President s Report Mina Worthington

Transcription

1 2014 ANNUAL REPORT

2 President s Report Mina Worthington The last several years of economic uncertainty and political inertia have undoubtedly caused changes for many of us. Our community and our membership have experienced the ups and downs caused by this extended adjustment in our national and global economy. While some businesses ceased during this time of extraordinary change, those that embraced new innovation and technology flourished. It is evident that businesses that do not anticipate the massive disruption imposed by new technologies, or that chose to ignore it and maintain the status quo of outdated practices, cannot be relevant to their customers in the future. Let me share the story of Blockbuster Video. This business once had storefronts on many busy street corners in cities across the US. Their industry changed, and they did not. I, personally, did not want Blockbuster Video to change. I enjoyed perusing the parameter of the store looking for new releases, and I would rent multiple videos at a time. I was a good and loyal account holder! And so, Blockbuster Video kept its old business model to satisfy customers like me, while competitors with much more efficient and convenience-focused business models like Netflix and Red Box entered the industry, stole market share, and eventually put them out of business. Today, there are a lot of empty or repurposed Blockbuster Video stores because of their decision not to revise their way of doing business. Studies have shown that over 60% of the incoming generation of potential financial institution customers say that they would rather bank with technology providers such as Apple than a credit union or bank. Our assessment internally is that the financial services industry is facing imminent and massive disruption much like Blockbuster Video chose to ignore 10 years ago. In the 21st Century, adapting to changes in technology and consumer preferences is literally a never ending and ever expanding business necessity. As you see your credit union evolving to keep pace with these

3 technological innovations, it is important to us that our members understand the why behind what is driving these changes. We must change so that we can thrive within a disrupted business environment to be relevant to our members today and for their future benefit. In the year 2014, we have seen substantial increases in our membership s use of our electronic services. We implemented online account opening with an enhanced online loan application to meet the growing demands of the marketplace. In 2015, we are implementing mobile versions of these programs, and we will continue to upgrade existing services and invest in new services and technologies to fulfill the needs of our members. Rest assured, your credit union remains financially strong, stable, and viable in this new environment. In order to maintain this relevancy and continue as a strong service provider, we must adapt to evolving consumer preferences. We remain vigilant to budding discoveries and service options that sprout from this disrupted environment while keeping the best interests of our members and the sustained viability of this organization as our first priority. I invite you to embrace the many new system and process enhancements we have introduced for your convenience and benefit. Thank you for your membership and loyalty and we look forward to serving you in 2015 and beyond. We must change so that we can thrive within a disrupted business environment to be relevant to our members today and for their future benefit.

4 Chairman s Report Gary Kissling 2014 was a great year for your credit union. Solarity home loan products and services made your credit union the top home mortgage lender in Yakima and Kittitas counties. Vehicle loan products were also popular, helping many members purchase cars, trucks and recreational vehicles. Thank you for using your credit union, and please remember Solarity for your future borrowing needs. Please also consider referring a friend for their borrowing needs. Your credit union will continue to grow and evolve through 2015 and into the future, with an engaged and fully committed management team ready to address the ever-changing needs of your organization. A routine examination conducted by both the Washington State Department of Financial Institutions (state regulator) and the National Credit Union Administration (federal regulator) resulted in an exemplary rating for Solarity. Rest assured, your credit union is safe, sound and well run. Your Board of Directors is proud of the progress made by the Chief Executive Officer and the entire management team. Together, your board and management team are committed to providing you our Solarity members with exceptional products and service. Going forward, we have plans to enhance your choice of online products, including website, home banking, and mobile banking upgrades. Take advantage of the online services for a quicker and less costly way to make deposits and pay bills. As I have stated throughout my remarks, Solarity is your credit union. Let us know how we are doing. Please feel free to contact any member of the Solarity staff or a board member. We welcome your feedback. Gary Kissling, Chairman; Jerry Kobes, Vice Chair; Terry Morgan, Secretary; Craig Baird; Doug Nicholson; Jim Hurley; JoAnn Miller-Rose; Mark Chmelewski; Michael Meyer; Jeffery Meyer; Brenda George

5 2014 COMMUNITY SPONSORSHIPS & MAJOR PARTNERSHIPS Children s Miracle Network/CU4Kids CWHBA First Tee of Yakima Foundation at Kittitas Valley Healthcare Junior Achievement Junior League of Yakima Kittitas County Association of Realtors Kittitas County Fair Memorial Hospital Foundation Moxee Hop Festival Selah Community Days Toppenish 4th of July Rodeo Yakima Association of Realtors Yakima Greenway Yakima Schools Foundation Yakima Symphony and Yakima Youth Symphony AWARD WINNING SEMINAR PROGRAM seminars, Educated over 250 members on various financial topics TAUGHT 7 CLASSES IN THE SCHOOL YEAR VOLUNTEERED OVER 70 HOURS

