ANNUAL REPORT. A Higher Degree of Banking through. Connectivity

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1 ANNUAL REPORT A Higher Degree of Banking through Connectivity

2 ANNUAL REPORT David Markuson, Chairman of the Board, and Brian Ducharme, President/CEO Connectivity IS THE KEY TO SERVICE It is with great pride that we report once again MIT Federal Credit Union (MIT FCU) had a strong and prosperous year in Our mission to fulfill dreams and enrich the lives of others played out through an increased connection to our membership here on campus, within the Kendall Square Community and around the world. Selfservice and personalization are key factors in keeping up with expectations. Whether through enhanced technology, an increased presence in our immediate community, or simply by providing that personal touch in the branch, on the phone, or online, we continued to provide financial guidance, thereby enriching the lives of those individuals and families we serve. In 2017 we provided a variety of solutions to stay connected with our membership. These included: CONNECTING THROUGH PHYSICAL SPACE Our Student Center branch went through an extensive renovation to enhance the member experience. With added technology and an open floor plan design, we provided a new way to interact and serve members. The Virtual Teller Machine (VTM) was added both to our Student Center and Technology Square branches and were quickly adopted by members. To streamline operations, we also extended hours at our Tech Square branch so both Cambridge locations have the same branch hours. CONNECTING 24/7 With responsive site design (mobile and traditional), new online account opening options, ADA compliance and added digital services to manage accounts, we took great strides in 2017 towards being connected to our membership 24/7. Two of our more popular options included MyMobileMoney which offers the ability to turn access to debit cards off and on via your smart phone. Now travel alerts, fraud monitoring and spend tracking can be done from your phone with ease. We also provided an additional layer of security through biometrics with our fingerprint authentication for mobile banking. We continue to look for opportunities to grow in this area because as with all technology, change is a constant, and newer and better are always around the next corner. CONNECTING FACE TO FACE MIT FCU continued to support its members in their quest for financial security through a wealth of seminar offerings. Our Financially Empowered Women (FEW) series does that on a regular basis, and was recently recognized by CUNA for being unique in our industry relative to engaging with our community and providing an engaging and personalized opportunity for members and non-members to connect with subject matter experts while having fun learning. FEW seminars join the series of events offered by the credit union including Homebuyer Seminars and Lunch & Learns to educate members on financial planning and retirement. CONNECTING IN THE COMMUNITY As in previous years, MIT FCU offered numerous scholarships, charitable donations, sponsorships and other assistance to the community it serves. We have much to be thankful for in 2017 and look forward to yet another accomplished and successful year in We are fortunate to be part of such a forward thinking and revolutionary community. Every day we work with a membership that is part of creating a better world for tomorrow. We draw inspiration from this and look forward to being a part of the dreams and lives of our members today and tomorrow. Thank you for your continued support, trust, confidence and inspiration. David E. Markuson, Chairman of the Board Brian Ducharme, President/CEO

