Serving the Community

Transcription

1 2014 ANNUAL REPORT Serving the Community Federally insured by NCUA 80TH ANNUAL MEETING

2 VISION STATEMENT To be our Members primary long-term financial institution of choice by providing the highest level of personalized service along with offering continual and up-to-date quality products. MISSION STATEMENT Our mission is to positively impact the communities we serve and improve our Members financial lives through personal commitment and integrity.

3 NEW IN 2014 Our REDESIGNED WEBSITE sports a fresh, modern look with increased functionality and includes a mobile app for Apple and Android users. A NEW LOAN OPERATING SYSTEM makes it quick and easy to apply and get approved for a loan online. Use of digitized signatures and the capability for members to upload documents and interact with our loan staff online speed the process even further. No need to rush to an Atlantic Federal branch to make check deposits anymore. Using REMOTE DEPOSIT, members can deposit checks using their mobile phones. Just a few taps and camera clicks are all it takes. A major renovation of the Kenilworth Branch s lobby culminated in a GRAND RE-OPENING celebration in June. The renovation added an additional teller station and three lobby offices so members can interact privately with our staff. Members can make in-person deposits 24 hours a day using the new KENILWORTH ATM. The receipt prints out a copy of each check. The receipts for cash deposits show the bill denominations and deposit total. MAKE SURE YOU & YOUR ENTIRE FAMILY ARE USING THE ATLANTIC FEDERAL CREDIT UNION LOANS: Visa Credit Cards 1st Mortgages Home Equity Line of Credit 1st Lien Home Equity Loans Interest-Only Home Equity Line of Credit New & Used Vehicle Loans Personal Loans Share Secured Loans Share Certificate Loans Overdraft Line of Credit Private Student Loans SAVINGS: Savings Accounts Certificates of Deposit Money Market Accounts Checking Accounts IRAs-Traditional & Roth Coverdell Education Savings Accounts Holiday & Vacation Club Accounts Custodial Accounts SERVICES: Online Banking Bill Pay Mobile Banking Remote Teller Online Check Images E-Statements VISA Debit/ATM Cards Direct Deposit VISA Gift Cards Free Notary Service Shared Branch Network Signature Guarantee Money Orders Wire Transfers The Atlantic Federal Credit Union 2014 Annual Report 80th Annual Meeting 2

4 A Message from the Chairman of the Board & the CEO/Treasurer Serving the Community Atlantic Federal Credit Union was founded in 1935 by a group of AT&T Western Electric employees in Kearny, New Jersey. The year 2014 marks our 80th anniversary of providing exceptional service to our members. Over that time span, the Credit Union has endured and prospered through many economic challenges, perhaps none more challenging than the recent Great Recession. The Credit Union s original membership has evolved to the diverse opportunities now offered by a community charter serving Union and Essex County as well as our loyal existing members. The Credit Union s service lines have expanded with the changing needs of its members and advances in technology over that time. Robert Wilder Chairman of the Board of Directors The challenges to growth are being driven by transformational vs. incremental change. Some of the more significant challenges include market maturity, competition, consolidation, regulation and technology. We are focused on these developments, concentrating our resources on service offerings and platforms which enhance your experience with us while attracting and retaining new members. Looking back over 80 years of change there is a common theme: your Board of Directors and Management remained committed to its core mission improving the financial lives of the members it serves! From inception, the Board of Directors and Management s mission was and continues to be accomplished through two underlying principles do what s in the best interest of its members and do so in a fiscally responsible way. Michael Fanelli Treasurer / Chief Executive Officer Keeping to those principles has allowed us to become one of the most financially sound credit unions in the country with financial capital of 15.8%, more than double the regulatory requirement, and grow to over $250 million in total assets. It has also provided a compass of sorts as we transition through our most recent challenge of introducing ourselves to a prospective new membership. Over the past two years we ve used this message to announce the potential growth opportunities offered with our move to a community charter as well as update you on our progress with that transition. As you are well aware, we are located in a highly competitive area that is saturated with financial institutions all vying for your saving, loan and investment dollars. Our objective is simply to implement the strategic initiatives necessary to remain relevant to you and attractive enough that prospective members will give us an opportunity to earn their business much like we ve done for you over the past 80 years. The strategic initiatives to accomplish our objective were formalized in our Membership Development Plan [MDP] that was introduced in last year s message. By design, the majority of the MDP is heavily concentrated in the areas of product enhancements and technological improvements. It also includes strategic initiatives to improve our already high service levels. The former affords us the opportunity to effectively compete with other financial institutions in our space. The latter allows us to deepen the relationship with you that will help us improve the management of your personal financial status. The service aspect of the MDP remains critical to our future success and cannot be emphasized enough. It is a key element in differentiating us from our competitors and provides us with the best chance of maintaining our strong financial position in the future. 3 The Atlantic Federal Credit Union 2014 Annual Report 80th Annual Meeting

