preparing for CHANGE 2013 Annual Report Federally Insured by NCUA

Transcription

1 preparing for CHANGE 2013 Annual Report Federally Insured by NCUA

2 chairman s report An end of an era. On December 31, 2013, William R. Hayes, who had been with the credit union since 1979 and the President and CEO since 1990, walked down the stairs and into the garage for the very last time. There was much celebrating during his final month. We had a wonderful retirement party, complete with a surprise appearance from the University of Washington Husky marching band. We gave toasts and made tributes. A few tears were shed. We will certainly miss Bill. He guided the credit union with a firm and steady hand through some of the rockiest financial conditions our generation has ever seen. He did so with skill, kindness and wisdom. We are grateful we had such a talented person at the helm for as long as we did. But as with any ending, it signifies a new beginning. The board was very excited to announce in September the hiring of John Zmolek, who had been a previous board member and the Executive Vice President of Verity for 23 years, as well as the President of Credit Union Home Mortgage Solutions (CUHMS) for 4 years. John brings with him a deep understanding of the credit union, respect of the staff, and an infectious energy to provide the best member service possible. The selection process was extensive, with candidates from around the country. The Board of Directors is proud that an internal candidate rose to the top. We all have the utmost confidence in John moving forward was another strong year for us. Our net income was almost $5.4 million. While the refinance boom slowed mid-year, we were ready to capture consumer loans and we did. Loan delinquencies and charge-offs remained low and our non-interest income continued on a healthy upward climb. The amount of mortgage loans serviced increased to nearly $859 million. The number of credit and debit card transactions increased to $187 million. The number of online transactions performed by our members increased to 58,920. All of these numbers are at an all-time high. Perhaps most importantly, our reserve ratio stayed strong at 9.13%. Verity stands poised for growth in the coming year growth in members, growth in loans, and even growth in mortgages. Much of that is due to the amazing staff, volunteers, and members here at Verity Credit Union. Once again, I thank you all for your commitment to Verity Credit Union. Together we can achieve amazing things today and into the future. Dan Strandy Chair of the Board, 2013

3 2013 president s report As Dan mentioned, 2013 was another stellar year for Verity Credit Union. We saw great success at the beginning of the year as we continued to ride the mortgage refinance wave and as that tapered off mid-year, we were ready with a strong consumer lending position that helped us finish the year as profitably as we began. As Dan also mentioned, 2013 was my last year as the President and CEO of Verity Credit Union. It has been an honor to serve the credit union. I appreciate all of the people I worked with the staff, the board, and most importantly, the members. I will hold dear all of the relationships I have developed since I began my career at Verity in I am most proud of services we were able to offer our members: loans to help them realize their dreams, a safe place to grow their savings, convenient ways to access their money, and a staff that provided exceptional member service. Being part of a credit union is being part of something bigger than ourselves. It is people helping people. I was fortunate to witness that for the better part of my career. I hope you realize that being a part of Verity, whether you work here, volunteer here or are a member here, is something extraordinary. I want to thank everyone who made my career at Verity special. I will miss everyone and I wish you all the very best. William R. Hayes President and CEO (2013) We move into the future in great financial and operational condition. We are well positioned for our next challenges. I have the utmost confidence in John Zmolek. He and I worked closely for over 20 years. I know he is incredibly intelligent, thoughtful, wise and capable. He holds the respect and loyalty of our staff. He also has an exceptional executive management team. He will do a fine job for Verity, our members and our community.

4 president s report Verity Credit Union is a great place a great place to work and a great place for our members to build a strong and secure financial future. I am honored and excited to step into the role of CEO of this vibrant company. As Bill said in his letter, Verity Credit Union is in fantastic financial and operational condition. The future promises a lot of challenges, but we are well-positioned to meet those challenges and grow even stronger. I want to add my deepest gratitude for Mr. Hayes long service to Verity Credit Union. He has been a fantastic boss, mentor and friend for over 20 years. Because of his leadership and mentorship, I feel well-prepared to lead Verity Credit Union on to a bright future. It is my hope that I will get the chance to meet or talk with many of you over the coming years. This is your credit union, so please do not hesitate to share with us your ideas about how we can become even stronger and even more exceptional. Here s hoping that we all have a great John Zmolek President/Chief Executive Officer During the CEO interview process, I turned frequently to our mission statement, Enhancing Members Lives through Exceptional Financial Services, for inspiration. It is a powerful mission. My pledge to you is that our staff will strive each and every day to fulfill that mission.

