enhancing lives annual report 2010 enhancing your life sm

Transcription

1 enhancing lives Y esterday. To day. To m o rrow. annual report 2010 enhancing your life sm

2 Yesterday. Today. Tomorrow. Message From The President and CEO Marc Schaefer Our mission dictates that our success metrics are weighed on the scale of improvement in our members financial lives. Truliant did not engage in the behaviors that brought the U.S. financial system to its knees in , requiring massive government and taxpayer intervention to allay. For example, for decades we ve consistently made mortgage loans that made sense for our members, loans that reflect their ability to repay while building their financial foundation. We didn t encourage and enable our members to become swamped with debt that they could not repay if there was an economic downturn. As a result, Truliant is well capitalized, recording comparatively low loan losses and growing. While the loss of jobs, income and asset values that resulted from the financial crisis did significantly impact our members, Truliant was there to assist them with their personal financial picture through the downturn and provide the basis for recovery. Over and over again, Truliant s staff leveraged the advantage of the low interest rate environment to reduce the cost of financing cars, homes and necessary expenses in order to benefit our member households. The savings were then used, in many cases, to cover loss of income or pay down debt and build for their future. Our trained staff, exemplifying their commitment to our mission, improved members financial lives through our TruFinancial Checkup Planning process, our No-Cost Credit Review and a careful one-on-one analysis of genuine member needs. Truliant was rewarded for our unwavering commitment to our members best interests by the growth in savings and investments, as well as growth in loans of all types. Our member-focused metrics translate into more than 99,600 TruFinancial Checkups where we discovered more than 158,000 specific needs and met over 111,000 of them. We helped over 14,940 member-owners purchase vehicles, provided home financing for more than 660 member-owners and helped more than 50,200 memberowners open new savings accounts to save for their future. We created greater convenience for our members who paid more than 773,200 bills online, saving them time and money. Our online banking usage grew to more than 72,900 members, which is over 40% of our membership. We increased our online bill pay users to more than 24,150. We provided a state of the art personal financial management tool for budgeting and expense control (FinanceWorks) and more than 13,280 memberowners are currently using this to track their progress and drive towards their individual financial objectives. We provided two new mobile access services with adoption by over 7,100 member-owners. For our small business members, we developed and implemented the Small Business Administration Micro and 7a programs. The numbers above do not reflect the fact that Truliant did not push financial products on our members when they did not have a genuine need. Members reaffirmed their awareness of this difference in our 2010 Member Satisfaction Survey; 53% of respondents indicated that Truliant had their best interests at heart compared to 33-40% ratings when customers of large banks are asked if their provider does what s best for me, not just its own bottom line. In spite of the distractions of a volatile economy, seventeen companies became new Business Partners adding Truliant as an employee benefit for 1,872 of their staff. In addition to serving our member-owners, Truliant recognized an even greater responsibility to support our communities in difficult economic times and examples of this commitment can be found in the Community Service section of this report. It is disappointing that, in trying to fix the faults that were perceived to cause the financial crisis, policy-makers have created additional burdens and costs that will be borne by Truliant member-owners. These policies come in the form of well-meaning but misdirected regulation of products, pricing and information that assumes Washington knows how to communicate with and serve our members better than our volunteers and staff. They assume that even member-owned credit unions do not have their members best interests at heart and so they must prescribe, in detail, the language and terms of service. In addition, policy-makers have determined that they will set the price for certain payment systems and convenience services. We will work diligently to try and minimize the impact on Truliant and to convince policy-makers that member-owned, community-based credit unions do more good when not overburdened by unnecessary regulation. We may ask for your help in the year ahead by having you express your views on how Truliant has served you and what value that has added to your financial life. Truliant s governance system is a democracy operating within the democracy of the U.S. government. From time to time, we have to let our views be known to preserve our right to receive the benefits of the organizations we value. Management is appreciative of the hard work that our Volunteer Board, Associate Directors and Supervisory Committee put in during this year in representing the membership. Truliant is fortunate to have these committed and qualified volunteers who represent the best of how the credit union model should function as a collaborative effort to serve the membership. Most importantly, we appreciate the confidence of our 900+ Business Partners and 180,000+ member-owners have placed in Truliant as you allow us to serve you. Truliant moves into the next decade with a clear and consistent purpose, a set of shared values that hold the members financial health as preeminent and a track record of delivering on our mission.

