Oak Ridge Groundbreaking Years of Tradition Annual Report

Transcription

1 Oak Ridge Groundbreaking Years of Tradition 2008 Annual Report

2 pg 1-3 pg 4-5 pg 6-7 pg 8-9 pg 10 pg 11 pg Annual Report Chairman s Report Treasurer s Report Nominating Committee Report, Annual Meeting Agenda, Supervisory Committee Report Minutes of the 60 th Annual Meeting of The Membership Officials Management Branch Locations

3 Chairman s Report 2008 On August 6, 2008, ORNL Federal Credit Union officially celebrated 60 years of member service. We ve grown from one small office in Oak Ridge to 31 branches located throughout our 16 county community. Despite the economic instability during 2008, ORNL Federal Credit Union continued steady growth and performance throughout the year. Member loyalty played a key role in membership growth during 2008, and we are committed to maintaining the level of trust you have in us. A 10.9% growth in membership ended the year with a total membership of 148,183. That s up by 14,619 members from last year. And we hope you will continue to spread the word to your friends and family about credit union membership. Growth in both deposits and loans finished well above our projections for the year. Our deposit growth increased substantially with many people leaving behind risky investments and moving to the safety of ORNL Federal Credit Union. Total deposits grew $143.9 million, or 16%, to a yearend total of $1.037 billion. Although a sluggish economy slowed loan growth throughout the year, loans outstanding increased $141.4 million, or 16.6%, to a year-end total of $995.9 million. Finally, our assets continue to grow and exceed the $1 billion mark. Total assets for the credit union grew $167.9 million, or 15.9%, to a year-end total of $1.222 billion. Our mission statement, Enabling members to achieve their financial goals by being there when, where, and how they need us demonstrates our commitment to convenience for our membership. Often times, members find it difficult at the end of their work day to make it to a branch before closing. Our in-store branches with extended hours have proven to satisfy the many members with varying work schedules. A total of eight new branches were opened in 2008 five were in-store branches. The year began with the opening of the in-store branches at both the Kroger on Northshore Drive and the Food City on Morrell Road in Knoxville on March 10th. Later that month we branched out into Campbell County as our stand-alone LaFollette office opened near Woodson s Mall on March 17th. And on May 12th, we opened a new stand-alone branch in the Bearden area that offers convenient entrances and exits on both Kingston Pike and Sutherland Avenue

4 Chairman s R As membership has simply outgrown our storefront branch in Madisonville, we relocated to a stand-alone office on July 28th providing drive-up services and safe deposit boxes to our members in that area. On August 27th, we opened a location in the new Maynardville Food City, and on October 6th, our 30th branch opened inside the new Kroger Marketplace in Farragut. Our 31st and final branch to open for the year is located within the new Food City store in Lenoir City and opened November 12th. Located near our other Lenoir City Branch, this new in-store branch, like the others, offers the convenience of extended hours. Although many members enjoy the convenience of our expansive branch network, the Internet has significantly changed the way members do business with the credit union. It provides a convenience that many members can no longer live without. To help protect members who do most of their business online, we partnered with CSIdentity early in the year to offer identity theft protection. For a nominal fee CSIdentity monitors your personal information on the Web and alerts you of anything suspicious. And later in the year we began offering electronic statements, or e-statements, to our membership. Now, with your home computer, you can view your monthly statement online and also download, store, and upload your statement to popular accounting software. This new service offers faster delivery of your information and even better, it cuts down on paper use! Our Credit Union Service Organization, CU Community, LLC, continues to help hundreds of members find a better rate on their auto, home, and business insurance through CU Community Insurance. And, our CU Community Title company and mortgage origination services grow stronger as they not only provide title and servicing support to ORNL FCU, but to other area credit unions needing title and insurance services. Your credit union continued its mission to serve as a good corporate citizen throughout We started the year with the Dogwood Arts Festival and its House and Garden Show. Money raised from the Dogwood Arts is used to assist with the arts in area schools. Something new for us in 2008 was our Document Shred Day we held in the spring and fall. The community was delighted at the convenience of ridding their homes of sensitive documents safely and securely. During the summer months several - 2 -

