MOVING YOU FORWARD FEDERALLY INSURED BY NCUA

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1 20 15 REPORT ANNUAL MOVING YOU FORWARD FEDERALLY INSURED BY NCUA

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3 Our Story Message from the CEO & Chairperson Financial Performance Audit Report; Management and Board of Directors A Look Back Community Involvement Products and Services TABLE OF CONTENTS

4 OUR STORY HISTORY Naveo Credit Union was founded in 1928 when twenty-seven Portuguese-Americans banded together to form a financial cooperative after finding it increasingly difficult to access deposit and loan products from banks in the community. Naveo Credit Union, formerly Cambridge Portuguese Credit Union, was incorporated on March 2, 1928 as a place where the community could deposit their savings with confidence and borrow money at low rates of interest. In 2014, the Credit Union changed its name to Naveo Credit Union to complement the changing demographics of the area by becoming an inclusive institution, one that is welcoming to everyone in the community. ABOUT US Naveo Credit Union is a community credit union with branches in Cambridge and Somerville. Naveo Credit Union serves as a reliable partner and trusted resource for direction and advice on how to best navigate the complex and sometimes confusing financial landscape. At Naveo Credit Union, it s your journey. MISSION STATEMENT Guiding the financial lives of the people we serve in the neighborhoods where we live. 1

5 MESSAGE FROM THE CEO & CHAIRPERSON At Naveo we are proud to be your local member-owned, not-for-profit financial institution dedicated to meeting your needs. In 2015 we celebrated our first full year under our new name and it certainly was exciting. The Naveo brand was well received by our members and the community, only reaffirming that the change allowed us to be more inclusive and meet our neighbors needs. As a continuation of our name change, we introduced three new services in 2015 that provided members with additional convenience and investment options: Mobile Deposit, Shared Branching and Investment Services. Mobile Deposit gives our members the flexibility to deposit a check using their mobile device when it is convenient for them. We expanded our points of contact by joining the Shared Branching network, providing our members with more than 5,400 branches nationwide. Lastly, we introduced a new line of financial services that provide members with the opportunity to invest in a variety of products such as mutual funds and annuities, just to name a few. As an extension of financial planning, we also began offering a series of workshops on the basics of investing, estate planning, retirement planning and more. This year the Board of Directors continues to work with management to modernize our branches and provide a new, interactive experience for our members one that is reflective of the shift in member behaviors to utilize more convenience and mobile services. We anticipate these upgrades will provide an enhanced and more efficient banking experience in a space designed for comfort and convenience. As we mark the close of our 87th year serving you, we thank you for your support, trust and loyalty. We are proud to be your reliable partner and trusted resource for all things banking. We also commend our hardworking, dedicated staff and the leadership of our Board of Directors for their commitment to the credit union and ensuring we provide the best service to our members. Warmest regards, Rui F. Domingos Chief Executive Officer Maria L. Santos Chairperson of the Board 2

6 Comparative Balance Sheet (Unaudited) December 31, 2015 and 2014 Assets Statement of Income and Expenses (Unaudited) Years Ended December 31, 2015 and 2014 Income FINANCIAL PERFORMANCE Cash & Cash Equivalents $16,936,817 $7,267,414 Investments 39,240,870 45,844,800 Loans to Members 59,569,832 57,194,000 Allowance for Loan Losses (529,752) (538,395) Land, Building & Other Fixed Assets 744, ,207 NCUA Share Insurance Deposit 1,016,170 1,000,204 Other Assets 928,684 1,031,791 Total Assets $117,906,777 $112,644,021 Liabilities Accounts Payable & Other $575,332 $493,878 Liabilities Share Draft Accounts 17,912,802 16,052,909 Regular Share Accounts 60,314,175 55,273,355 All Other Share & Deposit Accounts 29,937,714 31,882,914 Total Liabilities $108,740,024 $103,703,056 Equity Regular Reserves $1,972,373 $1,972,373 Accumulated Unrealized Gains/ 72, ,965 (Losses) Undivided Earnings 7,121,822 6,746,627 Total Equity $9,166,753 $8,940,965 Investment Income $739,326 $879,102 Interest on Loans 2,687,010 2,558,134 Non-Interest income 852, ,286 Total Income $4,279,202 $4,088,522 Interest Expense Dividends on Shares $57,785 $54,845 Interest on Deposits 183, ,996 Interest on Borrowed Money 0 0 Total Interest Expense $241,739 $271,841 Non-Interest Expense Employee Compensation & Benefits $1,994,855 $2,055,425 Travel & Conference Expense 26,325 28,514 Office Occupancy Expense 180, ,766 Office Operations Expense 616, ,666 Educational & Promotional Expense 110, ,788 Loan Servicing Expense 61,172 66,065 Professional and Outside Services 566, ,007 NCUSIF Premium/ Corporate Stabilization 0 0 Operating Fees 36,000 27,000 Misc. Operating Expenses 57,772 52,702 Total Non-Interest Expense $3,683,933 $3,683,933 Provision for Loan Losses $12,492 $(3,664) 3 Total Liabilities & Equity $117,906,777 $112,644,021 Net Income $375,196 $136,412

