2014 Annual Report SPERRY ASSOCIATES. Federal Credit Union

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1 2014 Annual Report RELATIONSHIPS SPERRY ASSOCIATES Federal Credit Union VALUE

2 Sperry Associates Federal Credit Union produced another sound year in 2014, achieving favorable financial results and demonstrating that our strategy to reinvigorate Sperry is effectively in place and on pace. The Board of Directors is confident that Sperry is positioned for sustainable financial stability and intelligent growth. CHAIRMAN S MESSAGE I am particularly pleased to report that with the continued support of the Membership, the Board of Directors, the Supervisory Committee along with the focus and drive of Credit Union Leadership, Management and Staff, Sperry s Vision to be our Members Best Choice for Financial Services is moving forward. By offering meaningful financial products and services at competitive rates, Sperry achieved over 30% growth in our capital ratio and added nearly 12% in New Memberships in These results are due in great part to our Membership s response to the efforts brought forth by Sperry s Staff and Management Team. I commend Kevin J. Healy, our CEO & Vice Chairman, for his determined leadership and for implementing our strategic plan. The building blocks are in place to strengthen our relationship with the current Membership and welcome more to the fold as Sperry continues to grow. As we know, excellent Member Service is the foundation of the Credit Union philosophy of People Helping People. I have personally observed Sperry employes as they provide support to our Members for their financial needs, and I acknowledge their efforts. Whether discussing loan options in the branch or at events, opening savings accounts, making deposits, or teaching our Members how to use Online Banking or Mobile Banking, our staff treats every Member with high regard, as a Member not a customer. Sperry Staff strives to take a second look and ask for more details, because building relationships is the Credit Union Difference! I am certain that Sperry will continue to provide its Membership with meaningful financial products and services to meet the needs of our Members and their families. My sincere wish is that our faithful Members will continue to spread the word about one of Nassau County s best kept secrets: Sperry Associates Federal Credit Union, thus ensuring that we continue to add Value to every one of our Members, those we know today and those we hope to meet and make a part of Sperry in the future. Gary Barello Chairman, Board of Directors Sperry in the Community: 2014 Colette Coyne Melanoma Awareness Campaign CCMAC Walk East Meadow Cheerleaders Garden City Park Fire Department Gladiator Fund Breakfast John Theissen Children s Foundation Casino Night, Back to School Program, and Toy Drive Mineola High School Career Day Nassau County American Legion New Hyde Park-Floral Park Kiwanis Club Night at the Races Salvation Army Six Nassau County Street Fairs The Maurer Foundation United Way, Operation LIVE United Young Israel of Plainview College Scholarships through New York Credit Union Association and Sperry Chamber of Commerce Membership in: New Hyde Park, Mineola, Williston Park, Franklin Square & Wantagh Franklin Square Business and Food Expo Gold Coast Multi Chamber Networking Event Trade Nassau

3 Statements of Financial Condition 12/31/14 12/31/13 12/31/12 ASSETS Cash & Cash Equivalents $24,701,848 $14,161,130 $ 27,772,063 Investments 79,161,370 97,387,485 92,912,323 Loans Receivable, net 141,594, ,128, ,659,303 Property & Equipment 3,970,412 4,065,285 4,217,843 Other Assets 4,238,609 9,538,087 10,455,467 Total Assets 253,667, ,280,762 $284,016,999 LIABILITIES & MEMBERS EQUITY LIABILITIES Members Shares 234,781,334 $250,126,314 $268,365,078 Accrued Expenses & Other Liabilities 1,175,298 1,119, ,351 Total Liabilities 235,956, ,245, ,169,429 MEMBERS EQUITY Regular Reserves 15,849,981 13,870,419 12,784,497 Undivided Earnings 2,300, ,054 0 Appropriated Undivided Earnings (440,198) (1,357,055) 2,063,077 Total Members Equity 17,710,460 13,035,418 14,847,574 Total Liabilities & Members Equity $253,667,092 $264,280,762 $284,016,999 Statements of Income 12/31/14 12/31/13 12/31/12 INTEREST INCOME Interest on Loans Receivable $6,332,016 $7,395,688 $8,738,154 Interest on Investments 1,844,345 1,981,789 2,458,606 Total Interest Income 8,176,361 9,377,477 11,196,760 INTEREST EXPENSE Dividends on Members Shares 1,555,387 1,912,116 2,568,658 Interest on Borrowed Funds Total Interest Expense 1,555,443 1,912,211 2,569,339 Net Interest Income 6,620,918 7,465,266 8,627,421 Provision for Loan Losses (1,875,000) 619,051 2,345,208 Net Interest Income after Provision for 8,495,918 6,846,215 6,282,213 Loan Losses NON-INTEREST INCOME Fee Income 633, , ,782 Other Operating Income 850, , ,166 Other Non-Interest Gain (Loss) 335, ,389 (738,307) NCUSIF & Corporate Stabilization Loss 0 (194,643) (249,189) Total Non-Interest Income 1,820,788 1,254, ,452 Income Before Expenses 10,316,706 8,100,436 6,706,665 NON-INTEREST EXPENSE Salaries & Benefits 3,003,173 2,452,742 2,061,382 Occupancy 436, , ,919 Operations 3,119,272 3,647,041 4,165,388 Total Non-Interest Expenses 6,558,518 6,492,458 6,648,689 Net Income (Loss) $3,758,188 $1,607,978 $57,976