5 eport 2008 of our employees headed up the Camp Money Matters: Financial Literacy Program. Local teens were able to learn different aspects of finance in a week-long, fun classroom setting at our main office and at our West Knoxville office. At the end of the week, the teens participated in a graduation ceremony and were awarded a certificate. As always, we have a strong presence of community involvement with local schools. ORNL Federal Credit Union is committed to helping local schools by supporting their events and athletic programs, teaching Junior Achievement classes that help the students become better citizens, and providing scholarships to both the University of Tennessee and community colleges. Despite the fact that 2008 was indeed a year of turbulent economic change, ORNL Federal Credit Union felt it was a priority to maintain good corporate citizenship. From the West to the East coast, consumers began to feel the fallout from the subprime debacle and the following Wall Street meltdown. And with all the bank failures, buyouts, and bailouts, consumers were left confused on what to do with their personal finances even for loans, as the media continued to say financial institutions were tightening, and in some cases, ceasing lending. We knew both members and non-members alike were overextending their credit. We began to see delinquencies on the rise and credit quality on the decline. In the fall of 2008 we began our Borrow Smart. Save Smarter. TM campaign. We knew it was time to help our members and non-members get back to the basics of smart borrowing and saving to the basics of establishing both short and long term savings goals, consolidating debt, and borrowing within one s means. We quickly began to receive an overwhelming response from staff and the community. It is the goal of being a trusted financial resource that will drive us into We will continue to expand this program to reach out to our communities. And we look forward to continuing to serve you, our member-owners, your friends and family, and the many who will turn to your credit union for help during On behalf of ORNL Federal Credit Union s Board of Directors and staff, thank you for your loyalty and for making us your first choice as a financial partner and service provider

