Financial Peace of Mind

Transcription

1 Financial Peace of Mind Annual Report

2 We are proud to provide the services, safety and security that give our Members financial peace of mind. During the past year, we have faced many challenges brought about by strained financial markets and a struggling economic environment. As your financial partner, our resolve has become even stronger to serve with an unwavering commitment to help our members attain their financial goals. As an organization, we have not only persevered over the course of the year, we have realized continued growth. This is a result of our persistent focus in providing superior service and the tools our members need in order to help them successfully manage their finances. We have taken the opportunity to remind our members what it is that sets us apart from banks that we are member owned, not-for-profit, and our mission is simple to serve our members and provide them with peace of mind knowing that their funds are safe and secure. We are well positioned to meet the needs of our members, despite the challenges that the coming year may bring. We are confident, that by working together, we have a bright future ahead.

3 and President s Message was a year of unprecedented, troubling and costly events throughout most of the global financial market system. We are pleased to report that in the midst of these circumstances, our financial condition remains sound, our level of member service never better, and the safety and security of our member s deposits unthreatened. We find ourselves in this position as a result of sound lending practices and a conservative approach to our investments. While we have experienced an increase in loan losses and delinquencies that are inherent in such a severe recession, we have not suffered the impact of risky investments or loose credit standards which have plagued so many of our nation s banks and other financial institutions. The continuing decline in real estate values and the unusually high unemployment rate will have an ongoing impact on the economy and the financial market system in the months ahead. We will remain vigilant throughout this time, and we will continue to guide BCU on a course best suited to helping our members attain their financial goals. This effort will require an ongoing re-evaluation of our products and services, as well as an unwavering commitment from our staff to continue our unparalleled level of service that supports the financial well being of each person we serve. Now, more than ever, as an organization we have embraced change as an opportunity to seek out new ways to provide greater value for our members. We have embarked on an informational and educational campaign, beginning with the redesign and expansion of our web site and its contents. In addition to offering useful articles, financial calculators and online tools to help our members make more informed financial decisions, we plan to expand our outreach efforts to include financial, education-based seminars for our members at various locations throughout 29. Despite the challenging environment, we continued to experience growth in both loans and member shares during. Member shares grew $53 million, or 5%, while total loans increased $44 million, or 4%. We also remain committed to offering above average rates in a time of historically low, but volatile, market interest rates. During these extraordinary times, we are pleased to report that over $37 million in dividends were paid to members in, a small decline when compared to the total of $4 million paid in when overall interest rates were significantly higher. Total net membership increased by 7,815 when comparing year-end with. Contributing to this growth was both new Select Employer Group (SEG) relationships, and our continued success in growing already established relationships with our valued SEG partners. corporate credit union system, who, like the banks, have faced unprecedented strains on liquidity and capital due to current extraordinary market conditions. We hold capital and deposits with these wholesale institutions, or Corporates, and utilize them for a variety of services. The difference between this Program and the bank TARP program is that the estimated $5.9 billion of funding necessary to guarantee deposits and infuse capital into the Corporates is being absorbed by the 8, plus credit unions across the United States, and not U.S. taxpayers. Although it s a positive sign that credit unions are using their strong capital positions to help cure their own industry, it does come at a price. The effect of this Program was recorded in and had a dramatic impact on our operating results that included a $12.4 million charge. Without this charge, the credit union would have been profitable in. At the time of this writing, there is a bill before Congress, already approved by the U.S. Senate, that would allow the NCUA to create a temporary stabilization fund, increase their borrowing capacity with the U.S. Treasury and allow credit unions the ability to spread the cost of this program over several years, among other things. Although this new development is encouraging and could lessen the up-front losses incurred, it remains to be seen how it will impact our operating results going forward, if adopted. Despite the fact that this unusual event impacted our capital position, we continued to have almost $95 million in capital reserves at the end of and our regulatory capital ratio of 7.4% is considered well capitalized, the highest regulatory capital designation for safety and soundness. BCU is proud to support the communities we serve both as an organization and as individuals. BCU sponsored a food drive, American Cancer Society s Relay For Life, MMRF Race For Research, Youth and Family Counseling, Riverside Foundation, Project Angel Tree, and many other local charities. Individuals donated over 2, hours of their time to local schools, Baxter Regional Hospital, LifeSource, Riverside Foundation, Big Brothers & Sisters, American Legion and more. For the 4th year in a row, BCU was pleased to receive an Honor Roll designation from the Center for Companies That Care. This designation recognized our ongoing commitment to serving members and the communities in which we do business, and for placing significant emphasis on the value of our employees. We would like to thank our Board of Directors, sponsors, staff and our members who form the foundation of BCU s success. We are ready to face the challenges that 29 may bring, and we will maintain the focus of providing our members with the financial guidance and tools that they need, both now and in the years to come. In the first quarter of 29, the NCUA, our insurer and primary regulator, announced a new Corporate Stabilization Program that s primary purpose is to add stability to the wholesale Michael G. Valentine President & CEO We would like to recognize the corporate sponsor groups who have played such a critical role in our success over the last 25 years. Credit Union Services Provided by BCU

4 Statements of Financial Condition As of December 31, and Statements of Income For the years ended December 31, and $1,5 1, Asset Growth (in millions) 26 Member Growth (in thousands) (in thousands) Assets Cash and cash equivalents $ 32,49 $ 52,686 Investments Trading, at fair value 21,7 Available-for-sale, at fair value 47,144 37,568 Other 45,22 35,565 Mortgage loans held for sale 6,66 4,457 Loans to members, net 1,16,668 1,122,391 Accrued interest receivable 4,73 6,228 Property and equipment, net 22,87 23,451 NCUSIF deposit 3,58 9,771 Other assets 14,811 12,64 Total Assets $ 1,357,965 $ 1,34,756 Liabilities and Members Equity Liabilities Members shares $ 1,131,918 $ 1,79,163 Accrued expenses and other liabilities 2,368 2,247 Borrowed funds 11, 1, Total Liabilities 1,262,286 1,199,41 Members Equity Retained earnings, substantially restricted 94,948 15,634 Accumulated other comprehensive gain (loss) 731 (288) (in thousands) Interest Income Interest on loans to members $ 78,482 $ 76,895 Interest on investments and cash equivalents 5,138 5,916 Total interest income 83,62 82,811 Interest Expense Dividends on members shares 37,8 4,45 Interest on borrowed funds 3,596 3,55 Total interest expense 4,64 43,595 Net Interest Income 43,16 39,216 Provision for Loan Losses 18,8 11,525 Net Interest Income After Provision for Loan Losses 24,216 27,691 Non-Interest Income Service charges and other fees 13,95 12,284 Interchange income 9,674 9,66 Other mortgage income 2,628 1,643 Net gains on sales of loans 1,21 1,285 Other non-interest income 7,73 6,241 Gain on sale of investments available-for-sale 22 _ Gain on sale of VISA stock 1,99 _ Total non-interest income 36,61 31,6 $1,2 1, $1,2 1, Loan Growth (in millions) 26 Share Growth (in millions) 3 26 Total members equity 95,679 15,345 Total Liabilities and Members Equity $ 1,357,965 $ 1,34,756 Non-Interest Expenses Salaries and benefits 25,111 22,569 Loan costs 1,344 9,971 Equipment and data processing 6,483 5,844 Occupancy 3,748 4,197 Other operating 13,364 12,65 NCUSIF impairment and assessment 1,657 _ Corporate credit union capital impairment 1,722 _ 2 26 Total non-interest expense 71,429 55,23 Net Income (loss) $ (1,63) $ 3,521

5 Achievements in Looking forward in 29 In March of we welcomed our newest Select Employer Group Medline. Medline has over 4,6 employees nationwide, and we installed 2 new ATMs as part of our Rollout Celebrations. We look forward to continued membership growth with this new SEG in 29. In July of we introduced Mobile Banking, a technology enhancement. Mobile Banking is a wireless internet-based service that enables members to manage their accounts safely and conveniently anywhere without a computer 24 hours a day, seven days a week. With Mobile Banking, members can view account balances, look up transactions, transfer funds, and locate the nearest surcharge-free ATM, service center or shared branching location. We also enhanced our Online Banking capabilities with remote deposit. Members can now transfer funds to and from their Credit Union accounts and other institutions securely over the internet. This convenience increases the ways members can conduct their finances with us. To provide greater Credit Union access and convenience to employees at SEG locations, we installed a total of 6 new ATMs in. These ATMs were placed in BCU, Beckman Coulter, CDW, and Medline locations around the country. In addition to proving more conveniences for our members, we continued our focus on offering vital products that financially benefit our members. As a part of this effort, we introduced the new POWERCHECKING account in July. With this new account, members have enjoyed taking advantage of Online Banking convenience, complimentary identity theft recovery service and access to a broad network of surcharge-free ATM s while earning a high rate of return. Over five thousand members opened a POWERCHECKING account in, and total checking account balances grew by 16% over last year. We were excited to see that POWERCHECKING was well received and members are benefiting from all of the features this account has to offer. Looking ahead, BCU is committed more than ever to help meet the many financial needs of our members. They can continue relying on us for their loan needs during a time when many financial institutions are placing increased restrictions on lending due to their decreased capacity to lend. We already have a number of events and product enhancements planned for 29 that will provide even more conveniences and greater benefits for our membership. We were pleased to introduce our new Web site in January of 29 that features a brand new look, streamlined navigation, and more noticeable links to take members where they need to go more quickly. We are also enhancing the site with a new Financial Resource Center that will be updated monthly. Members will have access to a wealth of financial information and economic news that they can use to help them better manage and plan their finances. In addition to providing relevant financial information, we will also introduce new savings options for our members. We feel this is especially important for members who may be feeling financial pressures brought about by the strained economy. Our new Rainy Day Savings account offers a high rate of return as an incentive for members to systematically save and grow their emergency funds. Another savings option recently introduced is a new Preferred Interest Checking account. Members are able to take advantage of a competitive tiered rate checking account, without having to meet a host of requirements to earn dividends. Both accounts will help address our members future financial needs. To help increase Credit Union accessibility and member convenience, we will be opening a new service center within the Cardinal Health headquarters in Dublin, OH. The new location will be twice as large as the current service center, and will be able to serve members more efficiently. We work hard as an organization to not only be fiscally responsible, but environmentally responsible as well. With this in mind, we are pleased to announce that BCU s Vernon Hills headquarters became LEED certified in early 29. LEED stands for Leadership in Energy and Environmental Design. This is the nationally accepted benchmark for the design, construction, and operation of high performance green buildings.