7 The Credit Union s financial soundness and quality of management are examined annually by the Commonwealth of Massachusetts Division of Banks and the National Credit Union Administration (NCUA). Naveo Credit Union is a member of the NCUA and the Cooperative Credit Union Association. These organizations support the objectives and concerns of the credit union movement, as well as assist with and promote the viability of individual credit unions. The audit committee oversees the operations of Naveo as required by law. The Board of Directors are appointed by the Credit Union membership with the responsibility MANAGEMENT Rui F. Domingos, Chief Executive Officer Albert Pinho, Vice President of Lending Janet M. Cicerano, Vice President of Human Resources Judith Murdoch, Senior Operations & Retail Officer Kevin George, Controller Michael Dwyer, Retail Manager Nicolle Medeiros, Retail Manager Susie Pereira, Assistant Retail Manager of reviewing the Credit Union operations. They also monitor the regulatory examination performed by the Division of Banks and NCUA, and oversee an annual certified opinion audit. Wolf & Company, P. C., certified public accountants, performed the audits for our fiscal years ended June 30, 2015 and In their opinion, the financial statements present fairly, in all material respects, the financial position of Naveo, the results of operations and related cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. BOARD OF DIRECTORS Maria L. Santos, Chairperson Liberal T. Batista, 1st Vice Chairman John C. Feitor, 2nd Vice Chairman Carlos R. Montemor, Treasurer Amilcar T. Da Silva, Assistant Treasurer Paul Ferreira, Secretary/Clerk Manuel DaSilva Isaac M. Machado Leontina Mancini Charles F. McCannon AUDIT REPORT 4

8 A LOOK BACK Naveo Credit Union is committed to building and sustaining the neighborhoods which it serves and continues to take an active role in the community by supporting the efforts of local organizations. Naveo s strategic partnerships with local non-profits and other organizations have better allowed us to bring value to the community beyond financial services. It is apparent to us that our members appreciate a local financial institution, especially when it goes beyond banking. Our efforts show that we truly believe in the credit union philosophy of people helping people. FOOD DRIVE TO BENEFIT SHC DAY OF PORTUGAL PARADE SCHOOL SUPPLY DRIVE FOR BGCMC

9 COSTUMED FOR A CURE COMMUNITY INVOLVEMENT At Naveo, we strive to connect with our membership beyond providing financial services while strengthening our involvement in the community. ECBA RIB FEST 3 Graces Productions Boston Children s Hospital Boston Portuguese Festival (BPF) Boys and Girls Club of Middlesex County (BGCMC) Cambridge Local First Cambridge Upper School, Cambridge Children s Miracle Network City of Somerville Community Cooks Credit Union Hope Initiative East Cambridge Business Association (ECBA) East Cambridge Little League Escola Portuguesa de Cambridge e Somerville, Inc. Girl Scout Brownie Troop 85079, Malden Inman Square Business Association Joe & Dorothy Chaves Foundation Kiwanis Club of Somerville Leukemia & Lymphoma Society Massachusetts Alliance of Portuguese Speakers (MAPS) Massachusetts Coalition for the Homeless RESPOND, Inc. Second Chances Somerville-Cambridge Elder Services Somerville Chamber of Commerce Somerville Council of PTAs Somerville Homeless Coalition (SHC) Somerville Local First Somerville Rotary Club Somerville Sports Club St. Anthony s Parish, Cambridge St. Anthony s Parish, Somerville St. Catherine of Genoa Parish The Welcome Project Toys for Local Children Toys for Tots Union Square Main Streets Woburn Travel Basketball COMMUNITY COOKS COOKING TEAM CARLOS FARIA & VICTOR DA SILVA SCHOLARSHIPS

10 PRODUCTS AND SERVICES SAVINGS PRODUCTS Statement Savings Passbook Savings Kid s Club Non-interest Bearing Savings Certificates IRAs Christmas Clubs PERSONAL CHECKING Secure Checking Eco Checking Money Market HOME LOANS Home Mortgages Home Equity Loans Home Equity Lines of Credit Mass Save Heat Loan Mortgage Refinancing CONSUMER LOANS New & Used Auto Loans Personal Loans Student Loans Mass Save Heat Loan Boat & RV Loans Bicycle Loan Dreamer Loan Construction Loan MasterCard Credit Card BUSINESS SERVICES Commercial Real Estate Loans Lines of Credit Term Loans Free Business Checking** Business Savings Business Money Market Payroll Services Merchant Services MasterCard Business Credit Card ADDITIONAL SERVICES ATM/Debit Card 24-Hour ATM Money Orders Wire Transfers Notary Public Official Checks Direct Deposit Automatic Payments Bank-by-Mail Telephone Transfers eaccess ibanking Mobile Banking Mobile Deposit estatements Online Loan Center Text/ Alerts Financial Calculators 24-7 Telephone Response **Check orders are excluded. 7 Your savings federally insured to at least $250,000 and backed by the full faith and credit of the United States Government, National Credit Union Administration, a U.S. Government Agency.

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12 Somerville Branch 493 Somerville Avenue Somerville, MA Cambridge Branch 251 Hampshire Street Cambridge, MA Drive-up available 24-7 Telephone Access NAVEO.CU ( ) naveo.org