It is our vision to be a dynamic catalyst for

Transcription

1 It is our vision to be a dynamic catalyst for and an essential element of their success. credit unions to succeed by providing indus education, and services. We create a collab that New adds Jersey value Credit through Union shared Leagueservices, c and 2014 innovative Annual Reportmarket development. It is ou namic catalyst for our members growth and of their success. We enable our member cred by providing industry leading advocacy, edu We create a collaborative environment tha shared services, consumer awareness, and i velopment. It is our vision to be a dynamic c bers growth and an essential element of th able our member credit unions to succeed b leading advocacy, education, and services. orative environment that adds value throu consumer awareness, and innovative market vision to be a dynamic catalyst for our mem essential element of their success. We enab unions to succeed by providing industry lea tion, and services. We create a collaborati adds value through shared services, consu novative market development. It is our visio alyst for our members growth and an essen success. We enable our member credit union viding industry leading advocacy, educatio

2 Table of Contents Vision and Mission Letter from the Chairman NJCUL Board of Directors NJCUL Staff NJ Credit Union Statistics Committee Appointments Committee Reports NJCUL Highlights Audited Financial Statements Member Credit Unions New Jersey Credit Union League 2014 Annual Report

3 Our Vision It is our vision to be a dynamic catalyst for our members growth and an essential element of their success. Our Mission We enable our member credit unions to succeed by providing industry leading advocacy, education, and services. We create a collaborative environment that adds value through shared services, consumer awareness, and innovative market development. New Jersey Credit Union League 2014 Annual Report 1

4 Letter from the Chairman Be Proud of Your League You know the feeling that you have when the U.S. National Anthem is played, or how you feel when you see your child graduate from college? That is the feeling that we are striving for at the New Jersey Credit Union League (NJCUL). We want you to be proud of the accomplishments of your League. But, after all, these are accomplishments that wouldn t be possible if it wasn t for the individual credit unions who support us and engage with us through their membership, their dues, and their volunteer hours. Much like your credit union, the NJCUL is governed by a volunteer board of directors who dedicate their time. As we meet, we make every effort to make decisions that benefit the majority of our members while representing the industry as well. We strive to be in the forefront of the credit union movement by finding out-of-the-box solutions for today s problems. Credit union leaders are encouraged to consider being a part of the board; we are always looking for good volunteers. Over the past year, NJCUL has set the stage by collaborating with the Maryland DC Credit Union Association and the California Credit Union League to launch a new CUSO-like company called Plexcity. Only a dream in the planning stage last year, I am proud to say that this dream is now a reality. By incorporating the back office functions of these three leagues, we will reduce expenses and free up resources so that we can continue to focus on the needs of our members. Our advocacy efforts haven t gone un-noticed. New Jersey credit unions kept pace with the industry in responding to the latest regulatory issues such as Risk Based Capital and Member Business Lending. Our League continues to distinguish itself as a strong voice and key resource, advocating and also providing background information to assist our member credit unions in letter/ campaigns and meetings with our legislators and regulatory agencies. Another area to be proud of is the Shared Compliance arm of our League. We have worked over the past few years not only to strengthen member credit unions compliance knowledge but also to offer our credit unions the ability to have a contracted part-time compliance person on-site to assist in these challenging times. The new Patronage Rebate is yet another innovative program. With this program any credit union has the opportunity to reduce their dues up to 15% simply by increasing their participation in NJCUL activities. This is a win-win for all! NJCUL s Education and Training area has also stepped it up a notch. The number of educational offerings with varied relevant topics will meet the needs of everyone in your organization. The Creative You program launched in 2014 is also a wonderful program that promotes and assists in innovative solutions from our very own credit unions staff. This is just another collaborative initiative to be proud of. With all things considered, I am very Proud of the NJCUL and what we have accomplished this year. With the participation of our members, I look forward to even more in the coming years. Sincerely, Linda McFadden Chairman New Jersey Credit Union League 2014 Annual Report 2

5 NJCUL Board of Directors Linda McFadden Chairman Tier B Leo Ardine Vice Chairman Tier C Christina Olender Secretary Tier A Andrew Jaeger Treasurer Tier B David Ardire Tier C Jay Flanagan Tier A Micheal Reilly Tier B Robert Steeves Tier C Tracy Sussmann Tier A New Jersey Credit Union League 2014 Annual Report 3

6 NJCUL STAff Greg Michlig President/CEO Chris Abeel Barbara Agin Marissa Anema Adrienne Bell Nicola Foggie Director of Governement Affairs Director of Education and Training Marketing and Communications Coordinator Controller Director of Compliance Sabrina Forano John Hendery Erika Miller Candice Nigro Donna Pancoast Compliance Specialist Business Consultant Compliance Specialist Director of Marketing and Communications Compliance Specialist Cindy Rashkin Executive Assistant/ Office Manager Yvette Segarra Manager of Special Events/ Meeting Planner Mary Zelinsky League Services Coordinator New Jersey Credit Union League 2014 Annual Report 4

7 NJ Credit Union Statistics New Jersey Median Asset Size By Institution Mid-Year 2014 $448 Million New Jersey Credit Unions Number of credit unions headquarterd in the state: 193 Estimated number of credit union memberships in the state: 971,918 Memberships in credit unions headquartered in the state: 1,057,862 $10 Million Banks CUs A small but significant presence in the community Credit unions represent a growing, but small segment of the state's financial sector. Banks control 96% of deposits in New Jersey. Big banks have aggressively expanded market share in the state and represent the biggest competitive challenge to the state's small institutions. New Jersey Mid-Year 2014 Market Share 3.8% 12.9% Out-of-state banks control 64% of total bank deposits in the state - a share that has increased by 34 percentage points over the past two decades. 83.3% Credit Unions Smaller Banks Largest 25 Banks New Jersey Average Interest Rates New Auto Credit Card Home Equity Used Auto 4.72% 2.53% 15.85% 11.77% 4.45% 4.65% 5.06% 2.84% A better deal for consumers The lower credit union average new car loan rate shown in the graph results in a savings of $1,477 over the life of a 5-year car loan (assuming an average $30,000 amount financed). Bank CU Bank CU Bank CU Bank CU A structural difference that produces big benefits Credit unions are not-for-profit financial cooperatives and, unlike banks, have no shareholders demanding a market return on their investment. This structural difference allows credit unions to pass profits on to their member-depositors in the form of lower loan interest rates, higher yields on savings and fewer/lower fees. Higher yields on savings Lower fees Lower loan rates Savings to non-members 2014 New Jersey Credit Union Financial Benefits Benefits arise from Credit Unions providing: $2.6 Million $9.2 Million $21.4 Million Total Member Benefits $55 Million $43.1 Million Source: Census, NCUA, FDIC, Informa Research Services Inc. and CUNA's Economics and Statistics Department. New Jersey Credit Union League 2014 Annual Report 5

8 NJ Credit Union Statistics Consumers Choose New Jersey Credit Unions as their Best Financial Partner The banking lobby has recently ramped-up its ongoing anti-credit union rhetoric. Credit unions manage less than 7% of financial institution assets in the US, while banks control nearly 94%. As the nation s only member-owned, democratically controlled financial institutions, credit unions remain an extremely popular financial alternative for more than 100 million Americans. Delivering Big Financial Benefits (in 2014) Higher yields on savings $2.6M Lower fees $9.2M Lower loan rates Savings to non-members $43.1M $21.4M Total New Jersey CU member benefits = $54.9 Million If New Jersey banks were structured like credit unions the $6.6 Billion they paid in stockholder dividends over the past decade would have instead been paid to small depositors. Building Stronger Communities of total mortgage applications 54% from low/moderate income borrowers are APPROVED by New Jersey Credit Unions. Percentage of total branches located in CDFI* investment areas New Jersey Credit Union branches 30.5% 17.1% *Community Development Financial Institutions New Jersey Bank branches Serving Tax-Paying Americans Taxing credit unions is a direct additional tax on consumers-owners who already bear substantial income tax burdens. 1,057,862 New Jersey credit union members paid an estimated total of $14.9 Billion in state and federal income taxes in the most recent federal tax year. If credit unions were taxed in 2014, the receipts would have accounted for only 0.05% of 2014 federal spending Funding federal government operations for ONLY Responding through Local Ownership and Control The public policy goal of strengthening, small, locally-owned businesses is achieved through the credit union tax status. In the for-profit banking sector this goal is similarly advanced when banks choose the tax advantage of Subchapter S status. Nationally: 2,188 Subchapter S banking institutions account for $543.7 Billion in assets New Jersey: 6 Subchapter S banking institutions account for $4.7 Billion in assets U.S. Federal Revenue Losses due to Bank Subchapter S Election $9.8 BILLION since 1997 Source: CUNA Estimates & FDIC New Jersey Credit Union League 2014 Annual Report 6

9 NJ Credit Union Statistics Loan and Savings Growth Trends Liquidity Risk Trends 15.6 Growth Rates (%) 71.8 Loan-to-Savings Ratio (%) Loan Growth Savings Growth Credit Risk Trends Interest Rate Risk Trends Asset Quality (%) Long-Term Assets as a Percent of Total Assets Day Dollar Delinquency (right) Net Chargeoffs (left) Earnings Trends Solvency Trends ROA Trends bp of Average Assets Net Worth Ratio Profile (%) NW Ratio (right) Percent of CUs > 7% (left) New Jersey Credit Union League 2014 Annual Report 7

10 NJ Credit Union Statistics Results By Asset Size Loan and Savings growth Liquidity Risk Exposure Growth Rates By Asset Size Categogy (%) Loan-to-Savings Ratio (%) By Asset Size Category < $20Mil $20-$50 $50-$100 $100-$250 $250-$500 $500-$1B > $1 Bil Loan Growth Savings Growth < $20Mil $20-$50 $50-$100 $100-$250 $250-$500 $500-$1B > $1 Bil Credit Risk Exposure Interest Rate Risk Exposure Asset Quality By Asset Size Category < $20Mil $20-$50 $50- $100 $100- $250 $250- $500 $500- $1B > $1 Bil Long-Term Assets as a Percent of Total Assets by Asset Size Category Day Dollar Delinquency (left) Net Chargeoffs (right) < $20Mil $20-$50 $50-$100 $100-$250 $250-$500 $500-$1B > $1 Bil Earnings Solvency ROA in Basis Points by Asset Size Category < $20Mil $20-$50 $50-$100 $100- $250 $250- $500 $500-$1B > $1 Bil Net Worth Ratios by Asset Size Category (Percent of Assets) ROA (left) Percent with positive ROA (right) < $20Mil $20-$50 $50-$100 $100-$250 $250-$500 $500-$1B > $1 Bil New Jersey Credit Union League 2014 Annual Report 8

11 NJ Credit Union Statistics Overview by Year U.S. CUs Demographic Information Number of CUs 6, Assets per CU ($ mil) Median assets ($ mil) Total assets ($ mil) 1,136,122 12,502 Total loans ($ mil) 723,432 6,703 Total surplus funds ($ mil) 366,457 5,336 Total savings ($ mil) 963,116 11,030 Total members (thousands) 100,512 1,046 Growth Rates Total assets Total loans Total surplus funds Total savings Total members % CUs with increasing assets Earnings - Basis Pts. Yield on total assets Dividend/interest cost of assets Net interest margin Fee & other income * Operating expense Loss Provisions Net Income (ROA) with Stab Exp Net Income (ROA) without Stab Exp % CUs with positive ROA Capital adequacy Net worth/assets % CUs with NW > 7% of assets Asset quality Delinquencies (60+ day $)/loans (%) Net chargeoffs/average loans Total borrower-bankruptcies 169,396 1,270 Bankruptcies per CU Bankruptcies per 1000 members Asset/Liability Management Loans/savings Loans/assets Net Long-term assets/assets Liquid assets/assets Core deposits/shares & borrowings Productivity Members/potential members (%) 5 5 Borrowers/members (%) Members/FTE Average shares/member ($) 9,582 10,543 Average loan balance ($) 13,261 13,422 Employees per million in assets Structure Fed CUs w/ single-sponsor Fed CUs w/ community charter Other Fed CUs CUs state chartered New Jersey Credit Union Profile New Jersey CUs Year End 2014 Earnings, net chargeoffs, and bankruptcies are year-to-date numbers annualized. Due to significant seasonal variation, balance sheet growth rates are for the trailing 12 months. US Totals include only credit unions that are released on the NCUA FOIA file. Source: NCUA and CUNA E&S. New Jersey Credit Union League 2014 Annual Report 9

12 NJ Credit Union Statistics Demographic Information Number of CUs 6, Assets per CU ($ mil) Median assets ($ mil) Total assets ($ mil) 1,136,122 12,502 12,465 12,518 11,918 11,454 11,022 9,858 Total loans ($ mil) 723,432 6,703 6,531 6,296 6,297 6,335 6,283 5,942 Total surplus funds ($ mil) 366,457 5,336 5,489 5,781 5,211 4,747 4,327 3,593 Total savings ($ mil) 963,116 11,030 11,093 11,082 10,511 10,041 9,566 8,274 Total members (thousands) 100,512 1,046 1,061 1,066 1,056 1,056 1,073 1,077 Growth Rates Total assets Total loans Total surplus funds Total savings Total members % CUs with increasing assets Earnings - Basis Pts. Yield on total assets Dividend/interest cost of assets Net interest margin Fee & other income * Operating expense Loss Provisions Net Income (ROA) with Stab Exp Net Income (ROA) without Stab Exp % CUs with positive ROA Capital adequacy Net worth/assets % CUs with NW > 7% of assets Asset quality Delinquencies (60+ day $)/loans (%) Net chargeoffs/average loans Total borrower-bankruptcies 169,396 1,270 1,427 1,502 1,799 1,964 2,061 1,651 Bankruptcies per CU Bankruptcies per 1000 members Asset/Liability Management Loans/savings Loans/assets Net Long-term assets/assets Liquid assets/assets Core deposits/shares & borrowings Productivity Members/potential members (%) Borrowers/members (%) Members/FTE Average shares/member ($) 9,582 10,543 10,451 10,400 9,954 9,505 8,915 7,681 Average loan balance ($) 13,261 13,422 13,339 14,151 14,729 14,450 14,462 14,183 Employees per million in assets Structure U.S. Overview: State Trends New Jersey Credit Union Profile New Jersey Credit Unions Year End 2014 New Jersey Credit Union League 2014 Annual Report 10

13 NJ Credit Union Statistics New Jersey Credit Union Profile Year End 2014 Overview: State Results by Asset Size NJ New Jersey Credit Union Asset Groups Demographic Information 2014 < $20Mil $20-$50 $50-$100 $100-$250 $250-$500 $500-$1B > $1 Bil Number of CUs Assets per CU ($ mil) ,076.8 Median assets ($ mil) ,076.8 Total assets ($ mil) 12, ,268 2,368 2, ,154 Total loans ($ mil) 6, ,419 1, ,015 Total surplus funds ($ mil) 5, ,991 Total savings ($ mil) 11, ,138 2,128 2, ,645 Total members (thousands) 1, Growth Rates Total assets Total loans Total surplus funds Total savings Total members % CUs with increasing assets Earnings - Basis Pts. Yield on total assets Dividend/interest cost of assets Net interest margin Fee & other income * Operating expense Loss Provisions Net Income (ROA) with Stab Exp Net Income (ROA) without Stab Exp % CUs with positive ROA Capital adequacy Net worth/assets % CUs with NW > 7% of assets Asset quality Delinquencies (60+ day $)/loans (%) Net chargeoffs/average loans Total borrower-bankruptcies 1, Bankruptcies per CU Bankruptcies per 1000 members Asset/Liability Management Loans/savings Loans/assets Net Long-term assets/assets Liquid assets/assets Core deposits/shares & borrowings Productivity Members/potential members (%) Borrowers/members (%) Members/FTE Average shares/member ($) 10,543 5,215 8,384 6,405 8,385 10,538 17,845 22,587 Average loan balance ($) 13,422 6,429 10,607 8,849 10,701 14,334 28,228 22,785 Employees per million in assets New Jersey Credit Union League 2014 Annual Report 11

14 NJ Credit Union Statistics U.S. Growth Rates Credit cards 7.9% 0.1% 1.5% -0.7% -3.3% 2.0% 8.8% 5.8% Other unsecured loans 10.0% 3.1% -2.7% 3.5% -8.4% 9.3% 4.6% 1.2% New automobile 20.9% 13.0% -20.3% -7.9% -13.4% -19.3% -4.7% -10.7% Used automobile 12.9% 10.6% 26.3% 3.7% 3.4% 4.1% 11.9% -2.6% First mortgage 9.1% 1.2% 5.8% -0.1% 4.0% 6.9% 19.0% 10.1% HEL & 2nd Mtg 1.3% -4.8% -8.3% -7.1% -8.7% -7.0% -6.4% 1.9% Member business loans 12.4% 12.5% 12.7% 14.3% 20.7% 15.7% 56.9% 69.3% Share drafts 10.3% 4.1% 2.2% 13.1% 9.2% 7.8% 14.4% 1.3% Certificates -1.3% -4.0% -9.5% -5.1% -5.5% -9.5% 7.2% 3.1% IRAs -2.0% -3.8% -2.4% 1.9% 4.8% 4.4% 17.1% 17.8% Money market shares 3.1% -6.7% 1.4% 4.7% 6.0% 16.1% 29.9% 13.9% Regular shares 8.0% 4.5% 3.5% 9.0% 7.8% 10.7% 14.4% 3.1% Portfolio $ Distribution Credit cards/total loans 6.4% 5.3% 5.4% 5.5% 5.5% 5.7% 5.6% 5.5% Other unsecured loans/total loans 4.5% 7.6% 7.6% 8.1% 7.8% 8.5% 7.8% 7.9% New automobile/total loans 12.0% 4.1% 3.7% 4.9% 5.3% 6.1% 7.6% 8.4% Used automobile/total loans 20.1% 11.5% 10.7% 8.8% 8.4% 8.1% 7.9% 7.4% First mortgage/total loans 41.0% 43.3% 43.9% 43.1% 43.1% 41.2% 38.9% 34.6% HEL & 2nd Mtg/total loans 10.1% 18.5% 20.0% 22.6% 24.3% 26.4% 28.7% 32.4% Member business loans/total loans 7.4% 8.5% 7.7% 7.1% 6.2% 5.1% 4.5% 3.0% Share drafts/total savings 13.8% 14.0% 13.4% 13.2% 12.3% 11.7% 11.4% 11.6% Certificates/total savings 19.9% 15.3% 15.9% 17.6% 19.5% 21.6% 25.1% 27.1% IRAs/total savings 8.1% 9.0% 9.3% 9.5% 9.8% 9.8% 9.9% 9.8% Money market shares/total savings 23.0% 12.9% 13.7% 13.6% 13.7% 13.5% 12.2% 10.9% Regular shares/total savings 33.8% 46.0% 43.7% 42.3% 40.9% 39.7% 37.6% 38.0% Percent of CUs Offering Credit cards 57.6% 39.0% 35.7% 33.3% 32.0% 31.1% 31.8% 30.7% Other unsecured loans 98.2% 94.7% 95.4% 94.5% 96.1% 96.6% 96.2% 98.1% New automobile 95.1% 86.1% 85.2% 86.1% 86.2% 86.4% 85.8% 85.6% Used automobile 96.4% 85.0% 83.7% 83.1% 84.2% 83.0% 82.0% 81.4% First mortgage 64.9% 49.2% 46.4% 46.3% 43.3% 41.7% 41.2% 40.5% HEL & 2nd Mtg 69.4% 56.7% 56.1% 56.2% 56.7% 57.8% 57.3% 56.7% Member business loans 35.8% 20.9% 20.9% 19.9% 18.2% 18.0% 15.2% 13.0% Share drafts 78.0% 59.4% 57.7% 56.7% 56.2% 56.3% 55.9% 53.0% Certificates 79.1% 62.0% 60.7% 59.7% 60.6% 59.2% 60.7% 59.5% IRAs 66.7% 48.7% 47.4% 47.3% 48.8% 47.6% 46.9% 51.2% Money market shares 48.0% 31.6% 31.1% 30.3% 30.0% 29.6% 28.9% 28.4% Penetration Credit cards 18.4% 13.9% 14.4% 14.5% 15.3% 16.7% 16.3% 15.8% Other unsecured loans 12.1% 12.8% 13.8% 12.2% 12.2% 13.8% 13.3% 13.5% New automobile 4.6% 1.9% 1.8% 2.3% 2.6% 3.2% 3.8% 3.7% Used automobile 13.0% 8.6% 7.5% 5.6% 5.1% 5.0% 4.9% 4.5% First mortgage 2.3% 1.7% 1.7% 1.5% 1.6% 1.5% 1.4% 1.2% HEL & 2nd Mtg 2.2% 2.9% 3.0% 3.2% 3.6% 3.9% 4.1% 4.3% Member business loans 0.3% 0.3% 0.3% 0.3% 0.3% 0.6% 0.2% 0.2% Share drafts 54.8% 44.3% 43.7% 44.6% 43.3% 42.3% 41.0% 41.1% Certificates 8.8% 8.6% 9.3% 10.4% 11.5% 12.7% 13.8% 13.6% IRAs 5.2% 4.6% 4.9% 5.1% 5.9% 6.0% 5.3% 5.0% Money market shares 7.6% 4.5% 4.8% 5.1% 5.3% 5.3% 5.2% 5.0% * Current period flow statistics are trailing four quarters. Source: NCUA and CUNA E&S. Portfolio: State Trends New Jersey Credit Union Profile New Jersey Credit Unions Year End 2014 New Jersey Credit Union League 2014 Annual Report 12

15 NJ Credit Union Statistics New Jersey Credit Union Profile Year End 2014 Growth Rates 2014 < $20 Mil $20-$50 $50-$100 $100-$250 $250-$500 $500-$1Bil > $1Bil Credit cards 0.1% 1.5% 5.5% -1.3% 1.6% 11.6% 14.3% -5.5% Other unsecured loans 3.1% -1.1% -1.1% 7.5% 13.1% 6.4% 5.1% -7.6% New automobile 13.0% 3.6% 7.3% 7.4% -2.3% 55.0% -8.7% 18.7% Used automobile 10.6% 7.1% 10.1% 3.3% 29.2% 12.6% 12.7% -1.6% First mortgage 1.2% 3.8% 9.3% -1.6% 2.8% -0.2% -0.8% 4.3% HEL & 2nd Mtg -4.8% 0.6% 1.0% 2.4% -5.6% -1.0% 5.9% -6.7% Member business loans 12.5% 17.0% 12.8% 11.3% 29.7% -1.3% 10.0% 18.6% Share drafts 4.1% 8.2% 10.3% 9.2% 3.5% 10.1% 9.1% 2.2% Certificates -4.0% -7.8% -7.5% -4.9% -3.5% -2.0% -7.5% 3.6% IRAs -3.8% -4.2% -6.8% -5.5% -12.2% -3.3% -5.3% 0.4% Money market shares -6.7% -6.6% -6.4% -1.0% -2.4% -5.6% -4.0% -12.6% Regular shares 4.5% 0.2% 1.0% 4.5% 2.3% 6.7% -0.4% 12.2% Portfolio $ Distribution Credit cards/total loans 5.3% 2.8% 4.4% 7.8% 4.0% 3.5% 4.7% 7.4% Other unsecured loans/total loans 7.6% 36.9% 15.6% 11.4% 10.2% 5.3% 3.5% 1.3% New automobile/total loans 4.1% 12.1% 7.9% 4.5% 5.0% 5.2% 1.5% 1.1% Used automobile/total loans 11.5% 17.3% 13.5% 14.5% 14.9% 14.5% 3.4% 6.0% First mortgage/total loans 43.3% 10.7% 29.6% 28.3% 26.4% 38.3% 65.7% 67.3% HEL & 2nd Mtg/total loans 18.5% 11.4% 23.0% 24.9% 23.2% 25.2% 11.9% 9.2% Member business loans/total loans 8.5% 2.5% 1.8% 4.7% 9.7% 8.1% 12.5% 10.5% Share drafts/total savings 14.0% 5.9% 8.0% 12.6% 16.3% 17.6% 15.7% 13.5% Certificates/total savings 15.3% 12.4% 18.2% 14.1% 17.3% 19.7% 28.4% 10.2% IRAs/total savings 9.0% 3.2% 7.2% 5.7% 6.0% 6.8% 6.1% 14.8% Money market shares/total savings 12.9% 3.5% 7.6% 10.5% 16.3% 21.1% 29.2% 7.3% Regular shares/total savings 46.0% 72.8% 57.2% 56.6% 41.9% 33.9% 20.6% 48.6% Percent of CUs Offering Credit cards 39.0% 16.2% 51.9% 94.1% 86.7% 100.0% 100.0% 100.0% Other unsecured loans 94.7% 91.5% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% New automobile 86.1% 77.8% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Used automobile 85.0% 76.1% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% First mortgage 49.2% 24.8% 74.1% 100.0% 100.0% 100.0% 100.0% 100.0% HEL & 2nd Mtg 56.7% 32.5% 92.6% 100.0% 100.0% 100.0% 100.0% 100.0% Member business loans 20.9% 5.1% 22.2% 29.4% 80.0% 100.0% 100.0% 50.0% Share drafts 59.4% 37.6% 88.9% 100.0% 100.0% 100.0% 100.0% 100.0% Certificates 62.0% 44.4% 85.2% 100.0% 93.3% 100.0% 100.0% 50.0% IRAs 48.7% 26.5% 66.7% 100.0% 93.3% 100.0% 100.0% 100.0% Money market shares 31.6% 9.4% 44.4% 76.5% 86.7% 100.0% 100.0% 50.0% Penetration Credit cards 13.9% 15.5% 12.3% 12.1% 9.7% 11.0% 21.9% 24.8% Other unsecured loans 12.8% 23.1% 15.3% 11.5% 13.3% 10.1% 13.2% 8.3% New automobile 1.9% 2.1% 2.0% 1.8% 1.7% 2.8% 1.2% 0.9% Used automobile 8.6% 4.5% 5.7% 6.9% 7.3% 14.1% 3.8% 10.4% First mortgage 1.7% 2.2% 1.4% 0.8% 1.0% 1.8% 3.8% 3.5% HEL & 2nd Mtg 2.9% 1.3% 2.6% 2.1% 2.9% 3.8% 3.8% 3.2% Member business loans 0.3% 0.3% 0.1% 0.3% 0.3% 0.2% 0.3% 0.3% Share drafts 44.3% 27.0% 36.2% 33.8% 40.7% 49.3% 46.3% 66.5% Certificates 8.6% 6.9% 8.1% 4.7% 6.7% 8.8% 24.4% 15.2% IRAs 4.6% 3.4% 4.6% 2.6% 4.1% 5.3% 5.8% 7.0% Money market shares 4.5% 4.4% 3.6% 2.4% 3.7% 4.3% 15.2% 6.6% * Current period flow statistics are trailing four quarters. Source: NCUA and CUNA E&S. Portfolio Detail: State Results by Asset Size NJ New Jersey Credit Union Asset Groups New Jersey Credit Union League 2014 Annual Report 13

16 NJ Credit Union Statistics New Jersey Credit Union Profile Year End 2014 New Jersey CU Profile - Quarterly Trends U.S. New Jersey Credit Unions Demographic Information Dec 14 Dec 14 Sep 14 Jun 14 Mar 14 Dec 13 Number CUs 6, Growth Rates (Quarterly % Change) Total loans Credit cards Other unsecured loans New automobile Used automobile First mortgage HEL & 2nd Mtg Member business loans Total savings Share drafts Certificates IRAs Money market shares Regular shares Total members Earnings (basis points) Yield on total assets Dividend/interest cost of assets Fee & other income * Operating expense Loss Provisions Net Income (ROA) * % CUs with positive ROA * Capital adequacy (%) Net worth/assets % CUs with NW > 7% of assets Asset quality (%) Loan delinquency rate - Total loans Total Consumer Credit Cards All Other Consumer Total Mortgages First Mortgages All Other Mortgages Total MBLs Ag MBLs All Other MBLs Net chargeoffs/average loans Total Consumer Credit Cards All Other Consumer Total Mortgages First Mortgages All Other Mortgages Total MBLs Ag MBLs All Other MBLs Asset/Liability Management Loans/savings Earnings & net chargeoffs are annualized quarterly results not seasonally adjusted. Growth rates are not annualized. Delinquency rates are 60+ day dollar delinquencies. Net chargeoffs are dollar chargeoffs net of recoveries. Totals include only credit unions that are released on the NCUA FOIA file. Source: NCUA and CUNA E&S. New Jersey Credit Union League 2014 Annual Report 14

17 NJ Credit Union Statistics New Jersey Credit Union Profile Year End 2014 Demographic Information 2014 < $20Mil $20-$50 $50-$100 $100-$250 $250-$500 $500-$1B > $1 Bil Number of CUs 6,398 2,931 1, Assets per CU ($ mil) ,730.7 Median assets ($ mil) ,661.5 Total assets ($ mil) 1,136,122 21,483 38,756 53, , , , ,340 Total loans ($ mil) 723,432 10,303 19,628 29,405 68,673 75, , ,772 Total surplus funds ($ mil) 366,457 10,683 17,777 22,070 38,839 39,055 48, ,065 Total savings ($ mil) 963,116 18,411 33,810 47,157 99, , , ,343 Total members (thousands) 100,512 3,770 5,028 6,303 12,134 11,672 14,559 47,046 Growth Rates Total assets Total loans Total surplus funds Total savings Total members % CUs with increasing assets Earnings - Basis Pts. Yield on total assets Dividend/interest cost of assets Net interest margin Fee & other income * Operating expense Loss Provisions Net Income (ROA) with Stab Exp Net Income (ROA) without Stab Exp % CUs with positive ROA Capital adequacy Net worth/assets % CUs with NW > 7% of assets Asset quality Delinquencies (60+ day $)/loans (%) Net chargeoffs/average loans Total borrower-bankruptcies 169,396 4,151 6,044 9,256 18,800 20,154 25,653 85,338 Bankruptcies per CU Bankruptcies per 1000 members Asset/Liability Management Loans/savings Loans/assets Net Long-term assets/assets Liquid assets/assets Core deposits/shares & borrowings Productivity Members/potential members (%) Borrowers/members (%) Members/FTE Average shares/member ($) 9,582 4,883 6,724 7,481 8,166 8,946 9,609 11,060 Average loan balance ($) 13,261 6,936 8,775 9,530 11,459 12,528 13,395 14,882 Employees per million in assets Structure Fed CUs w/ single-sponsor Fed CUs w/ community charter Other Fed CUs CUs state chartered Source: NCUA and CUNA E&S. Overview: National Results by Asset Size U.S. All U.S. Credit Unions Asset Groups Earnings, net chargeoffs, and bankruptcies are year-to-date numbers annualized. Due to significant seasonal variation, balance sheet growth rates are for the trailing 12 months. US Totals include only credit unions that are released on the NCUA FOIA file. New Jersey Credit Union League 2014 Annual Report 15

18 Committee Appointments Audit & Finance Committee Purpose The Audit Committee has the primary function of ensuring the integrity of the League s financial records: (i) the financial reports and other financial information developed by the League that is provided to the public and governmental bodies; (ii) the League s system of internal controls regarding finance, accounting and related compliance; and (iii) the League s auditing, accounting and financial reporting processes. Committee Members: Robert D. Steeves, Chairman Jay Flanagan Tracy Sussmann Compensation Committee Purpose The Compensation Committee (the Committee ) central role is to (i) retain and acquire the best talent to serve the membership (ii) be responsible for developing, implementing and monitoring an evaluation system and compensation for CEO (iii) ensure that there is a succession plan for the CEO. Committee Members: Andrew Jaeger, Chairman Linda McFadden David Ardire Governance Committee Purpose The Governance Committee (the Committee ) has the primary responsibility to: (i) establish criteria and qualifications for candidates to serve as Board Directors of the League (ii) review qualifications of candidates to serve as Board members, (iii) determine the composition of the Board and its committees, (iv) develop and implement the League s corporate governance guidelines. Committee Members: Leo Ardine, Chairman Christina Olender Michael Reilly Election Committee Purpose The Election Committee has the primary responsibility to oversee the election process of the League including the screening of potential candidates nominated by the membership. Committee Members: Tracy Sussmann, Chairman Leo Ardine Andrew Jaeger New Jersey Credit Union League 2014 Annual Report 16

19 committee reports 2014 Audit & Finance Committee Report The Audit Committee (the Committee ) has the primary function of ensuring the integrity of the League s: financial reports and other financial information developed by the League that is provided to the public and governmental bodies; system of internal controls regarding finance, accounting and related compliance; and auditing, accounting and financial reporting processes. For the year ended December 31, 2014, the Committee employed the firm of Sobel & Co., LLC, to perform the audit of the League and its subsidiaries. The audit included a financial review, a review of internal controls and policies, and a verification of expenses. The financial reports included a consolidated statement of financial position, consolidated statements of activities, consolidated statements of cash flows and related notes. All received an unqualified auditor s opinion. A copy of the consolidated audit results was included in the New Jersey Credit Union League s 2014 annual report. This work is performed at the direction of and in conjunction with the Audit Committee. The Committee continually works with management to strengthen the league s internal controls and operating procedures. They review the monthly financial statements in detail and insure that they are complete and accurate. The committee would like to thank management and staff for their assistance and cooperation throughout the year. Respectfully submitted, Robert D. Steeves, Chairman Jay Flanagan Tracy Sussmann Adrienne Bell, Staff Liaison 2014 Governance Committee Report The mandate of the Governance Committee is to focus primarily on board governance, bylaws and effectiveness of the board of directors. In 2014, the committee worked with the board to: make recommendations to adjust board practices to improve board effectiveness; research, recommend and implement by-law changes to facilitate a more effective association; identify areas for possible future bylaw changes that would improve governance, transparency and effectiveness. Looking forward, it is anticipated that in 2015 the committee will undertake the development of bylaw changes that will expand board director qualifications and improve league governance. As has been its practice, the committee will continue to manage and update the governance process such that it continues to facilitate board effectiveness. Thanks are offered to each committee member for their time and effort as well as to the whole board, for their support, openness and hard work in ensuring that the governance process remains effective. Respectfully submitted, Leo R. Ardine, Chairman Christina Olender Michael Reilly 2014 Foundation Committee Report In its eleventh year, the New Jersey Credit Union Foundation changed its look a bit in 2014, updating its logo, along with electing new officers and members to the Board. At its first board meeting and planning session of 2014, the New Jersey Credit Union Foundation elected Michael Hou, United Teletech Financial FCU, New Jersey Credit Union League 2014 Annual Report 17

20 Committee Reports as Chairperson; Tracy Sussmann, MidState FCU, as Vice Chair; and Greg Michlig, New Jersey Credit Union League, as Secretary/Treasurer. The board also appointed Michael Powers of Garden Savings FCU as a board member. With a brand update and some new roles on the board, the Foundation remained steadfast in its dedication to providing financial literacy, technical assistance to small credit unions, professional development opportunities and support for philanthropic activities in connection with New Jersey and the New Jersey credit union movement. At the start of the year, the Foundation hosted an informational session on the new Retirement Fair program, which, based on credit union interest, was then offered to New Jersey credit unions at no cost. The National Credit Union Foundation s REAL Solutions Program in cooperation with CUNA Mutual Group developed the new Retirement Fair to assist credit unions in helping their members better prepare for retirement. The Fair is an experiential learning experience, similar to the popular Financial Reality Fair program. The program is designed to get members of all ages, not just those nearing retirement, to think more carefully about the type of lifestyle they would like to pursue in retirement and then link it to their financial plan. Speaking of Reality Fairs, 2014 was the program s fourth year. New Jersey credit unions held seven Reality Fairs in 2014, involving middle school, high school and college students. The program has continued to grow and evolve to reach New Jersey s students with hands-on financial literacy experiences that work in conjunction with the state mandated personal financial literacy core curriculum standards. In 2014, the program reached nearly 1,170 students! The Foundation s partnership with the New Jersey Coalition for Financial Education is another driving force for financial literacy and wellness throughout the state. New Jersey credit unions can take advantage of this partnership by participating in any of the NJCFE events free of charge (either in-person or virtual) and also have access to resources through NJCFE for specific projects or programs at their individual credit unions. This partnership also provides the platform to further credit union awareness in the state and gives credit unions the opportunity to provide free financial education to their members and communities. Furthermore, the Foundation provided technical assistance to credit unions under $25 million in assets when it launched the XP Sunset Grant Program. The Foundation provided grants to assist those smaller credit unions that needed to upgrade their equipment and software in order to continue serving their members when faced with the discontinuation of Windows XP in April In addition to its popular Casino Night fundraising event, the Foundation continued its fundraising efforts through the AmazonSmile program, which it began in late This gives Foundation supporters an easy and automatic way to give to the Foundation in between fundraising events. The Foundation also introduced its Wine, Lose or Draw fundraiser during the Annual Meeting, which was enjoyed by many. The continued success of New Jersey Credit Union Foundation is largely due to its dedicated supporters and the Board would like to personally thank all those for their continued contributions and support. Respectfully submitted, 2014 Foundation Board Michael Hou, Chair Tracy Sussmann, Vice Chair Greg Michlig, Secretary/Treasurer Eileen Crean Rodney May Linda McFadden Michael Powers Cindy Rein-Zima Ann South New Jersey Credit Union League 2014 Annual Report 18

21 NJCUL highlights During the League s 80th Annual Meeting and Convention, Greg Michlig toasts to the League s 80 years of service to New Jersey s credit unions. In its February edition, NJ Business Magazine spotlighted New Jersey credit unions ability to make small-sized loans and provide other valuable services to small businesses in the state. In an effort to expand its consumer awareness reach, the League s newly-established marketing internship program spread the word via social media and events, such as the Belmar 5-Mile Run. The Banking You Can Trust table with giveaways are pictured above. The League Board of Directors seated at the 80th Annual Meeting. NJCUL took to social media channels on #DontTaxTuesday part three while 4,000+ CU advocates descended on the nation s capital during CUNA s GAC, including those from New Jersey. New Jersey credit unions saw the highest number of visitors ever to bankingyoucantrust.com during the first quarter of 2014 with more than 56% of the traffic can be attributed back to a secretive billboard campaign the League ran through its Banking You Can Trust advertising program using this simple billboard campaign. Happy Holidays from the League! NJCUL Director of Compliance Nicola Foggie shares NJ credit unions compliance issues and concerns with NJ NCUA examiners. New Jersey Credit Union League 2014 Annual Report 19

22 NJCUL highlights Lieutenant Governor Kim Guadagno shared her credit union story as a special guest of the League s 80th Annual Meeting & Convention (left). Convention keynote speaker Karen McCullough gave attendees them some inspiration (right). U.S. Sen. Cory Booker (D-NJ) hosted a forum at Rutgers University for women small business owners. At the invitation of Sen. Booker, NJCUL Chairman and XCEL FCU President/ CEO Linda McFadden was a panelist for the Access to Capital breakout session. It was a clean sweep Election Day 2014 for credit union-supported candidates for New Jersey s 14-member congressional delegation. Each of the 10 candidates whose campaign received CULAC support was successful. The League was present at numerous political events leading up to Election Day, including a Pascrell for Congress fundraiser (left) as well as a fundraiser for State Senator and 1st District congressional candidate, now Congressman Donald Norcross (D). The League and its member credit unions had some fun in Movember, growing facial hair and submitting status updates. The 26 participants resulted in a $1,040 donation to the Movember Movement! 2014 saw an offensive to address member credit unions concerns with the NCUA s proposed RBC rule. Top: NJCUL Chairman and XCEL FCU President/CEO Linda McFadden sharing her concerns with CUTimes following an NCUA listening session. Below: Total comment letters filed from New Jersey. Congratulations to the winner of the first year of the Creative You program, Team XCEL-lent! Mid-year, ComplySight, the League InfoSight Web compliance tool, was made available to member credit unions to help ease the regulatory burden. New Jersey Credit Union League 2014 Annual Report 20

23 Audited financial statements New Jersey Credit Union League 2014 Annual Report 21

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45 NJCUL Member Credit Unions 1st Bergen FCU ABCO FCU ACUME FCU Advanced Financial FCU Affinity FCU Andrews FCU Anheuser-Busch ECU Aspire FCU Atlantic City Electric Company EFCU Atlantic FCU Atlantic Health EFCU Baker FCU Bard EFCU Bay Atlantic FCU Bayonne City EFCU Bayonne School EFCU Bergen Division FCU Bloomfield Fire & Police FCU Bridgeton Onized FCU Camden Police FCU Campbell Employees FCU Central Jersey FCU City of Trenton ECU Clifton NJ Postal EFCU Colgate EFCU Community Financial Services FCU County Educators FCU Credit Union of New Jersey Deepwater Industries FCU Division 819 Transit ECU East Orange Firemen s FCU East Orange VAH FCU Elizabeth NJ Firemen s FCU Energy People FCU Entertainment Industries FCU Essex County Teachers FCU Essex Division Telephone FCU Fairleigh Dickinson FCU First Financial FCU First Jersey CU First Point FCU Fort Billings FCU Fort Dix FCU Garden Savings FCU Gateway Community Action CU Greater Alliance FCU Hamilton Horizons FCU Health Care of NJ FCU Healthcare EFCU Heard AME FCU Hope FCU I.L.A. Local 1235 FCU IFF EFCU Internet Archive FCU IRCO Community FCU Israel Memorial FCU Jersey Central FCU Jersey City Firemen FCU Jersey Shore FCU Kearny Municipal EFCU Lakehurst Naval FCU Liberty Savings FCU Linden NJ Police & Firemen FCU Local 1233 FCU M&C Menlo Park FCU Manville Area FCU New Jersey Credit Union League 2014 Annual Report 43

46 NJCUL Member Credit Unions McGraw-Hill FCU Members 1st of NJ FCU Mercer County NJ Teachers FCU Mercer County Improvement Authority EFCU Messiah Baptist Church FCU Mid-State FCU Monmouth County Postal ECU Montclair Postal ECU Motion FCU Nestle Freehold EFCU Newark Board of Education ECU Newark Police FCU Newark Post Office ECU NJ Gateway FCU NJ Law & Public Safety CU North Jersey FCU Novartis FCU Ocean County EFCU Parlin DuPont FCU Passaic Postal ECU Peoples Transport FCU Picatinny FCU Pinnacle FCU Piscataway Twp EFCU Plainfield Police & Firemen s FCU Polish & Slavic FCU Port Ivory FCU Postal ECU Princeton FCU Proponent FCU PS Burlington EFCU PSE FCU PSEG Nuclear EFCU Public Service FCU Rancocas FCU Raritan Bay FCU Renaissance Community Development CU Research 1166 FCU Rutgers FCU Saker Shop Rite FCU Salem Baptist FCU South Jersey Gas EFCU Southern Middlesex County Teachers FCU Terminals FCU Thunderbolt Area FCU Trenton NJ Firemen FCU Trenton NJ Police FCU Trenton Teachers FCU Unilever FCU Union County Employees FCU United Financial Services Community FCU United Poles FCU United Teletech Financial FCU Unity FCU VAH Lyons FCU Visions FCU West Hudson Teachers FCU West Orange Municipal FCU XCEED Financial FCU XCEL FCU New Jersey Credit Union League 2014 Annual Report 44

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48 It is our vision to be a dynamic catalyst for and an essential element of their success. credit unions to succeed by providing indus education, and services. We create a collab that adds value through shared services, c and innovative market development. It is ou namic catalyst for our members growth and of their success. We enable our member cred by providing industry leading advocacy, edu We create a collaborative environment tha shared services, consumer awareness, and i velopment. It is our vision to be a dynamic c bers growth and an essential element of th able our member credit unions to succeed b leading advocacy, education, and services. orative environment that adds value throu consumer awareness, and innovative market vision to be a dynamic catalyst for our mem essential element of their success. We enab unions to succeed by providing industry lea tion, and services. We create a collaborati adds value through shared services, consu novative market development. It is our visio alyst for our members growth and an essen success. We enable our member credit union viding industry leading advocacy, educatio