3 Message From The Chairman Greg Thrush As we reflect upon last year, many Americans were hopeful and optimistic that the economy would recover. Despite showing some positive signs, many families continued to struggle in The economic impact continued to cause a loss of jobs and those returning to work may have found themselves earning less, resulting in lifestyle adjustments and even causing some people to lose their homes. While many financial institutions put their own interests first, Truliant continued to stand by our philosophy that our member-owners come first. We won t lend more money for a home than the home buyer can afford. We make every effort to find an alternative to foreclosure when a member-owner faces a financial hardship. Throughout the year, Truliant helped many members stay in their homes by restructuring and refinancing their debt and positioning them for a brighter financial future. Committed to our mission of enhancing the lives of our memberowners, Truliant provided a better banking alternative for consumers, which led to a successful year. While many financial institutions pulled back, limited operations and foreclosed on many of their customers mortgages, Truliant maintained a strong presence in the lending arena and continued to offer competitive rates as well as innovative products and services. Due to the economic turmoil over the past few years, financial institutions are concentrating on building strategies to improve customer relationships. Truliant never stopped concentrating on member service. We have always based our business model on putting member-owners first, while a lot of financial institutions focused on quarterly earnings and increasing shareholder value. We don t have shareholders, so our success isn t measured by profits or returns, rather by how successful our member-owners are in reaching their unique individual financial goals. Each member-owner is different and in varying stages of their financial lives and that s how we approach each and every transaction. We also understand that needs and goals shift from person to person, which is why we focus on matching the right product and service to the individual or family. This year, legislative regulations will continue to threaten the ability of Truliant and other credit unions to easily deliver on the cooperative philosophy of people helping people and our ability to effortlessly meet our mission of improving the lives of our member-owners. In order to counter negative regulatory reform on credit unions, we may need to call on our member-owners to assist us in our lobbying efforts. Your efforts have helped persuade legislation in the past, which ultimately kept the credit union model strong, and can help in the future will also continue to present challenges for the economy, but for the first time in a few years we can refer to it in terms of recovery. According to a January 2011 Gallup poll, economic confidence is at a three-year high. As we head into the new year, people have a slightly more positive outlook on the economy and their own financial situations. As optimism flourishes, we look forward to showcasing our stability, vitality in the market and our unwavering focus on serving our member-owners to enhance their lives. On behalf of the Board of Directors of Truliant Federal Credit Union, I would like to thank our employees and each of you for continuing to look to Truliant to enhance your life by improving your financial well-being. Truliant helped us with the upfit cost to move to our new location in Downtown Winston-Salem. Mike Rothman, Owner, Skippy s Hot Dogs Truliant gave us the opportunity to expand our business store from one to multiple stores. I think it s one of the best service centers for our business needs. Sundeep S. Makhani, Hunar Foods LLC (DBA Dunkin Donuts)

4 About Truliant Message From The Supervisory Committee Primary responsibility for the Credit Union s financial reporting and internal operating controls is vested in the Board of Directors and in senior operating management as overseen by the Board. The Supervisory Committee, composed of a chairperson and up to four committee members, is a standing Committee of the Board established to assist the Board in fulfilling its statutory and fiduciary responsibilities. The role of the Supervisory Committee is to assist the Board of Directors in fulfilling its oversight responsibilities for (1) the integrity of the Credit Union s financial statements; (2) the Credit Union s compliance with legal and regulatory requirements; (3) the independent auditor s qualifications and independence; and (4) the performance of the Credit Union s internal audit function and independent auditors. To that end, the Supervisory Committee contracted with Clifton Gunderson LLP to conduct the Credit Union s 2010 annual audit. Results of the audit indicate that the financial statements present fairly the results of the operations and financial position for the period, and no material weaknesses in internal control were reported. In addition to its external audits and regulatory examinations, the Credit Union also employs a full-time Internal Audit department which reports directly to the Supervisory Committee. Thomas G. Harding Chairman, Supervisory Committee After dealing with banks all my life, moving my business accounts and financing to Truliant has been a breath of fresh air. I wish I had done it sooner. Drew Parker, Separk Music Company Inc. Truliant Federal Credit Union is a not-for-profit cooperative that provides affordable financial services to over 180,000 member-owners and more than 900 employers and their employees. The mission of Truliant is to enhance the quality of life of our member-owners and to become their preferred financial institution. Truliant s members are owners of our organization; the benefits they receive are a result of their ownership in the Credit Union. Truliant s philosophy begins and ends with understanding and meeting member needs. Memberowners are at the forefront of all decisions made. As a result, Truliant offers a full array of financial services, including low-rate consumer loans, high-yield savings programs, systematic savings and investments, financial planning and counseling, free checking options, online services and 24-hour ATMs. For the past 58 years, Truliant has been an important contributor to the local economy and is dedicated to serving the communities in which we operate. We provide financial education seminars, including debt management, budgeting, home buying and many more.