5 Technological advances are forcing financial institutions to improve their delivery systems to meet expectations of instant access to account information and the ability to perform account transactions anytime and anywhere. As we mentioned, technology plays a key role in several of the MDP s initiatives. While we already have a complete line of electronic services that includes online banking, bill pay, E-Statements and debit cards, we made significant capital investments in this area over the past year. First, we upgraded our website to accept online loan applications where you can receive a decision almost immediately. All Atlantic Federal Board of Directors Front L-R: Michael Fanelli, Claudia Johnson, Robert Janish, Robert Lear. Rear L-R: Frank Cirone, Donald Olsen, Frederick Beckman, Robert Wilder, Joseph Spina. your loan documentation and signatures are executed through a secure site and retained electronically. This streamlined and secure process has been well received based on the extremely positive feedback we ve gotten from many of you over the past year. Next, we added a mobile banking app that provides 24/7 account access and transaction capability through your mobile device such as a smart phone or tablet. As an enhancement to the mobile banking app we introduced a remote deposit service which enables you to snap pictures of checks from your smart phone or tablet and deposit them into your account without having to visit one of our branches. The same technological advances that help improve efficiencies and allow instant access to accounts also come with security challenges. We spend a great deal of time and budget dollars protecting your personal information. In 2015 we will be adopting the latest in fraud protection by reissuing debit and credit cards with EMV chip technology. This is a global standard for authenticating debit and credit card transactions. We mentioned earlier that service will differentiate us from our competitors. The MDP has strategic initiatives to enhance our already high service levels. Over the past year we ve redesigned processes and realigned staff that improved service and inquiry efficiencies for your account and prospective accounts. We ve also made a more concerted effort to reach out to you to understand more about your financial needs and to be a resource when you re in need of a product or service. We will continue to seek your input while we develop programs and services that satisfy your financial needs. We ve had a busy and challenging year. We re making great strides in accomplishing our strategic goals and we still have a long way to go. We ve been through 80 years of change that has produced a loyal membership and we thank you for your support. We promise to continue our efforts to be our members primary long term financial institution of choice! Respectfully submitted, Robert D. Wilder Chairman of the Board of Directors Michael Fanelli Treasurer / Chief Executive Officer The Atlantic Federal Credit Union 2014 Annual Report 80th Annual Meeting 4

6 MINUTES OF THE 79TH ANNUAL MEETING OF THE ATLANTIC FEDERAL CREDIT UNION Sunday, May 4, 2014 Directors Present F. B. Beckman F. T. Cirone R. A. Janish R. M. Lear D. J. Olsen J. P. Spina Supervisory Committee Present W. J. Kennedy 1. The meeting was held at the Pines Manor, Edison, New Jersey. Mr. Donald Olsen, Chairman, called the meeting to order at 1:20 p.m. 2. Mr. Olsen welcomed everyone to the Credit Union s 79th Annual Meeting. 3. Mr. Olsen introduced the members of the Board of Directors present: Frederick Beckman, Frank Cirone, Robert Janish, Robert Lear, and Joseph Spina. 4. Pastor Sadie Bridges offered an invocation and led the group in the Pledge of Allegiance. 5. Pastor Bridges sang God Bless America. 6. Mr. Olsen called members attention to the 2013 Annual Report that they received upon their arrival at the meeting and noted that the report contained the complete text of the minutes of the 2013 Annual Meeting, the Credit Union s financial statement, a combined report from the Chairman and CEO/Treasurer and the Supervisory Committee report. 7. The By-Laws of the Credit Union require a quorum of 15 members at Annual Meetings. Mr. Olsen verified that a quorum was present. 8. Mr. Spina, Assistant Board Secretary summarized the minutes of the 2013 Annual Meeting. Mr. Spina then asked for a motion to approve the minutes of the last Annual Meeting held on May 5, Ms. Ann MacArthur moved that they be accepted as presented in the Annual Report. Ms. Wanda Record seconded the motion and the minutes were approved as printed. 9. Mr. Robert Lear presented the Supervisory Committee s report as included in the Annual Report. He noted that the committee serves as a watchdog for members and provides oversight of external and internal controls for the safety and soundness of members assets. 10. Mr. Lear said that the committee ensures that the Credit Union s policies and operational practices reflect sound judgment and common sense. 11. Mr. Lear said that the Supervisory Committee retained the services of The Curchin Group LLC, a CPA firm, to perform a comprehensive yearly audit of the financial statements. He reported that Atlantic Federal Credit Union received favorable reports resulting from this audit as well as the examination performed by the National Credit Union Administration. He reported that the Credit Union continued to operate in a safe and sound manner during The Atlantic Federal Credit Union 2014 Annual Report 80th Annual Meeting