5 supervisory committee statement Operating as your credit union representative, the supervisory committee is accountable for determining that each area of the credit union is carrying out the plans, policies and procedures for which it is responsible. The committee fulfills its responsibilities by attending meetings and performing audits of the operations, accounting records and internal controls at Verity. Our annual audit performed by a certified public accountant along with the examination by state examiners shows that Verity Credit Union is in compliance with all applicable state and federal regulations and is in sound financial shape. Scott Larson Chair BOARD OF DIRECTORS Dan Strandy Chair Erin Hass Vice Chair Steve Andersen Treasurer Karen Hunt Secretary Rodolfo Hurtado E. Laird Hansen Dan Young Anthony Kusske Benjamin Lundell BOARD ASSOCIATES Marjean McCraw Lizzie L. Evans Zachary S. Gose SUPERVISORY COMMITTEE Scott Larson Chair Mary Sevilla Vice Chair John Carpenter E. Laird Hansen Zachary S. Gose EXECUTIVE MANAGEMENT William R. Hayes President/Chief Executive Officer John Zmolek Executive Vice President Sherry Steckly Senior Vice President/Chief Operating Officer Shari Storm Senior Vice President Greg Bruns Vice President/Chief Financial Officer Justin Martin Vice President/Chief Human Resource Officer Sarah Slonsky Vice President/Lending Officer

6 2013 was a very big year for Verity. After more than 20 years at the helm, our CEO, Bill Hayes, was getting ready for retirement. That meant that our board of directors was in for the incredibly important task of selecting a new leader for Verity. However, day-today operations didn t stop, and we had a record-breaking year with a lot of great changes and improvements. In addition to the announcement of our new CEO, John Zmolek, here are 10 great things we are proud of from the last year: POINTS ON PLASTIC Our Journey Gold credit card has given our members the ability to earn points to redeem for travel and merchandise for years. In 2013, we converted to a new platform with better reward options for our members, including Visa gift cards (our version of cash back). The most exciting addition is that our members can now earn points on their debit cards! Anyone who also has a Journey card gets the added benefit of their points automatically combining so they accumulate even faster. Members have provided lots of positive comments about the new Points on Plastic program and let us know that they really love their new options. SPIRIT OF COLLABORATION Credit unions have a set of operating principles that we all adhere to, and one of those principles is cooperation among cooperatives. Verity is a partial owner of multiple organizations with other credit unions that help us offer better services at a lower cost. These include the Puget Sound Business Lending Group (created in partnership with Harborstone Credit Union) and CU Home Mortgage Solutions (CUHMS). Verity started CUHMS in 2008; in 2013, CUHMS continued to expand, and now serves 14 credit unions and 180,000 members. Verity sold partial ownership in CUHMS to Harborstone in In 2013, CUHMS also obtained the ability to add partner credit unions from Oregon and is working on adding Idaho next. THE VERITY EXPERIENCE Did you know that Verity puts on classes at our headquarters building in Northgate throughout the year? Many of these classes are free and open to the public. These classes help us to fulfill another operating principle of ongoing education. During 2013, hundreds of participants learned about improving their small businesses, social media, being better public speakers and much more. There are classes every month; want to see what is coming up soon? Visit veritycu.com/experience to learn about all the upcoming classes. EARN, SAVE, ACCESS, SECURE Verity has been serving members in Washington state since 1933, and we love providing our members with great products and services that can help them live stronger financial lives. To understand the value of each of our products and services better, we combined them into categories of how they benefit our members. All of our current products and services are classified by how they help our members to earn more money, save money, access their money, or secure their money. These are the guidelines we will use to launch future products and services as well. We always seek to help our members earn, save, access, or secure their money. BEST PLACE TO WORK We were proud to be named a Best Place to Work in 2013 (#3 on the nonprofit list) by Seattle Business Magazine. This contest recognizes companies in Washington that are setting the standard for leadership, strong benefits, best work environment, innovative training programs and happiest employees. This is not the first time Verity has made