3 ANNUAL REPORT Treasurer s Report MIT Federal Credit Union continues to see positive growth both with membership and asset base in 2017 as reported by our Board of s. The key financial points that are evidence of this change are shown below. It is the teamwork and collaboration of all involved that results in MIT Federal Credit Union achieving this level of success in Heartfelt thanks are due to members, employees and volunteers for an achievement-filled year that positions us for continued growth and success in the coming year. Robert M. Dankese Treasurer Statement of Financial Condition ASSETS Cash & Cash Equivalents $ 17,874,319 $ 21,132,548 $ 12,516,890 Loans, Net 488,897, ,445, ,083,054 Investment Securities 24,629,377 38,307,509 50,684,401 All Other Assets 22,230,268 20,082,803 16,775,345 Total Assets $ 553,631,669 $ 520,968,024 $ 458,059,690 Total Assets: $553,631,669 Net Loans: $488,897,705 LIABILITIES Total Membership: 35,413 Net Income: $4,647,169 Member Shares & Deposits $ 505,760,550 $ 479,027,559 $ 419,560,508 Accounts Payable & Other Liabilities 4,724,559 3,619,300 3,475,778 Total Liabilities $ 510,485,109 $ 482,646,859 $ 423,036,286 Key Financial Data 35 TOTAL MEMBERS RETAINED EARNINGS Regular & Undivided Earnings 43,811,855 $ 39,164,686 $ 35,714,001 Unrealized Gain (Loss) on Investments (665,295) (843,521) (690,597) Total Retained Earnings $ 43,146,560 $ 38,321,165 $ 35,023, TOTAL ASSETS TOTAL RETAINED EARNINGS thousands of members ,093 34, ,413 TOTAL LIABILITIES & RETAINED EARNINGS $ 553,631,669 $ 520,968,024 $ 458,059,690 Statement of Income & Expense INCOME millions of dollars $458,059,690 $520,968,024 $553,631,669 $ 520,968,024 millions of dollars $35,023, $38,321,165 $43,146, Interest on Loans & Investments $ 19,960,852 $ 17,529,707 $ 15,410,137 Fees & Other Income 3,217,804 3,055,458 2,938,462 Total Income $ 23,178,656 $ 20,585,165 $ 18,348,599 EXPENSES Operating Expenses $ 17,055,714 $ 15,764,341 $ 14,456,929 Dividend Expense 1,308,113 1,338,295 1,271,177 Interest on Borrowings 167,660 31,844 14,486 Total Expenses $ 18,531,487 17,134,480 $ 15,742, NET INCOME $ 4,647,169 $ 3,450,685 $ 2,606, Please note these schedules reflect audited financial statements as of March 31, 2018.

4 ANNUAL REPORT Supervisory Report Helping Our Community The Supervisory Committee continues to perform its charter to ensure that the financial reporting requirements are properly completed and the credit union has effective procedures to safeguard members assets. The committee meets regularly to review the financial and internal control audits as well as other operational topics of interest. We are assisted in our efforts by outside firms that provide audit support of the credit union s finances, policies, and procedures. Internal audits continued to receive significant attention during Wolf & Company, P.C. performed fourteen planned internal audits during the year to test credit union procedures and controls in various areas including Student Loans, Residential and Consumer Lending, and Information Technology. They also assessed compliance with the Secure and Fair Enforcement Act (SAFE) and the Truth in Savings Act (TISA). Focus on information technology continued this year due to increasing occurrences of company security breaches. The committee reviewed the findings and management s responses, and actively worked with Wolf & Company, P.C. and MIT FCU management on the suggested areas for improving procedures, security, and controls. The financial statements, in all material respects, fairly present the financial position of MIT FCU as of December 31, The Supervisory Committee is charged to investigate and respond to unresolved member complaints against credit union management, as well as whistleblower allegations. All complaints and inquiries have been adequately investigated and resolved. MIT FCU is committed to the highest standards of ethical, moral, and legal business conduct. To support this commitment, each employee, manager, officer, and volunteer must submit a Conflict of Interest and Code of Ethics affirmation each year. The Supervisory Committee successfully completed this review and found no conflicts to report. The committee had one membership change this year. Ina Kundu joined as the student associate member. We look forward to serving the MIT FCU community in MIT Federal Credit Union is committed to helping our communities not only by providing valuable financial products and services, but also by extending the credit union s people helping people philosophy to multiple areas of life. Because we are entrusted with safeguarding our members money, we are responsible to make prudent decisions regarding our corporate citizenship efforts. Charitable Donations Categories: Scholarships cash awards distributed throughout the educational system Partnerships with Other Organizations Financial Literacy programs geared toward improving financial knowledge MIT Federal Credit Union contributed to the following organizations and causes: A Bed For Every Child Boston Children s Hospital Cambrige Community Gymnastics City Sprouts Credit Union House at Capitol Hill Credit Unions Kids at Heart Dana Farber Cancer Institute Food for Free Committee, Inc. Home for Little Wanderers Hurricane Relief Funds to benefit the victims of Hurricanes: Irma, Harvey and Maria Mass Coalition For The Homeless People Helping People Community Action Award Pine Street Inn Solutions at Work The committee continued to partner with audit firm, Nearman, Maynard and Vallez. The audit firm was engaged to perform our financial statements audit, which also included a review of internal controls. The committee met with the audit manager to review the scope, methods, and findings of their audit work. Stephen W. Boyer Chairman, Supervisory Committee Left: MIT Federal Credit Union Scholarship Award winners with President/CEO Brian W. Ducharme. Below: Brian W. Ducharme participates in Share the Magic Foundation s Read with Malcom initiative. SUPERVISORY COMMITTEE Stephen W. Boyer Chairman Karon S. McCollin Committee Member Jordan B. Lewis Secretary Theresa Howell Associate Committee Member Steven Winig Board of s Representative Ina Kundu Student Associate Committee Member