6 Board of Directors, Committees & Officers Service Centers Board of Directors Thomas M. Abate Michael J. Baughman Robert A. Benziger Michael J. Curran David F. Drohan Thomas W. Hodson Ron K. Labrum James C. Luthin Douglas D. Shuma James H. Taylor, Jr. Charles W. Thurman Michael G. Valentine Executive Committee Thomas W. Hodson Ron K. Labrum James H. Taylor, Jr. Michael J. Curran Supervisory Committee Michael J. Baughman John M. Bird Sebastian J. Bufalino Scott A. Kilgren Wendy W. Hart Finance Committee Charles W. Thurman Todd A. Gustafson Thomas W. Hodson Michael H. Shapiro Officers Michael G. Valentine President/CEO Treasurer Douglas D. Shuma Vice Robert A. Benziger Secretary Todd A. Gustafson Senior Vice President/CFO/ Asst. Treasurer & Secretary Robert McKay Senior Vice President/COO John Bratsakis Senior Vice President/ Business Development Jeffrey M. Johnson Senior Vice President/ Information Systems Lisa A. Wilson Senior Vice President/ Human Resources Herbert O. Behrens Vice President/Mortgages James R. Block Vice President/Lending Patti Dixon Vice President/Service Centers C.J. Presto Vice President/Finance Carey A. Price Vice President/Sales & Service John S. Sahagian Vice President/Collections Charles E. Smith Vice President/Controller Douglas N. Wright Vice President/ Audit & Compliance Director Emeritus Samuel G. O Kelly Arkansas Mountain Home 19 North Highway 21 Mountain Home, AR California Brea Beckman Coulter 25 S. Kraemer Blvd Brea, CA Glendale 451 Colorado Boulevard Los Angeles, CA 939 Fremont 479 Bayside Parkway Fremont, CA Fullerton Beckman Coulter 43 N. Harbor Blvd Fullerton, CA Irvine * 1212 Alton Parkway Irvine, CA 9266 Westlake Village 1 Baxter Way Westlake Village, CA Florida Kendall Beckman Coulter 118 S.W. 147th Avenue Miami, FL * Public Access Miami 86 N. W. 41st Street Doral, FL Tampa/Largo th Avenue North Largo, FL Illinois Crystal Lake * 415 South Main Street Crystal Lake, IL 614 Deerfield 1 Baxter Parkway Deerfield, IL 615 Lake Forest Trustmark 4 North Field Drive Lake Forest, IL 645 McGaw Park 1485 Waukegan Road McGaw Park, IL 685 Round Lake Route 12 & Wilson Road Round Lake, IL 673 Vernon Hills * 34 N. Milwaukee Avenue Vernon Hills, IL 661 Indiana Bloomington 927 South Curry Pike Building B Bloomington, IN 4743 Massachusetts Natick Boston Scientific Corporation One Boston Scientific Place Natick, MA Marlborough Boston Scientific Corporation 1 Boston Scientific Way Marlborough, MA 1752 Minnesota Maple Grove Boston Scientific Corporation 2 Scimed Place Maple Grove, MN St. Paul 41 Hamline Avenue North St. Paul, MN Mississippi Cleveland 911 N. Davis Avenue Cleveland, MS New York Glens Falls 8 Glens Falls Tech Park Glens Falls, NY 1281 North Carolina North Cove 67 Pitts Station Road Marion, NC Ohio Dublin 7 Cardinal Place Dublin, OH 4317 Puerto Rico Aibonito Road 721 KM.3 Aibonito, PR 75 Añasco Road 42, North KM 1.4 Anasco, PR 61 Bianca * Salón de Actividades Bianca Carretera #2 KM 143. Anasco, PR 61 Carolina Road 19 KM.7 Carolina, PR 987 Coopervision/Ponce 5 Carr., 584 Lote 7 Amuelas Industrial Park Juana Diaz, PR 795 Jayuya Road 144 KM 2.6 Jayuya, PR 664 Maricao Road 357 KM.8 Mariacao, PR 66 San Germán Road 122 KM.5 San Germán, PR 683 Contact BCU Main Office P.O. Box North Milwaukee Avenue Vernon Hills, IL 661 Member Relations fax BART BCU s 24-Hour Telephone Teller Online Banking Address askbcu@bcu.org Servicios En Español preguntabcu@bcu.org To serve members who do not live near a BCU location, your credit union is affiliated with a shared branching network with over 3,58 locations in 5 states and 8 countries. Visit the Branch and ATM Locator at to search for the shared location nearest you.

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