5 Community Service Community service is an essential part of Truliant s mission of enhancing the quality of life of our members. Since 1952, Truliant has helped thousands of people build financial success, and through our service programs, we continue to give back to the communities where we operate by: n Volunteering over 2,800 hours of our time and talents to nonprofit organizations in 2010 n Conducting financial and entrepreneurship education and counseling n Providing funds for community causes through grant-making, charitable contributions and sponsorships Staying true to our founding philosophy of people helping people, Truliant employees give of their time to prepare taxes for low to moderate-income people in Forsyth County each year. They collect and distribute school supplies to schools with low-income students, and collect food for the food bank and supplies for the needy. Employees also volunteer on a number of community boards, fundraisers and speaking engagements. Continuing in our tradition of active participation in community events, Truliant remained a steadfast supporter of the American Cancer Society s Relay for Life and Second Harvest Food Bank in our key markets. We broke previous records in the United Way Fundraising Campaign for The Credit Union also supported the March of Dimes, Harvest of Hope, Boy Scouts of America, Brenner Children s Hospital, Arts Council of Winston-Salem and other similar initiatives designed to help our communities. We support financial education because it fosters financial stability for individuals and for entire communities. The more people know about personal financial management, the more likely they are to increase savings, buy homes and improve their overall financial health and well-being. In October 2010, the first student-run, full-service credit union powered by Truliant was launched at the East Forsyth High School in Winston-Salem. It was created to educate students about professional and financial responsibility. Located at the high school, classmates can conveniently deposit checks, withdraw money, open an account and even apply for an auto loan, while Finance Academy students process the transactions. In the same year, we also served over 500 students from elementary school-age to adults with financial literacy and entrepreneurship education initiatives. Through our BALANCE Financial Fitness Program, 1,251 memberowners were counseled on credit, homeownership, debt management and budget issues. Our grant-making has allowed us to form community partnerships with many nonprofit organizations. We partnered with the following grant recipients to provide entrepreneurship training to over 100 participants last year: Burlington Development Corporation, Martinsville West Business Development Corporation and East Market Street Development Corporation. Sponsorships with the Hispanic League, Communities In Schools and Holy Trinity Lutheran Church, to name a few, helped us expand our reach to make more people aware of our affordable financial services and the community support that we give to enhance the lives of our member-owners.

6 enhancing your life sm Serving 180,000 member-owners and more than 900 business partners. The key to Truliant s success is living our mission to improve the quality of our member-owners financial lives and have them view the Credit Union as their primary financial institution. Yesterday. Today. Tomorrow.

7 TRULIANT FEDERAL CREDIT UNION AND SUBSIDIARY enhancing your life consolidated statements of FINANCIAL CONDITION sm As of December 31, 2010 and 2009 ASSETS Cash and cash equivalents 97,653,600 86,853,700 Investments 86,578, ,310,700 Loans to members, net of allowance for loan losses 1,119,772,700 1,047,903,300 Premises and equipment 47,658,900 46,591,800 NCUSIF deposit 11,355,700 10,960,100 Other assets 39,044,200 34,766,000 Total assets 1,402,063,800 1,340,385,600 LIABILITIES AND MEMBERS EQUITY Members savings accounts 1,239,937,200 1,174,643,600 Borrowed funds 22,888,900 36,055,600 Other liabilities 25,280,800 20,625,500 Total liabilities 1,288,106,900 1,231,324,700 Members equity, substantially restricted 120,041, ,952,800 Accumulated other comprehensive income (6,084,500) (1,891,900) Total liabilities and members equity 1,402,063,800 1,340,385,600 consolidated statements of INCOME Years Ended December 31, 2010 and INTEREST INCOME: Interest on loans 61,986,400 62,019,500 Interest on investments & cash equivalents 1,702,800 2,409,200 Total interest income 63,689,200 64,428,700 INTEREST EXPENSE: Interest on savings accounts 14,550,100 21,112,400 Interest on borrowed funds 911,600 1,077,200 Total interest expense 15,461,700 22,189,600 Net interest income 48,227,500 42,239,100 PROVISION FOR LOAN LOSSES 12,915,300 14,407,300 Net interest income after provision for loan losses 35,312,200 27,831,800 NON-INTEREST INCOME 25,422,900 25,067,200 NON-INTEREST EXPENSE 51,646,500 55,430,000 Net income 9,088,600 (2,531,000)

8 Truliant Federal Credit Union 2010 ANNUAL REPORT Total Assets 1,500,000,000 Members Savings 1,300,000,000 1,275,000,000 1,125,000,000 1,050,000, ,000, ,000, ,000, ,000, ,000, Loans to Members 1,200,000,000 Net Worth 130,000,000 1,050,000, ,500, ,000,000 95,000, ,000,000 77,500, ,000, ,000, YESTERDAY. TO DAY. TO M O RROW.