4 I am pleased to report that Sperry achieved another year of positive financial growth in The perseverance and diligence of Sperry s Management Team enabled us to greatly improve our standing with the National Credit Union Administration (NCUA), which is the governing board for Federal Credit Unions. Several years ago, Sperry was advised by the NCUA to give up and merge with another credit union because it was thought that Sperry could not recover from its financial challenges. Instead, our Board of Directors and I put a plan in place to remedy the situation and Sperry has emerged stronger than before. Thanks to our Sperry Management Team and Staff working together to implement new programs to move Sperry in the right direction, we achieved over 30% growth in our Capital Ratio in We are making strides to be on strong financial footing for many years to come. My Management Team evolved in 2014 and provided some thought-provoking ideas which resulted in new products that have helped our Membership base grow and increased Sperry s revenue. This included the High Five Checking Account, and the Credit Card Balance Transfer program. These successful offerings attracted many new first-time Members to Sperry. CEO MESSAGE Supporting the community and building relationships is at the core of keeping Sperry on strong footing, so in 2014 Sperry s Business Development and Marketing teams focused on reinforcing the Sperry brand, attracting new Members, and at the same time enriching the local community. We participated in many noteworthy causes throughout 2014, as listed within this report. Several of the Sperry Board Members had the opportunity to attend the Credit Union National Association ( CUNA ) Hike the Hill Government Affairs Conference ( GAC ) in Washington, D.C. in February, We attend this conference every year because it is important for the State Senators and their staff to keep credit unions top of mind to ensure that we maintain our tax free status and can continue to offer the best rates and services to our Members. There were over 4,000 credit union attendees and we were all networking and interacting with each other. I also attended the Albany State Government Affairs Conference in April, which is a similar venue but is focused solely on the needs and concerns of New York Credit Unions. Because Credit Unions are cooperative in nature, conferences like these provide the opportunity to build relationships and share important information that is relative to our industry and supportive of our Membership. It makes me proud to see the progress that has been made since I became CEO in 2012, and I am grateful for the hard work and dedication of my Team as well as the support and insight of our Board of Directors and Supervisory Committee Members. I am also grateful for the trust that our Membership has shown us throughout the years. As you know, credit unions are member-owned, so the value that we are building through our products and services is intended to directly benefit you, our Members. We will continue to implement our Vision to make Sperry our Members best choice for financial services. Thank you for choosing to be a Member of Sperry Associates Federal Credit Union! Kevin J. Healy CEO & Vice Chairman

5 SUPERVISORY COMMITTEE REPORT The Supervisory Committee is a volunteer group that is responsible for ensuring the soundness of the Credit Union s operations and the compliance of the Credit Union policies with state and federal regulations. Appointed by the Board of Directors, the Committee s main responsibilities are to the Members of Sperry Associates Federal Credit Union. They ensure that management is implementing sound internal controls and maintaining practices and procedures that adhere to generally accepted accounting principles. Albrecht, Viggiano, Zureck & Company, PC (AVZ) was retained to perform an annual financial audit and issue certified financial statements on the overall financial condition of Sperry Associates Federal Credit Union. AVZ audited the financial statements as of December 31, 2014 and issued an unqualified audit report finding true and accurate numbers. The Committee also has regular contact with Membership to ensure that Member issues are addressed properly and on a timely basis. Member inquiries may be sent to the Supervisory Committee at: Sperry Federal Credit Union, PO Box 7875, Garden City, NY We believe that the Committee s persistent attention to detail, our independent evaluation of the Members funds and interests, and our safeguarding of assets will continually help strengthen the position of Sperry in the marketplace. We appreciate the opportunity to volunteer in this capacity at Sperry Associates Federal Credit Union. Rosaria Sasso Chairperson, Supervisory Committee CFO MESSAGE In 2014 we grew our capital ratio by 31.4%. That dramatic increase has positioned Sperry s balance sheet to make a difference with your balance sheet. Our competitive loans and deposits along with our well trained people offer our Members a combination of products and services that better help them meet their financial challenges on a daily basis. Our goal is to be the solution to your financial questions and needs. People are taking notice. Over the course of 2014 new Sperry Memberships increased by 11.9% and once again we are positioning ourselves to more than double that percentage in The ability to positively influence our Members and our community has always been an integral part of the Sperry Credit Union philosophy. We are proud to be a part of that movement and proud that you have showed such faith in us. We are looking forward to the opportunity to build on that faith and position ourselves in the best way possible to serve you. People Helping People is one of our guiding principles and something we strive to accomplish every day. Doug Brinkman Chief Financial Officer

6 400,000,000 Total Loans, Shares & Assets as of December 31st 350,000, ,000, ,000, ,000,000 Assets Shares Net Loans 150,000, ANNUAL REPORT 100,000,000 50,000, ,000 20,000 15,000 10,000 5, Members as of December 31st Jericho Turnpike, Garden City Park, New York, Phone: Fax: