Credit Union of Colorado 2011 Community Involvement

Transcription

1 2011 ANNUAL REPORT

2 Credit Union of Colorado 2011 Community Involvement Through our common bond as members of Credit Union of Colorado, we are, in a sense a community. We invest in each other. And that makes us different than customers of banks, whose owners often extend community investment only as far as the regulators require. We know that our Credit Union community is only as strong and as vibrant as the broader community in which we live. So that s why, for us, it s important that we not only reinvest in the Credit Union but in that broader community, as well. Our communities are the sum of many parts. They are interlaced, and as the cover of this Annual Report suggests, defined by their commitment to provide a secure, healthy and vibrant future for their children and the generations that will follow. That s why one of our main priorities is to focus our community support on youth sports and recreation programs: As a proud partner of Colorado Ski Country USA, we sponsor its Passport program, providing free skiing for fifth graders and inexpensive skiing for sixth graders. Youth sports teaches teamwork, breeds self-confidence, boosts fitness and engenders friendships. That s why we sponsor youth soccer, volleyball and other programs through the YMCA, Colorado Rapids and various recreation districts. We know education is important too. In 2012, we will launch the Credit Union of Colorado Foundation, which will include a college scholarship program. This year we held a Shred-a-Thon in three cities to support scholarships for students at Colorado community colleges. Our emphasis on youth programs does not prevent us from investing in our community in other ways, too. We support family friendly events such as the Mike the Headless Chicken Festival in Fruita, the Dog n Jog event in Grand Junction and the Independence Day festivities in Thornton. Your membership in our Credit Union means that you are helping us make sure our communities are a great place to live and prosper. That s a commitment that we will always take seriously. WE SUPPORT FAMILY FRIENDLY EVENTS SUCH AS THE INDEPENDENCE DAY FESTIVITIES IN THORNTON

3 Board of Directors Report Dr. Will Fleckenstein, P.E., Chairperson Financial strength. Clear focus. That s the picture of good health for any financial institution. So our Board of Directors was proud to learn that after a complete and thorough review by a team of regulators, that s how they described Credit Union of Colorado. We are financially strong and secure, and we are clearly focused on the financial health of our members and the communities where they live and work. Our members have known that for years, but an amazing thing happened all across the country in People began to notice the difference between the way that banks treat their customers and how credit unions treat their members. Instead of just resigning themselves to rising fees and hidden charges, bank customers began closing their accounts and opening new ones at a credit union. As a result, our membership and deposits grew. The feedback we got from member surveys was overwhelmingly positive, and we know from personal contact with members at our branches that they like our style. Bottom line is that when members join Credit Union of Colorado they feel connected. Headless Chicken Festival in Fruita, the Dog n Jog event in Grand Junction and the Fourth of July festivities in Thornton. Being connected is also what drives our Board of Directors to serve. Our connection to our Credit Union runs deep. We believe strongly in our mission. We understand that our job is to make sure that as an organization, we always stay connected to that mission. And the best way to do that is to act responsibly with one goal in mind: the financial health of our members, our institution and our communities. We are proud that in a difficult economic environment, we ve been able to help our Credit Union grow and thrive. As we look toward the year ahead, we remain financially strong and clearly focused. Now that s a picture we can all appreciate. That connection is the key to how we do business. We treat our individual members like family, and we establish deep connections in the communities that we serve. This year, those connections became stronger than ever before through our support of Metro Denver YMCA youth sports programs, the Colorado Rapids and youth sports leagues in Parker, Arvada and Cañon City. We supported Colorado Ski Country, held a day of recognition for Colorado state employees, and organized shred-a-thons to raise money for Colorado community colleges. We even sponsored the Mike the IN 2012, THE CREDIT UNION OF COLORADO FOUNDATION WILL INCLUDE A COLLEGE SCHOLARSHIP PROGRAM.

4 Treasurer s Report JoAnn Vondracek, Secretary/Treasurer In 2011, despite another lethargic year for loan demand, we began to see the first signs of an economic thaw. Overall, it was an encouraging year. Unlike 2010, when total loans fell, we had a slight uptick in That was welcome news, however it was not enough to stay apace of deposit growth. The savings growth rate outpaced loan demand, continuing to leave more liquidity than we would like. We would rather lend those funds than invest them. Highlights of 2011 compared to 2010: Total assets grew by $42.8 million, up 4.5% (compared to.5% in 2010) Loans grew by $10.8 million, up 2.1% (compared to a 3.4% decrease in 2010) Deposits grew by $33.7 million, up 4.1% (compared to a.3% increase in 2010) Loan losses were.79% of the average total loan portfolio (compared to 1.30% in 2010) The number of members grew from 89,000 to 91,000, putting us in fifth place for all Colorado-based credit unions. Net worth: Most important as a measure of our financial strength is net worth, the earnings we have retained since inception. These retained earnings are our cushion against potential future losses. At year-end our net worth was just short of $116 million, up 7.4% compared to $108 million in As a percentage of assets, our net worth was 11.7% compared to 11.4% in That continues to place us among the upper level of credit unions nationally, far exceeding the 7% required by the NCUA to be rated as a well capitalized credit union. We ended the year pleased to have fared so well in a still-challenging economic climate, and to have retained a solid base of financial strength. Let s hope the thaw we noted in 2011 translates into a steady economic stream in YOUTH SPORTS TEACHES TEAMWORK, BOOSTS FITNESS AND ENGENDERS FRIENDSHIPS.

