About Truliant. investments, financial planning and counseling, free checking options, online services and 24hr ATMs.

Transcription

1 2008 Annual Report

2 About Truliant As a credit union, Truliant is a not-for-profit cooperative that provides affordable financial services to over 180,000 member-owners and more than 850 employers and their employees. The mission of Truliant Federal Credit Union 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. Member-owners are at the forefront of all decisions made. As a result, Truliant offers a full array of financial services, including lowrate consumer loans, high-yield savings programs, systematic savings and investments, financial planning and counseling, free checking options, online services and 24hr ATMs. For the past 57 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.

3 A Message From The President The intrinsic value of something is said to be the value that that thing has in itself, or for its own sake, or as such, or in its own right. Stanford Encyclopedia of Philosophy As we look back at the financial meltdown of the past year and a half, one theme that seems constant is that where investors believed there was value, it often turned out there was none. Mortgage loans made to consumers who could not repay them were a disservice to them, the institutions that made them and the investors that bought them. The packaging, sale and resale of those instruments coupled with complex structures of repayment and accompanying insurance products drove a frenzy of buying and selling along with an irrational hike in home prices in many markets. In the end, there was little intrinsic value in the transactions; there was a serious flaw at the level of someone actually owning and using a home to improve the quality of their life. Truliant has protected the intrinsic value of our assets by living up to our responsibility to understand and meet our members genuine needs. By accepting deposits from members in our markets and lending to members with sound credit and repayment ability for cars and homes and small businesses also in our markets, our model is simple yet effective in managing risk while delivering on our mission. Our growth, approaching ten percent for the year, is reflective of the confidence our members have in our community-based model. Our strong financial position in the face of the decline of household names like Wachovia earns Truliant the right to continue to employ our strategy to help our members through these tough economic times and beyond. To that end, we opened a new member financial center in southeast Greensboro in late fourth quarter. We continued to uncover and meet our members needs using our TruFinancial Checkup in all of our locations, including our Member Contact Center, recording an average of over 6,000 Check-ups per month. From a member perspective, this translates into meeting over 43,700 member-owner needs; helping over 13,200 members purchase vehicles; assisting over 650 members purchase or refinance their homes; encouraging over 17,600 members to open or add savings accounts with 50,200 investment products to meet their needs. On the service side, our Member Contact Center hit all service level goals for 2008 (answer 60% or greater of member service calls within 20 seconds and answer 70% or greater of loan calls within 20 seconds). Recognizing the financial stress on many of our members in a challenging economy, we extended our efforts to provide financial literacy and financial counseling to a broader audience. We offered seminars on such topics as managing your household budget, building/improving credit, finding an affordable mortgage and buying a car. We conducted over 80 financial education classes and provided more than 1,400 counseling sessions through our Balance program. While we also added over fifty new Business Partners representing over 3,880 potential new members, perhaps just as importantly, we worked with existing Business Partners to improve services to their employees. We also provided advice and counsel for employees of Business Partners that were experiencing layoffs or downsizing to assist them in managing through the transition. Our online banking service continued to provide our members convenient access and member usage of this channel increased 10% over prior year. In fact, more than 30% of our membership now relies on Home Banking. We also recorded a 34% increase in adoption of our Easy Pay electronic bill payment service. We re looking forward to further enhancing service to members who do not live or work near one of our twenty-five Member Financial Centers through our new Easy Deposit remote check program where qualified members can conveniently make deposits to Truliant from their home or office using a scanner. Beyond the services we provide and the caring manner we employ to improve members financial lives by meeting genuine needs, Truliant, as your member-owned cooperative, represents an avenue for self-help and hope at a time when those are in short supply. It is hope borne not of irrational optimism but of a confidence in our tried and true strategy of 57 years and what we can accomplish as a member-owned financial cooperative. Hope is meaningful when it derives from knowing that our mission of improving our members lives is even more important in times of financial stress and that we have the programs and people to provide real value. Our volunteer board of directors commitment to the core principles that have propelled our success has helped Truliant retain our strength and ability to be here to support our members financial needs today. While the economic turbulence may continue for some time, with the continuing support of member-owners, our Business Partners, and our volunteers, Truliant will remain a beacon of hope amidst the economic storm. Marcus Schaefer President and CEO

