Meeting. of the membership. Serving members since May 26, 2016

Transcription

1 Annual Meeting of the membership May 26, Serving members since 1936

2 BOARD OF DIRECTORS REPORT As a Board, we are responsible for the strategic direction of the credit union, formulating policy, communicating with the membership and management, serving as trustees to safeguard our members money, and ensuring the continuity and development of the credit union. To meet these responsibilities, the Board met regularly throughout the year to assess financial and strategic plan performance, review key performance trending, analyze and set policies, and approve the annual operating plan. More than that, we work cooperatively with management to provide value by offering a variety of competitive products, rates and services, through many different delivery channels to meet our members needs. After all, our credit union exists for our members! We are committed to executing our Vision of transforming lives by making dreams happen. I m pleased to report USE Credit Union is a financially healthy organization, well positioned to grow and offer you affordable products and services. We look forward to the year ahead and extend our sincerest appreciation to you, our valued members, for your trust in USE Credit Union. Josh Lawrence Chairman, Board of s 2015 BOARD OF DIRECTORS JOSH LAWRENCE Chairman LESLIE B. OVER MAN Vice Chairman MATTHEW ADAMS JOHN R. CHANTENGCO ANTONY C. CHERIN SCOT EISENDRATH DAVID ELY YVONNE L. MARSH BEVERLY RANDEZ ARUN SEN STEVE ST. MARIE

3 SUPERVISORY COMMITTEE REPORT The Supervisory is composed of member elected volunteers, charged with representing our members interests, upholding policies, procedures and regulatory requirements, and ensuring an independent audit is conducted annually. In keeping with its audit responsibilities, the retained, and met with, RSM (formerly McGladrey & Pullen, LLP), who reviewed the books and records of USE Credit Union. In RSM s opinion, USE s balance sheet and related statements of income present fairly, in all material respects, the financial position and results of operations for USE Credit Union in conformity with U.S. GAAS. The condensed version of the credit union s audited financial statements may be found in the attached Balance Sheets and Income Statements as of December 31, 2015 and A full copy of the RSM s report has been provided to the Board of s, and the State of California s Department of Business Oversight, and will be made available to members upon request. In addition to its independent audit responsibilities, the also met periodically with a variety of internal auditors, to review their audit results, as well as with the credit union s own Risk Management department staff who performed a variety of internal control, regulatory and legal reviews SUPERVISORY COMMITTEE M Lissa Michelson Chairperson, Supervisory M LISSA MICHELSON Chairperson KIMBERLY FLOYD CAROLYNN WINSHIP KATHARINE WARDLE Associate CREDIT MANAGER S REPORT Through a team of talented and committed team members, by offering competitive rates and loan products, and with our external partners, such as auto dealers and credit unions, USE s loan portfolio increased 8.2% or $38,839,989 in 2015 versus 4.9% or $22,402,068 in The portfolio mix remained fairly steady from the previous year in business, second trust deed, home equity, credit card, and first trust deeds, with the majority of the increase in consumer loans. In 2015, our delinquency rate decreased to 0.37%, from 0.38% in 2014, while our loan losses increased from $758,106 to $2,412,402. Gary Ahlgren, Credit Manager

4 USE CREDIT UNION 2016 Annual Meeting of the ship Balance Sheets as of December 31, 2015 and 2014 (unaudited) Assets Cash and cash equivalents $ 36,402,112 $ 50,078,865 Investments: Available for sale 194,667, ,951,339 Federal Home Loan Bank (FHLB) stock 4,151,900 4,063,600 Loans, net 508,222, ,523,614 Loans held for sale 4,314,484 3,870,134 Accrued interest receivable 2,515,191 2,545,144 Premises and equipment, net 29,159,187 27,708,391 National Credit Union Share Insurance Fund deposit 6,989,869 6,765,063 Insurance contracts 10,587,008 10,349,755 Other assets 35,464,697 34,475,527 Total Assets $ 832,475,061 $ 794,331,432 Liabilities and s Equity Liabilities: s shares $ 737,554,469 $ 710,335,846 Borrowed funds 5,000,000 3,000,000 Accrued expenses and other liabilities 9,867,629 3,659,290 Total Liabilities 752,422, ,995,136 Commitments and Contingencies s Equity: Retained earnings 78,197,122 74,209,618 Accumulated other comprehensive income 1,855,841 3,126,678 Total s Equity 80,052,963 77,336,296 Total Liabilities and s Equity $ 832,475,061 $ 794,331,432 Loans Shares Net Worth $600,000,000 $550,000,000 $500,000,000 $450,000,000 $400,000,000 $350,000,000 $300,000,000 $750,000,000 $730,000,000 $710,000,000 $690,000,000 $670,000,000 $650,000, % 9.00% 8.00% 7.00% 6.00% 9.39%

5 USE CREDIT UNION 2016 Annual Meeting of the ship Income Statements for the Years Ended December 31, 2015 and 2014 (unaudited) Interest income: Loans $ 21,081,242 $ 21,808,519 Investments and cash equivalents 4,274,517 4,583,207 Total Interest Income 25,355,759 26,391,726 Interest expense: s shares 1,760,995 1,881,598 Borrowed funds 189, ,470 Total Interest Expense 1,950,413 2,038,068 Net Interest Income 23,405,346 24,353,658 Provision for loan losses 612,401 Net Interest Income after Provision for Loan Losses 22,792,945 24,353,658 Noninterest Income: Service charges and other fees 2,240,750 1,819,948 Interchange income 2,746,371 2,899,911 Net gain on sales of loans 1,671,086 1,061,432 Courtesy pay fees 1,179,916 1,269,182 Losses on the sale of available-for-sale investments (46,904) (48,575) Gain on sale of property 1,037,180 Gain on disposition of foreclosed property 1,588 Other noninterest income 1,855,566 1,887,409 Total Noninterest Income 9,646,785 9,928,075 Noninterest Expense: Compensation and benefits 13,752,530 12,555,908 General and administrative expenses 11,817,499 11,138,776 Occupancy 2,882,197 2,741,433 Total Noninterest Expense 28,452,226 26,436,117 Net Income $ 3,987,504 $ 7,845,616 Net Interest Margin 3.14% 3.20% 3.06% 3.10% 3.03% 3.00% 2.89% 2.90% 2.80% 2.70% 3.60% 3.50% 3.40% 3.30% 3.20% 3.10% Expense Ratio 3.52% 3.34% 3.40% 3.25% 1.20% 1.00% 0.80% 0.60% 0.40% 0.20% 0.00% Return on Assets 1.06% 0.98% 1.01% 0.27%