5 Credit Officer s Report Connie McCann, Credit Officer Whatever the endeavor, there are usually two ways to measure your performance against your peers and competitors, and against your own goals. By either standard, in 2011 our Credit Union had a measurably strong, improved year. At year-end, we had achieved an optimal balance of performance, with loans increasing and charge-offs and delinquencies dropping. Looking at our own expectations for loan growth, given the languishing economy and consumer reluctance to take on more debt, we had projected no growth at all. Instead, unlike 2010 when our loan totals dropped, we forged ahead with a 2.1% loan increase. That was thanks to our successful Visa credit card program, used-auto lending, and members motivated by historically low interest rates to refinance their mortgage loans, often going to a shorter term. The delinquency ratio dropped from 0.71% in December 2010 to 0.61% in December This compares to 1.59% for all credit unions nationally, according to the latest CUNA research available (September 2011). The charge-off ratio fell to.79% in 2011 compared to 1.30% in 2010, when examiners requested that credit unions apply unusually conservative charge-off standards. Our 0.79% charge-off ratio compares to 0.92% for all credit unions according to NCUA September 2011 research. While some of the credit for the reduced charge-offs and delinquencies is attributable to slightly improving economic conditions, our centralized underwriting approach adopted two years ago and applied by our hard-working, diligent staff, has had much to do with it, too. Equally important, our more consistent, stronger underwriting standards have streamlined and sped up the borrowing process for our members. Supervisory Committee Report Ron Hinton, Chairperson It is our privilege and responsibility as members of the Supervisory Committee to oversee Credit Union operations and make sure that we have the procedures and policies in place to safeguard the assets of our members. As you may be aware, in the past two years that responsibility has become more challenging. In 2010, given the turmoil in much of the financial services industry, as well as the penchant for some banks to operate with little regard for the consumer s best interests, there was a growth in regulations that affected all financial institutions, regardless of their track record. We were all, as the saying goes, painted with one brush. Those regulations have not gone away, and the time-consuming, sometimes onerous challenges of compliance throughout the Credit Union continue to make our committee s loan oversight role more important and more complex than ever. Despite those challenges, the Credit Union in 2011 was able to successfully comply with all the rigorous new regulatory standards now in place. There are no significant deficiencies to report. On behalf of the committee, I want to express our gratitude to the external accounting firm of Orth, Chakler, Murnane & Company, CPAs. This firm examines and tests our internal audit controls and provides us with an opinion audit regarding our financial statements to confirm that they are prepared in accordance with generally accepted accounting principles. THAT S WHY WE SPONSOR YOUTH SOCCER, VOLLEYBALL AND OTHER PROGRAMS THROUGH THE YMCA.

6 Management Report Terry Leis, President/CEO Community is everything. If we are part of a community we are connected to something bigger and more important than ourselves. We belong. Being part of a community means caring for that community as well. At Credit Union of Colorado, we took that notion to heart this past year. We sponsored more organizations and more events in more places than ever before. But for us, supporting the community is more than just sponsoring events. It really is about supporting our community of members by providing the services and products that make their lives easier and their financial health more secure. A good example of that is our SimpleSaver program, which we implemented in Each time a member makes a debit card transaction, we automatically round up the transaction to the nearest whole dollar amount. Then the rounded-up amount is transferred to an interest-bearing savings account. It s like tossing your change into a jar at the end of the day, only now the money is earning interest compounded daily. Another way we help is by issuing debit cards when members open their checking accounts. Instead of making them wait a week or more to get their card in the mail, our members can walk out of the branch with their new card in hand and begin using it immediately. This year we gave our online banking platform a facelift. We added more features and made it easier to navigate. Now it s more user friendly and it looks better too, so members will be more likely to use it. That means less paper for us, and more convenience for our members. Speaking of convenience, we completed construction on our new Colorado Springs branch office, which will celebrate a Grand Opening in March The new office replaces our old location and features three teller lines, three drive-up lanes, and safe deposit boxes. In an economy where nobody expected to see growth anywhere, our loan portfolio grew by 2.1 %. That s an indication of our deep roots in the communities we serve. Our goal is to help them prosper, and that s our reward as well. It s been that way since we were founded in 1934 and it will remain that way as long as we are in business. Our Credit Union of Colorado family is our community. Our members, volunteers and staff understand that without community, each of us is a little less complete. We hope that in 2012, we can continue to expand the ways we connect with our community so that all of us can enjoy health and prosperity in the year ahead. WE SPONSOR CSCUSA S PASSPORT PROGRAM, PROVIDING FREE SKIING FOR FIFTH GRADERS AND INEXPENSIVE SKIING FOR SIXTH GRADERS.