7 12. In Mr. Michael Fanelli s absence, Mr. Janish presented an overview of the Treasurer s Report as printed in the 2013 Annual Report. He noted that assets declined 5.2% in 2013 to $259.1 million. He attributed approximately half of the decline to members moving funds to the equity market which had a strong year. 13. Mr. Janish said an encouraging sign for the economy and the Credit Union was a $2.7 million or 2.4% increase in loan balances during the year. He said that net income decreased to $397,650. A number of factors contributed to the lower number, he said, noting that the low interest rate environment prompted significant mortgage loan refinancing within the loan portfolio resulting in lower interest income than He said that a spike in mortgage loan delinquencies and foreclosures led to increased funding for loan losses. 14. Mr. Janish said that Atlantic Federal finished the year with a regulatory net worth ratio of 15.3%, a 1% increase over the prior year. The Credit Union s net worth ratio continues to be among the highest in the industry, he said, noting that credit unions with 7% ratios are considered well capitalized. 15. Mr. Janish reported that 78 cents of every dollar earned net of expenses was returned to members in the form of dividends. That compares very favorably to the 59 cents returned by credit union peers. 16. In presenting his chairman s address, Mr. Olsen said that the Board of Directors and senior management spent numerous hours during 2013 creating strategic initiatives that will serve as a blueprint to ensure the Credit Union s future financial viability and improve the overall service experience. 17. Mr. Olsen reported that initiatives planned for 2014 include expanding the functionality of the website, reorganizing staff to better serve members needs and introducing new products and services. 18. Mr. Olsen thanked the members for their years of loyal support and continued patronage. He said that the Credit Union remains focused on continuing to provide members with the highest level of customer service and offering the products and services that meet their needs. 19. He acknowledged the volunteer Board of Directors that gives so freely of its time in setting the strategic direction for the Credit Union. He recognized the Credit Union staff for its hard work and dedication during the year. 20. Mr. Spina, Chairman of the Nominating Committee, introduced the members of the Nominating Committee: Ms. Antoinette Bujega, Ms. Dorothy Kruza and Ms. Ann MacArthur. They submitted the following candidates for vacancies on the Board of Directors all for three year terms: Robert Lear, Donald Olsen and Robert Wilder. 21. Since no other names had been filed with the Secretary prior to the Annual Meeting, Mr. Spina asked Mr. Janish to cast one ballot for the slate, which was done. The motion was passed and the nominees were elected. 22. There being no further business to conduct, Mr. John Neubauer motioned to adjourn the meeting. This was seconded by Ms. Dorothy Manker and was passed. 23. The Annual Meeting adjourned at 1:35 p.m. Respectfully Submitted, Robert Janish, Secretary The Atlantic Federal Credit Union 2014 Annual Report 80th Annual Meeting 6

8 Board of Directors Robert Wilder Chairman Donald Olsen Vice Chairman Mike Fanelli Treasurer/CEO Robert Janish Secretary Fred Beckman Frank Cirone Claudia Johnson Robert Lear Joseph Spina Supervisory Committee Russell Hovland Chairman Amato DiLauro William Kennedy 7 The Atlantic Federal Credit Union 2014 Annual Report 80th Annual Meeting