6 Treasurer s R Statement of Financial Condition Assets Cash and cash equivalents $ 50,964,239 $ 57,002,594 Investments $ 120,574,244 $ 90,899,718 Loans to members, net of the $ 977,910,206 $833,249,164 allowance for loan losses Loans held for sale $ 13,281,758 $ 18,308,297 Accrued interest receivable $ 4,159,874 $ 3,853,976 Property and equipment $ 38,246,193 $ 31,875,768 National Credit Union Share $ 8,679,594 $ 7,691,495 Insurance Fund deposit Other assets $ 8,097,700 $ 11,066,957 TOTAL ASSETS $ 1,221,913,808 $1,053,947,969 Income Interest Income Interest on loans to members $ 57,665,373 $ 50,395,805 Interest on investments $ 6,341,813 $ 6,480,098 and cash equivalents Total Interest Income $ 64,007,186 $ 56,875,903 Interest Expense Dividends on members shares $ 25,616,289 $ 25,145,772 Interest paid on borrowed funds $ 2,011,653 $ 1,460,561 Total Interest Expense $ 27,627,942 $ 26,606,333 Net Interest Income $ 36,379,244 $ 30,269,570 Liabilities & Members Equity Liabilities Members shares $1,037,330,255 $893,447,898 Accrued expenses and $ 17,745,875 $ 16,989,321 other liabilities Federal Home Loan Bank $ 57,266,139 $ 38,198,433 advances Total Liabilities $ 1,112,342,269 $948,635,652 Members Equity Retained Earnings $109,571,539 $105,312,317 TOTAL LIABILITIES & EQUITY $ 1,221,913,808 $1,053,947,969 Statement of Income and Expense Provision for Loan Losses $ 5,604,778 $ 2,042,668 Net Interest Income After Provision for Loan Losses $ 30,774,466 $ 28,226,902 Non-Interest Income $ 21,196,511 $ 17,798,969 Income Before General and Administrative Expenses $ 51,970,977 $ 46,025,871 General & Administrative Expenses Salaries and benefits $ 26,343,323 $ 21,443,949 Operations $ 14,439,313 $ 12,102,756 Occupancy $ 3,894,609 $ 2,959,663 Other $ 2,649,094 $ 2,350,640 TOTAL EXPENSES $ 47,326,339 $ 38,857,008 NET INCOME $ 4,644,638 $ 7,168,863 NOTES TO FINANCIAL STATEMENTS 1. Cash and Cash Equivalents - Cash and cash equivalents consist of cash on hand, demand deposits, money market funds and non-term share deposits in Volunteer Corporate Credit Union. 2. Investments - Investments consist primarily of government agency securities, mortgage backed securities and term deposits at other insured financial institutions. 3. Loans to Members 12/31/08 12/31/07 First Mortgage Real Estate $331,766,413 $275,441,167 Other Real Estate $161,775,303 $149,294,098 Member Business $110,343,970 $ 79,250,128 Automobile $330,401,477 $295,722,626 Unsecured $ 21,429,950 $ 20,411,824 Other Loans $ 40,180,010 $ 34,348,895 $995,897,123 $854,468,738 Allowance for Loan Losses $ (4,705,159) $ (2,911,277) $991,191,964 $851,557, Loan Servicing - Mortgage loans sold to FNMA are not included in the accompanying statements of financial condition. The unpaid principal balances as of December 31, 2008 and 2007, were $256,203,873 and $193,941,119, respectively. 5. National Credit Union Share Insurance Fund (NCUSIF) Deposit - The deposit in the NCUSIF is in accordance with the National Credit Union Administration regulations, which requires a deposit by each federally insured credit union in an amount equal to 1% of its insured members shares. 6. Federal Home Loan Bank Advances - FHLB advances are payable in monthly installments of principal and interest. The average cost in 2008 was 3.82%. Interest paid is included in interest expense on the Statement of Income. Advances are used primarily to fund members fixed rate first mortgage loans. 7. Consolidated Statements - The credit union wholly owns CU Community, LLC, a credit union service organization. The credit union s financial statements are consolidated as required by Generally Accepted Accounting Principals (GAAP). 8. Members Shares 12/31/08 12/31/07 Regular Share Accounts $170,885,723 $152,529,487 Share Draft Accounts $130,612,096 $119,854,442 Money Market Accounts $137,387,669 $112,602,607 IRAs $104,678,315 $ 83,720,571 Certificates $493,766,452 $424,740,791 $1,037,330,255 $893,447,898 YEAR ENDING DECEMBER 31,

7 eport 2008 (in millions) $1,000 $900 $800 $700 $600 $500 $400 $300 $200 ASSETS 1.22 billion (in millions) $1,000 $900 SHARES 1,037.3 (in thousands) MEMBERS 148,183 $ $700 $ $500 $ $ $ (in millions) $1,000 $900 $800 $700 $600 $500 $400 $300 $200 LOANS

8 Supervisory Com Nominating Committee Report Q ualifying members who submitted their application for consideration as Board candidates were thoroughly reviewed and the selection has been completed. The three available positions on the Board of Directors will be filled by the online election held February 24th through March 5th prior to the 61st Annual Meeting. The winners will be announced at the meeting and on our Web site at The Nominating Committee hereby nominates the following five individuals we believe will serve the credit union in the best interests of the members. The order in which their names appear was determined by a random drawing: Jama Hill Thomas Berg Randy Gorman James Conway Leigha Edwards Respectfully Submitted, ORNL FCU Nominating Committee Mason Oakes, Chair, Joe Setaro and Dub Shults The Supervisory Committee, which is appointed by the ORNL FCU Board of Directors, is responsible for ensuring that the credit union s financial records are in order and that internal controls are in place to protect the assets of the credit union for its members. The committee does this by conducting financial audits and by regular testing of internal controls. To assist us in carrying out these responsibilities this past year, the committee engaged the firm of McGladrey and Pullen, CPAs, to perform an independent audit and provide an opinion on the financial condition of your credit union for the period ending 12/31/2008. The goals of this audit are to determine the reliability and integrity of the financial and operating information and to determine compliance with Generally Accepted Accounting Principles (GAAP). Independent audit findings are helpful in our oversight of credit union activities. The committee also engaged CastleGarde to perform an internal vulnerability assessment. CastleGarde was responsible for performing quarterly intrusion testing. An Internal Audit Program, under the direction of the Supervisory Committee, provides an ongoing review of compliance with policies and procedures. This program includes an annual - 6 -