7 2011 Financial Report Credit Union of Colorado Statement of Financial Condition Assets Loans $532,860,811 $522,073,971 Loans in process $476,890 $1,486,368 Deferred net loan origination costs $1,112,983 $1,454,602 Loans held for sale $402,116 Other assets held for sale $321,509 $404,518 Allowance for loan losses ($5,568,482) ($8,115,005) Other real estate owned $211,750 Accounts receivable $7,834,425 $6,364,021 Cash $11,044,217 $10,123,789 Investments $408,078,338 $381,470,922 Accrued income $2,998,740 $3,476,660 Land, buildings, furnishings, etc. $10,426,655 $9,168,848 Prepaid assets $18,150,024 $17,624,386 Total Assets $988,349,976 $945,533,080 Liabilities Accounts payable $2,170,562 $1,610,385 Other liabilities $8,494,262 $7,107,605 Deposits Shares $192,016,539 $173,387,591 Certificates $209,842,729 $231,411,413 Holiday accounts $487,712 $446,492 Money Market accounts $241,098,251 $217,419,070 IRAs/HSAs $64,216,255 $64,848,750 Share draft/checking $149,833,301 $136,318,090 Total Liabilities $868,159,611 $832,549,396 Equity Regular reserves $15,465,739 $15,465,739 Undivided earnings $100,449,206 $92,301,859 Unrealized gains on investments $4,275,420 $5,216,086 Total Equity $120,190,365 $112,983,684 Total Liabilities and Equity $988,349,976 $945,533,080 Statement of Income and Expenses Operating Income Loan interest $27,670,478 $30,918,446 Credit Card interest $3,316,137 $2,960,407 Amortized net loan origination costs ($1,490,787) ($1,619,943) Investment income $4,935,305 $5,930,771 Other income $14,033,719 $13,108,108 Total Operating Income $48,464,852 $51,297,789 Operating Expenses Salaries and benefits $17,317,523 $15,682,222 Travel and conference $430,929 $486,729 Data processing $1,208,878 $1,022,246 Office occupancy $2,899,392 $2,980,889 Office operations $2,999,385 $3,370,910 Marketing $1,230,997 $1,019,255 Loan servicing $860,324 $785,238 Professional/outside services $1,029,961 $1,105,950 Insurance $2,381,980 $2,464,245 Plastic card and share draft $3,658,012 $3,294,333 Loan origination costs ($940,854) ($926,567) Misc. operating expenses $327,968 $310,514 Total Operating Expenses $33,404,495 $31,595,964 Provision for Loan Loss $1,546,073 $9,271,477 Gain on Disposition of Assets $280,224 $422,891 Cost of Funds Dividends Shares $182,587 $331,930 Deposit interest $5,546,663 $9,064,417 Total Cost of Funds $5,729,250 $9,396,347 Provision for Income Taxes ($82,089) $94,919 Net Gain from Operations $8,147,347 $1,361,973

8 2011 Credit Union of Colorado Officials Board of Directors: Dr. Will Fleckenstein, P.E., Chairperson Russ VanNostrand, Vice Chairperson JoAnn Vondracek, Secretary/Treasurer Mary Ann Adams, Director Jan Cotter, Director Jim Dixon, Ph.D., Director Dann Milne, Ph.D., Director Joe Montoya, Director Wendell Pryor, Director John Van Sciver, Director Lloyd Wicke, Director Supervisory Committee: Ron Hinton, Chairperson Marilyn North, Secretary Jim Raughton, Member Jeff Romeo, Member Jing Ye, Member Special Thank You We would like to thank all of our valued employees who helped Credit Union of Colorado grow throughout 2011 and who provided excellent member service. Arvada: 8770 Wadsworth Blvd., Unit R, Arvada, CO Aurora: E. Quincy Ave., Aurora, CO Bear Valley: 3100 S. Sheridan, Unit 1-F, Denver, CO Cañon City: 2149 Fremont Dr. Cañon City, CO Central Denver: 1390 Logan St., Denver, CO Colorado Springs: 3606 Austin Bluffs Pkwy. Colorado Springs, CO Fort Collins: 2510 E. Harmony Rd. Fort Collins, CO Golden: 1800 Jackson St., Golden, CO Grand Junction: 202 Main St., Grand Junction, CO Greeley: th Ave., Greeley, CO Lakewood: 9140 W. 6th Ave., Lakewood, CO Parker: E. Plaza Dr., Parker, CO Convenient Locations in Colorado Pueblo: 1721 Hwy. 50 West, Pueblo, CO Southeast Denver: 7541 E. Iliff Ave., Denver, CO Thornton: 3907 East 120th Ave., Thornton, CO Phone Numbers: Denver Metro Northern Colorado Southern Colorado Western Slope Toll Free ATTIE, The All-Time Teller: or TDD: Mobile Banking Website: This credit union is federally insured by the National Credit Union Administration Printed on Recycled Paper