4 A Message From The Chairman Like most of you, I thought 2007 was a difficult year for many people; however looking back, 2007 seemed uneventful compared to what occurred in While we learned of the problems in the subprime lending markets in 2007, no one realized the huge impact that would be felt in financial markets and economies worldwide during the past year. It would appear that the damage that has been done will take years to correct and it will no doubt change the financial marketplace forever will continue to create many challenges for the entire economy in general, but it will also represent opportunities for some businesses. For example, credit unions in general have maintained stability in the face of the mortgage crisis, and have kept true to the philosophy of doing what s in the best interest of their members. Truliant, in particular, represents a different and positive financial choice for members and potential members in our communities. As consumers evaluate the problems and the events that led up to this financial crisis and look for solutions that add value to their lives, they will see that Truliant s 57-year mission of improving the financial lives of our members and keeping them at the forefront of every decision has enabled our Credit Union to remain stable, strong, and viable, despite the volatile times. We have not and will not make home loans that members cannot afford to pay. We are committed to helping members pay off their homes by retirement. We made the decision to not sell our credit card portfolio because it could negatively impact our member-owners. We invest heavily in member financial literacy; we believe in educating our members so they will make the best and most informed decisions regarding finances. You re a member-owner of a not-for-profit financial cooperative. This is a very different model from the typical for-profit financial institution. Truliant does not have stockholders to answer to or large profits to generate on behalf of those stockholders; we return our earnings to you, our member-owners, in the form of lower fees, lower interest rates on loans and higher rates on deposits. Your board of directors are all unpaid volunteers elected by you, our member-owners. We exist to provide financial solutions for you and our short and long term goals are the same - to help all of our member-owners with their financial well being. As 2009 continues to yield news about the economy, and the financial services industry in particular, consumers can expect to see tightening credit, more bank mergers, and increasing reports of instability in financial institutions. However, at Truliant, you can expect to see home loans being made, vehicles being financed, accounts being opened and our highly trained staff uncovering and meeting your needs. The same philosophy that has kept our Credit Union strong will continue to enable us to meet all of your current and future financial needs. On behalf of the board of directors of Truliant Federal Credit Union, I would like to thank our staff for all they do to continue to serve the needs of our member-owners every day and I would also like to thank each of you for continuing to look to Truliant for financial solutions for your life goals. Respectfully submitted, Greg Thrush Chairman of the Board Community Service Truliant understands the importance of giving back through service and employing individuals from the communities where we serve. Last year, Truliant employees and Board of Directors volunteered more than 5,600 community service hours. Some of our efforts include: providing college scholarships, conducting over 17 financial literacy workshops, sponsoring annual food and blood drives, collecting and donating student school supplies to underserved areas, participating in fundraisers for nonprofit agencies and conducting grant workshops resulting in 32 agencies receiving funding. In addition to our volunteer efforts, we donated thousands of dollars to deserving organizations to enhance the communities where we operate through our Charitable Giving and Truliant Community Mini-Grant Programs. If you would like to see a list of our community involvement activities, please visit the Community Focus section of Truliant FCU.org. In addition to employees focusing on the community, Truliant is committed to hiring people in the local areas we serve. Truliant has close to 500 employees located throughout NC, SC, VA and OH. Our mission is to enhance your quality of life and become your preferred financial institution. Every decision we make is with your best interest at the forefront. By employing within your area, we understand your specific needs and are dedicated to providing the highest quality member service.

5 A 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 2008 annual audit. 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. Respectfully submitted, Thomas G. Harding Chairman, Supervisory Committee Points of Differentiation What makes Truliant different from other financial institutions? Our Points of Differentiation. We have not sold our credit card accounts We don t offer an opt-out courtesy pay program Most member-owners qualify for the advertised loan rates We serve our communities from our communities We commit to helping our member-owners become debt free on their primary residence by retirement. Our Financial Advisors are not paid commissioned-based incentives for recommending financial products & services. CUABS (Credit Union Auto Buying Service), is Truliant s unique auto buying program that offers advice and discounts for member-owners

6 Consolidated Statements of Financial Condition December 31, 2008 and 2007 ASSETS Cash and cash equivalents Investments Loans to members, net of allowance for loan losses Premises and equipment NCUSIF deposit Other assets TOTAL ASSETS 08 $ 46,893,600 57,320,100 1,022,065,100 45,921,800 9,557,800 21,635,700 $ 1,203,394, $ 83,186,800 19,458, ,991,100 46,223,500 8,788,900 19,121,800 $ 1,095,771,000 LIABILITIES AND MEMBERS EQUITY Members savings accounts Borrowed funds Other liabilities TOTAL LIABILITIES $ 1,041,246,200 29,222,200 23,380,100 $ 1,093,848,500 $ 954,707,100 12,000,000 18,222,700 $ 984,929,800 MEMBERS EQUITY, substantially restricted Accumulated other comprehensive income 113,319,400 (3,773,800) 112,625,800 (1,784,600) TOTAL LIABILITIES AND MEMBERS EQUITY $ 1,203,394,100 $ 1,095,771,000

7 Consolidated Statements of Income December 31, 2008 and 2007 INTEREST INCOME Interest on loans Interest on investments & cash equivalents 08 $ 60,449,200 3,920, $ 61,418,100 3,731,400 TOTAL INTEREST INCOME 64,369,500 65,149,500 INTEREST EXPENSE Interest on savings accounts Interest on borrowed funds 27,338,100 1,056,700 28,321,300 1,235,400 TOTAL INTEREST EXPENSE NET INTEREST INCOME 28,394,800 35,974,700 29,556,700 35,592,800 PROVISION FOR LOAN LOSSES Net interest income after provision for loan losses 7,921,800 28,052,900 4,387,300 31,205,500 NON-INTEREST INCOME NON-INTEREST EXPENSE 19,306,600 46,665,900 18,204,100 45,517,300 NET INCOME $ 693,600 $ 3,892,300

8 Serving 180,000 member-owners and more than 850 business partners. The key to Truliant s success is living our mission to improve the quality of our members financial lives and have them view the Credit Union as their primary financial institution.