acquired in liquidation, net 126,000 - Loss on disposition of premises and equipment, net 4,493 - Non-interest expense 8,914,085 9,215,294 6 Net Income $835,444 $213,957

8 Volunteers and Executive Staff Board of Directors These volunteers set policies and develop long-term strategic planning for the future of the Credit Union s success. Neal Holtzer, Chairman James Ostaszewski, Vice-Chairman Nicholas Luca, Treasurer Dominick Festa, Secretary Fred Glassberg, Director Dan Peters, Director^ Manny Weiss, Director^ ^Up for renomination this year. Supervisory Committee This committee is responsible for ensuring the Credit Union s compliance with all relevant laws and regulations. Christine Zoeller, Chairperson Barry Boshnack Fritz Duchatellier Olga Krsinic Executive Staff Thomas J. O Shea, President/CEO Rosemary Masters, VP Member Services & Lending Robyn Oresto, VP Finance Laura-Ilene Harding, VP Marketing & Business Development locations Visit us online at for branch locations and hours. 24/7 Call Center Call Center Representatives are available 24/7 at , Option 3. Over 5,500 Shared Branches Take advantage of a variety of services as if you were at your own Credit Union. We ve joined forces with other credit unions across the nation to offer you convenient account access wherever you may be! It s easy to deposit, withdraw or transfer money at a Shared Branch. You can also inquire about your loan balance. Visit our Branch Locator online at for a location near you. Over 70,000 Surcharge-Free ATMs Access your accounts anywhere, anytime with your ATM or Debit Card at over 70,000 surcharge-free ATMs! Visit our ATM Locator online at for a location near you. Mobile Banking We re as close as the phone in your pocket! You can transfer funds between accounts, view transaction histories and account balances, and even find a surcharge-free ATM or branch near you right from your smartphone! Visit mobilebanking to enroll today. edeposits Qualifying members* may deposit checks directly from their home or office. It s easy, and we ll even supply you with postage-paid envelopes! *Maximum deposit amount $3,000. Other restrictions may apply. Visit for the full edeposit User Agreement and Disclosure MY CU LOAN ( ) Federally Insured by NCUA.