9 Agenda 61st Annual Meeting 1 / CALL TO ORDER a. Welcome b. Quorum determination 2 / MINUTES OF 60TH ANNUAL MEETING 3 / REPORTS a. Chairman b. Treasurer c. Supervisory Committee 4 / ANNOUNCEMENT OF ELECTION RESULTS Introduction of newly elected Board Members 5 / OLD BUSINESS 6 / NEW BUSINESS 7 / ADJOURNMENT mittee Report inspection of internal controls, cash, member loans, and other assets of your credit union. The audit program for the year 2008 was completed as planned with no unresolved issues. The Credit Union s Board of Directors and management are fully committed to comply with all applicable rules and regulations. As part of this ongoing commitment, the responsibility for the credit union s compliance is included in the Supervisory Committee s scope of authority. The Compliance Program for the year 2008 was completed as approved with no outstanding items. The committee followed and offered guidance to our internal auditing function during the year. It approved the annual internal audit plan, participated in training programs, and met with credit union officers to discuss detailed operational information. The committee s activities during the year included: approval of new policies, approval of annual of internal audit and compliance programs, performance review of these programs, reporting to the Board of Directors at their monthly meetings, participating in training programs, and meeting with members of the management team. The committee is pleased to report your credit union continues a tradition of excellent financial management and compliance

10 Minutes Of The 60 1 Call to Order a. WELCOME. The 60th Annual Meeting of the ORNL Federal Credit Union (operating under NCUA Charter No. 5797, issued August 6, 1948) was called to order at 7:00 p.m. by Herb Debban, Chair of the Board of Directors. b. QUORUM DETERMINATION. There were more than enough members present to constitute a quorum Minutes of the 59th Annual Meeting A motion was made, seconded, and passed to approve the minutes as written. Election a. REPORT OF THE NOMINATING COMMITTEE. Members of the committee were Joe Setaro, Chair; Mary Beth Blair; and Dub Shults. Debban called on James McKinley, Member of the Supervisory Committee, who referred to the Nominating Committee s report as published in the 2008 Annual Report. Nominees were Evelyn Blau, Herb Debban, Wanda McCrosky, and Mason Oakes. b. ANNOUNCEMENT OF ELECTION RESULTS. James McKinley announced the following results of electronic/paper voting prior to the meeting: Wanda McCrosky 691 Mason Oakes 604 Herb Debban 594 Evelyn Blau 291 McKinley congratulated McCrosky, Oakes, and Debban on their election to the Board. Reports Debban introduced President and Chief Executive Officer John D. McKittrick, current Board Members, and members of the Supervisory Committee. He thanked members of other committees and volunteers as listed in the printed report. He stated that the purposes of the meeting were to report to the membership, receive the report of the Nominating Committee, announce results of the election, and announce winners of the prizes. A 6-minute audiovisual presentation on the Credit Union s activities during 2007 was shown. Debban thanked members of the Marketing Department for producing the audiovisual report. He referred to reports of Chairman, Treasurer, and Supervisory Committee as shown in the Annual Report. He called for questions on any of the reports, but there were none. Debban again thanked - 8 -

11 th Annual Meeting all volunteers, and especially thanked members of the staff. He said we really have an outstanding staff. Old Business None. New Business a. RECOGNITION. Chair Herb Debban expressed appreciation to Jeff Ault, who has completed his service on the Supervisory Committee Annual Meeting Prize Winners 8 Adjournment The meeting adjourned at 7:15 p.m., followed by a reception catered by the Double Tree Hotel where the meeting was held. Winners of $100 prizes from a drawing of all members who voted were: 1. Christopher Alexius 2. Kathy Banks 3. Carolyn Boggess 4. Dennis Bowker 5. James Brock 6. William Cotter 7. Linda Ducamp 8. Douglas Fraker 9. Jama Hill 10. Hank Jenkins 11. Timothy McMurray 12. Virginia Miller 13. Robert Upchurch 14. Julie Wallin 15. Arnold Watson - 9 -

12 Officials Board of Directors Policy & Governance Committee Herb Debban, Chair Mason Oakes, Vice Chair Wanda McCrosky, Secretary Marcella Catron, Treasurer Leigha Edwards Randy Gorman Jama Hill Samuel P. McKenzie James E. Payne Mary Helen Rose, Recording Secretary Supervisory Committee David Watkins, Chair Vickie Caughron Harvey Gray James McKinley Joel E. Pearman Nominating & Election Committee Mason Oakes, Chair Joe Setaro Dub Shults Wanda McCrosky, Chair Leigha Edwards Randy Gorman Jama Hill Samuel P. McKenzie James E. Payne Retirement Plans and Investment Committee Herb Debban, Chair Jama Hill Sally Jaunsen Freels Mason Oakes Mary L. Yoder Legislative and Governmental Affairs Committee Leigha Edwards, Chair Randy Gorman Samuel P. McKenzie James E. Payne

13 Management John D. McKittrick, President / CEO Dennis Bowker, Senior Vice President, Finance Chris Johnson, Senior Vice President, President, CU Community Larry A. Jones, Senior Vice President R. Taylor Scott, Senior Vice President Maxine W. Allen, Vice President, Risk Management Mortgage Dawn Brummett, Vice President, Member Services Janita Clausell, Vice President, Business Development & Training-Mortgage David Farmer, Vice President, New Branch Development Andrea Griffitts, Vice President, Audit and Compliance Clay Kearley, Vice President, Consumer Lending Dan Lovell, Vice President, Member Business Services Michael McKnight, Vice President, Chief Technology Officer Brenda Owensby, Vice President, Human Resources Lisa Taylor, Vice President, Controller & Funding Officer Tom Wright, Vice President, Marketing and Community Relations Vicki Cox, Assistant Vice President, Consumer Loan Quality Control Linda Evans, Assistant Vice President, Member Services Stacey Foster, Assistant Vice President, Fraud & Forgery, Security Chris Fox, Assistant Vice President, Information Technology Emily Gibson, Assistant Vice President, Indirect Lending Lori Ihle, Assistant Vice President, Member Services Vickie Kitts, Assistant Vice President, Loan Servicing, Collections Melissa McMahan, Assistant Vice President, Remote Service Delivery Rochelle Pettus, Assistant Vice President, Operations, Deposit Servicing Cissi Reagan, Assistant Vice President, Member Services Tim Sirman, Assistant Vice President, Facilities Harriet Walker, Assistant Vice President, Member Services Joy Wilson, Assistant Vice President, Technical Training Nancy Ballard, Public Relations Director Jean Eiler, Security Director Christian Hammond, Creative Director Jessica Wade, Marketing Director Don Bias, Manager, Facilities Sharon Burris, Manager, eservices Becky Curry, Manager, Accounting Tod Elam, Manager, Collections Karen Lawrence, Manager, Sales Janet Martin, Manager, Contact Center Brian Mullins, Manager, MEMBERS Financial Services Carolyn Murray, Manager, Internal Service Center Renee Pemberton, Manager, Automated Dispenser Services Trish Seiber, Manager, Mortgage Servicing Amy Vichich, Manager, Benefits Melanie Walsh, Manager, Staffing Greg Wilson, Manager, Operations, Deposit Servicing Donna Beeco, Branch Manager, Middlebrook Food City Ryan Bennett, Branch Manager, Oak Ridge National Lab Stanley Bollinger, Branch Manager, Powell Kroger Lori Branam, Branch Manager, Sevierville Brandi Breeden, Branch Manager, Maryville Wal-Mart Debra Brown, Branch Manager, Farragut Kroger Amy Chesney, Branch Manager, Fountain City Missy Crisp, Branch Manager, West Knoxville Angela Dilbeck, Branch Manager, Oak Ridge Wal-Mart Tommy G Fellers, Branch Manager, Karns Brenda Hall, Branch Manager, Lenoir City Food City Debra Hankins, Branch Manager, Kingston Mike Harrison, Branch Manager, Halls John Hassell, Branch Manager, Madisonville Terresa Hill, Branch Manager, Maryville Vickie Hill, Branch Manager, Millertown Pike Myra Kennedy, Branch Manager, Loudon* Jacquoleen Knight, Branch Manager, Northshore Kroger Susie Jones, Branch Manager, Floater Michelle Leach, Branch Manager, North Knoxville Amanda Mahan, Branch Manager, Bearden Dawn Millican, Branch Manager, Alcoa Gale Pace, Branch Manager, Farragut Cynthia Russell, Branch Manager, LaFollette Megan Sandiford, Branch Manager, Morrell Food City Angel Scott, Branch Manager, Oak Ridge Kay Smith, Branch Manager, Clinton LaTanya Terrell, Branch Manager, East Knoxville Don Thaler, Branch Manager, Lenoir City Teresa Trent, Branch Manager, Morristown Jerry Ward, Branch Manager, South Knoxville Angie White, Branch Manager, Maynardville Food City Misty Wright, Branch Manager, Rockwood Wal-Mart *Opening 2009