5 ANNUAL REPORT STUDENT CENTER RENOVATION In March of 2017 the MIT Student Center branch went through a definitve change. In doing so we introduced the ability to get cash at the branch, and provide members with the ability to apply for loans and open accounts independently as an option to a traditional teller line. NEW AND NOTEWORTHY Meghan Melvin, Marketing Specialist, holds the CUNA Excellence in Marketing and Business Development award. Pictured with her are Clinton Blackburn, MIT FCU Board Member, and Madeline Anderson-Balmer, Marketing Manager. F.E.W. seminar Too Much is Never Enough: How to Make the Most of Money, Food & Everything Else. Attendees tasted various kombucha and ciders. FINANCIALLY EMPOWERED WOMEN (F.E.W.) The credit union was honored by the National Credit Union Association (CUNA) with one of two Excellence in Marketing and Business Development awards. F.E.W. was recognized for being unique in our industry by providing engaging and personalized opportunities for members and non-members. These educational oportunities enable the attendees to connect with subject matter experts while having fun and learning in the process. SELECT EMPLOYEE GROUPS F.E.W. FINANCIALLY EMPOWERED WOMEN Be one of the FEW Virtual Teller Machines (VTMs) Cash a check, make a deposit or loan payment, withdraw cash or transfer funds without the need for credit union staff onsite. Tech Bar Set of four ipads situated in the member service area self-service, loan applications, membership applications, and product/service research. Wall Mounted ipad Available 24/7 for self-service and product/ service research, ADA compliant. Student Center branch VTMs Members of the MIT FCU Executive Team at the Reopening Reception on 3/16/17. (L-R) Kim Mandola, SVP, Member Services; Lisa Mandel, VP Information Technology; Brian Ducharme,President/CEO; Scott Hanna, VP Marketing; Cindy Hudson, CFO; Nancy Fales, SVP, Lending; Kendall Nowocin, Associate Board Member VIRTUAL TELLER MACHINES (VTMs) Two VTMs were installed at our Student Center branch and one VTM was installed at our Tech Square branch. VTMs provide self-service convenience while maintaining a personal touch. They allow members to perform many financial transactions, only on a much greater scale than an ATM, and with the help of a real-time virtual teller. A member performs a transaction at the Technology Square branch We welcomed these companies to the MIT Federal Credit Union community.

6 CREDIT UNION LEADERSHIP Board of s David E. Markuson Chairman Richard B. Flanagan Vice Chairman Robert M. Dankese Treasurer 2017 MEMBER PERSPECTIVE a sample of what our members are saying about us Maureen A. McCaffrey Secretary John M. McDonald Clinton Blackburn I ve been with MIT FCU for over twenty years. You have been the backbone and rock for my financial stability. I ve always recommended the credit union. Your customer service has always been first rate. The managers and others have been knowledgeable, professional and friendly. Rebecca Rahmlow Steven Winig Francesca DeMeo Senior Management Brian W. Ducharme President/Chief Executive Officer Nancy J. Fales Senior Vice President, Lending & Operations Cynthia M. Hudson Senior Vice President, Chief Financial Officer The turnaround time in approving loans is exceptional! The whole loan department staff go above and beyond to help. You ve come up with solutions that no other institution would even consider. Kim Mandola Lisa Mandel Scott Hanna Senior Vice President Member Services Vice President, Information Technology Vice President, Marketing

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