9 SUPERVISORY COMMITTEE REPORT Your Supervisory Committee, an independent body of volunteers, is mandated by the Federal Credit Union Act and serves as a watchdog for the members of the Atlantic Federal Credit Union. The Committee provides oversight of external and internal controls for the safety and soundness of members assets and must insure that the Credit Union s policies and procedures reflect sound judgment and common sense. The Committee is appointed by the Board of Directors from among members of the Credit Union. The Committee provides for an annual certified audit of the Credit Union s financial statements and has a continuing responsibility to ensure that the Credit Union s financial records and operations are in order. In order to meet its responsibilities, the Supervisory Committee, with the approval of the Credit Union s Board of Director s, has retained the services of The Curchin Group LLC, a CPA firm, to perform a comprehensive yearly audit of Atlantic Federal s financial statements. The results of this audit and the periodic examination of your Credit Union by the National Credit Union Administration together with other supplemental internal audits and reviews conducted by the Supervisory Committee are reported to the Credit Union s Board of Directors as they are completed. Your Supervisory Committee is pleased to report that these audits and examinations have confirmed the fiscal soundness of the Credit Union, which continues to operate in a safe and sound manner. The assets of the Credit Union are properly safeguarded, and the books and records are an accurate accounting of the assets, liabilities and capital of the Atlantic Federal Credit Union. Respectfully Submitted, Russell Hovland, Chairman Atlantic Federal Supervisory Committee L-R: William Kennedy, Russsell Hovland, Amato DiLauro The Atlantic Federal Credit Union 2014 Annual Report 80th Annual Meeting 8

10 BALANCE SHEET DECEMBER 31, 2014 AND Assets Loans to members, less allowance for loan losses $ 119,254,776 $ 115,574,803 Investments 120,478, ,657,434 Cash and cash equivalents 7,218,521 7,593,620 Share insurance fund 2,100,319 2,217,899 Furniture and equipment less depreciation 924, ,212 Other assets 3,776,746 3,227,841 Total Assets $ 253,754,047 $ 259,100,809 Liabilities & Equity Accounts payable and accrued expenses $ 894,004 $ 769,833 Shares and other member deposits 215,207, ,018,096 Retained earnings, substantially restricted 37,652,169 31,312,880 Total Liabilities & Equity $ 253,754,047 $ 259,100,809 INCOME STATEMENT Years Ended December 31, 2014 and Operating Income Income from loans $ 5,250,009 $ 5,075,014 Investment income 3,244,874 3,403,541 Other income 1,434,842 1,406,388 Total Income $ 9,929,725 $ 9,884,943 Operating Expenses Compensation and employee benefits $ 4,164,800 $ 4,077,620 Office operations 1,198,325 1,096,381 Professional and outside services 1,082,828 1,001,334 Provision for loan losses 521, ,650 Other 1,490,357 1,385,761 Total Expenses Before Dividends $ 8,458,238 $ 7,938,746 Income from operations before dividends $ 1,471,487 $ 1,946,197 Dividends paid 1,112,876 1,371,172 Net Income From Operations $ 358,611 $ 575,025 Extraordinary Charges Special stabilization fund assessment $ 0 (177,432) Net Income $ 358,611 $ 397,593 9 The Atlantic Federal Credit Union 2014 Annual Report 80th Annual Meeting

11 Leading the Way in Serving Our Community Atlantic Federal staff accepted the ALS Ice Bucket Challenge in August. With a matching donation from the Credit Union, $500 was raised for the cause. Throughout the year, the Credit Union attended numerous community fairs in Union and Essex Counties. Besides being fun events with adults spinning our prize wheel and kids enjoying pop up Frisbees, we showcased our products and services. The weather cooperated and a crowd turned out for the June grand re-opening event to celebrate our redesigned Kenilworth lobby. The day was filled with popcorn, ice cream, music, Enterprise cars and a visit from the NJ radio prize team. In our lobby, attendees tried their luck in unlocking treasure chests to win a 50 TV, Xbox One, ipad Air or a Visa gift card. Dan Czerniawski, right, our chief operating officer, appeared on NJTV s One-on-One show with Steve Adubato to discuss consumer banking issues including credit scores, debt, bankruptcy and budgeting. For Miracle Jeans Day, our staff wore jeans and made donations that were matched by the Credit Union to Children s Specialized Hospital in Mountainside, the local Children s Miracle Network hospital. Front left, Janet Maghan, human resources manager, presented a $1,000 check to Nicole Filmino of Children s Specialized Hospital. A closet full of prom dresses donated by our staff was delivered to Newark s Barringer High School to help attire prom goers. We learned of their need during the Reality Fair we hosted in April at the school. The fair taught students budgeting skills in a fun, real-life simulation. The Atlantic Federal Credit Union 2014 Annual Report 80th Annual Meeting 10

12 Phone: (908) Fax: (908) Main Office: 37 Market Street Kenilworth, NJ Branches: Newark Elizabeth Atlantic Federal supplements the federal NCUA insurance with an additional $250,000 coverage from ESI, the nation s leading private insurer.