14 Branch L Knox County Bearden Branch 5505 Kingston Pike East Knoxville Branch 3634 East Magnolia Avenue Farragut Branch Municipal Center Drive Farragut Kroger Marketplace Branch 189 Brooklawn Street Fountain City Branch 5208 North Broadway Halls Branch 4510 East Emory Road Karns Branch 7228 Oak Ridge Highway Middlebrook Food City Branch 9565 Middlebrook Pike Millertown Pike Branch 5409 Millertown Pike Morrell Food City Branch 284 Morrell Road North Knoxville Branch 808 Victor Drive Northshore Kroger Branch 9501 South Northshore Drive Powell Kroger Branch 6702 Clinton Highway South Knoxville Branch 7325 Chapman Highway West Knoxville Branch 8721 Kingston Pike Anderson County Oak Ridge Branch 221 South Rutgers Avenue Oak Ridge Wal-Mart Branch 373 South Illinois Avenue Clinton Branch 1117 North Charles Seivers Boulevard Blount County Alcoa Branch 103 Hamilton Crossing Drive Maryville Branch 1743 West Broadway Maryville Wal-Mart Branch 2410 US Highway 411 South Campbell County LaFollette Branch 2229 Jacksboro Pike

15 ocations Hamblen County Morristown Branch 1730 West Andrew Johnson Highway Loudon County Lenoir City Branch 895 Highway 321 North Lenoir City Food City Branch 300 Market Drive Roane County Kingston Branch 1204 N. Kentucky Street Lab Branch Oak Ridge National Laboratory Rockwood Wal-Mart Branch 1102 North Gateway Avenue Monroe County Madisonville Branch 4201 Highway 411 Sevier County Sevierville Branch 502 Dolly Parton Parkway ORNL Federal Credit Union Branch Union County Maynardville Food City Branch 4344 Maynardville Highway

16 Borrow Smart. Save Smarter.TM