7 the list, and we have plans to keep innovating so the trend will live on (we are already a finalist in 2014). One of the things that makes this accomplishment even better is that it is based on employee feedback. SOCIAL IMPACT Another of the international credit union operating principles is social responsibility. To help us meet this goal, Verity leveraged our incredibly successful Verity Mom program to hold a Cartwheel for a Cause contest. In this contest, people nominate causes that are important to them and that they feel deserve $5,000. They submit video entries and advocate for votes. This year the winner got $5,000 for their cause and $1,000 cash; 2nd and 3rd place each got $1,000 for their cause and $200 in cash was the second time we held the contest. We had 56 entries and over 18,000 votes from around the community. We were so overwhelmed by the amazing entries that Verity donated $100 to each of the 53 causes that submitted a video and didn t make the top three. Each of the winners donated their extra cash back to their causes, helping to leverage our dollars even further. 3RD WEDNESDAYS If you frequent our branches, you may have noticed that we started opening late on the 3rd Wednesday of every month. Why? This provides us with an opportunity to train all of our branch staff on a regular basis. The meeting helps to ensure that our staff are trained and knowledgeable about all of the great promotions, products and services Verity has to offer so they can provide you with the best possible service. LOAN GROWTH One of our big goals at the credit union in 2013 was to revitalize our consumer lending and increase the number of loans people have with us. This is important to us because we like to put our money to work by helping members buy cars or obtain a home. We made several changes, including adding bicycle loans, revamping back-end processes and providing more education to our staff. The result? We had a record breaking year for loan growth, which will help us to be a strong and healthy credit union for you. NEW MEMBERS Another important goal for us in 2013 (and beyond) is to grow our membership. Membership growth gives us a bigger pool of people to serve and helps to get our name out there in the community even more. Growth in members is also key to helping us grow our loans (outlined in the previous section). We made many efforts to grow our membership in 2013, one of the most prominent was our 10 for 10 certificate promotion in May. We average new members each month, but were able to bring on 750 members during this month long promotion, which we considered a great success. Verity is constantly looking for new ways to improve our products, services and offerings and will continue to do so into the future. We look forward to the opportunity to continue to serve our members in this ever-changing world. Regardless of the transitions we face, Verity will always focus on doing what is in the best interest of our membership. MOBILE UPGRADE Our members have been asking for the ability to deposit checks on their mobile phone for months. We are so pleased that our last upgrade to Mobile Banking has allowed us to offer this great service. There are many ways we know that offering this product was a great decision one is that even before we even announced the upgrade was complete, two members made mobile deposits. Since that time, hundreds of checks have been accepted via mobile deposit, eliminating trips to the branch or an ATM.

8 financial report income and expense statement Fiscal Year Ended INCOME Interest Income on Loans Investment Income Other Income Total Operating Income Other Non-Operating Gains (Losses) GROSS INCOME EXPENSES Operating Expense (salaries, supplies, building, postage, telephone, tax & ins.) Provision for Loan Loss Interest on Borrowed Money Dividend Expense TOTAL EXPENSES Net Loss - Noncontrolling Interest NET INCOME FOR YEAR 14,883,131 1,610,488 10,670,980 27,164,599-22,406 27,142,193 20,051, , ,659 1,342,403 21,821,160-14,223 5,335,256 15,265,325 1,546,637 10,634,855 27,446,817 26,977 27,473,794 17,471,407 2,604,782 1,150,885 1,651,036 22,878, ,595,684

9 financial report balance sheet Fiscal Year Ended ASSETS Cash on Hand Loans, Notes, Contracts Rec. Investments (Incl. NCUSIF) Property & Equipment (net) Accrued Interest on Loans & Investments Other Assets* 17,983, ,527,082 91,414,528 9,245,972 1,145,509 13,921,786 16,866, ,094,015 84,791,789 8,818,847 1,174,014 9,986,776 Assets investments loans other TOTAL ASSETS 427,238, ,732,176 LIABILITIES Notes Payable Dividends Payable Accounts Payable & Other Liabilities 25,937,700 25,649 6,140,001 16,037,700 31,635 5,669,003 TOTAL LIABILITIES 32,103,350 21,738,338 MEMBERS EQUITY Shares (Including Business, HSA, IRA) Share Certificates Share Drafts Money Market 98,965,455 71,711, ,674,988 78,143,266 91,585,184 76,470,763 95,153,555 77,790,386 TOTAL MEMBERS EQUITY 358,495, ,999,888 RESERVES Regular Reserves Investment Valuation Reserve Undivided Earnings Noncontrolling Interest 5,565,164 (2,518,374) 33,007, ,777 5,565, ,747 27,672,040 0 TOTAL RESERVES 36,639,863 33,993,951 TOTAL LIABILITY, EQUITY, & RESERVES 427,238, ,732,176 NET INCOME FOR YEAR 5,335,256 4,595,684 *Other assets includes loans held for sale, NCUSIF deposit

10 locations BRANCH LOCATIONS Verity Credit Union P.O. Box Seattle, WA (206) Alderwood Branch rd Ave W Lynnwood, WA Auburn Branch 1424 Outlet Collection Way, #200 Auburn, WA Beacon Hill Branch 1660 S Columbian Way, Bldg 35 Seattle, WA Federal Building 915 2nd Ave, Room 290 Seattle, WA Member Services Northgate Meridian Ave N Seattle, WA Wallingford Branch 4545 Stone Way N Seattle, WA OTHER SERVICES Investment Services (206) (800) ext 5312 Home Loan Center (206) (800) ext 5320 (206) for servicing ONLINE LOCATIONS veritycu.com corporate website blog.veritycu.com Our Voices blog spendsavelive.com financial education blog facebook.com/veritycu Twitter pinterest.com/veritycu Pinterest For free ATM and Shared Branching locations, visit veritycu.com/locations Federally Insured by NCUA