6 2014 $65, HEADLINE SPONSORSHIPS Case of the Blues Sunfair Festival First Tee of Yakima Sports Commission Lunch IN COLLEGE SCHOLARSHIPS

7 Supervisory Committee Report Doug Partlow The Supervisory Committee monitors the activities of your credit union to ensure that safety and soundness remain at the highest level. This committee meets monthly and devotes many hours in reviewing the operations of the credit union. Our purpose is to serve the members through a process of internal auditing as well as contracting annually with a CPA firm to perform more comprehensive audits. This past year we contracted with the firm Orth, Chackler, Murnane & Co; CPAs for our annual audit. We also contracted with Trace Security to perform an IT audit. The credit union has Internal Auditors who work in conjunction with the Supervisory Committee to provide critical analysis of credit union functions. These auditors are an invaluable asset and through their comprehensive work give the Supervisory Committee reports which enable the committee to make decisions which help protect you, the member. The committee is currently comprised of five members, including Past Board President Jim Hurley. In the future the committee will continue to have a Board member representative. Members of senior management have attended meetings to provide input on current operations and to answer questions. Our credit union staff liaison is Tina Torres, Vice President of Risk Management, who acts as our recording Secretary and also supervises the Internal Audit team. Tina has been a tremendous asset to the committee, providing us with the needed reports and documentation to complete our task. The Board of Directors deserves thanks for their support of the Supervisory Committee. A Supervisory Committee member regularly attends the monthly board meeting. The administrative staff of the credit union also contributes greatly to this committee through their on-going support and guidance. This year s members of the committee were able to take advantage of continuing education opportunities. Up-to-date training helps the committee members stay abreast of national credit union trends and provides each committee member with the means to increase their skill level and expertise. A new year of challenge and opportunity awaits the dedicated volunteers of the Supervisory Committee as we continue to serve our members. Supervisory Committee: Douglas Partlow-Chairman, Kay Gamache-Vice Chairman, Linda Kane-Secretary, Ken Flaks-Committee member and Jim Hurley, Board representative.

8 2014 MILESTONES MARCH Member Contact Center established JUNE Branch consolidation Facilities NOVEMBER North 5th remodel to expand Contact Center complete Member Business Services JANUARY Member Business Services established JULY Reclassification of Member Business Service accounts NOVEMBER Business Online Banking launch

9 Lending Technology JANUARY Solarity s low down payment home loan program launches APRIL Top local Home Loan Lender DECEMBER The Contender Solarity s home loan program offering enhanced features and more savings JUNE Domestic Wire Module and International Wires via Western Union online initialization Implemented Advanced Reporting for Credit Unions (ARCU) JULY State of the art network infrastructure upgrade with Virtualization and Disaster Recovery Replication AUGUST Data Warehouse and Business Intelligence (DWaBI) Installation OCTOBER Task automation process implementation (OpCon Job Scheduler) NOVEMBER Online Account Opening launch Installed deposit-taking ATMs at Terrace Heights and Toppenish branches DECEMBER Software upgrades and interface redesign complete for all ATMs

10 Solarity Credit Union is NOW OPEN at the corner of your living room and sofa.

11 The new online loan application and account opening process allows anyone that lives, works, worships or attends school in Washington State to apply online for a mortgage, credit card, vehicle loan, RV loan, or home equity loan or open an account. This technology enhancement is an example of Solarity s strategic approach of producing convenient solutions. The online application process gives new and current members the ability to open and fund accounts quickly and easily, 24/7, from the convenience of their home or office. It is also used in branch to expedite member services. The integration of new account opening and the loan application process into one convenient, easy-to-use platform is designed to provide an exceptional member experience in branch or wherever you happen to be. Solarity is proud to unveil this new online platform for online loan applications and account opening and invites you to go to solaritycu.org to apply today. $21,897 donated to kids at Yakima Valley Memorial Hospital Funds raised by Solarity Credit Union and Your Local Washington Credit Unions.

12 Solarity is proud to introduce our new Business Services Division. Solarity will understand the needs of our business members, anticipate their needs, and guide them through complex financial decisions better than any other financial provider. The Business Services team will facilitate account opening, consultations to help employees select the best services and products, and provide educational resources. For members with 10 or more employees, Business Member Services will arrange for all of this to be done at the place of business, to ensure a simple, easy and convenient service experience. Becoming a Business Services Member means surrounding yourself with specialists, whose goals

13 Empowering businesses with financial strength every day. are to ensure the success of your business. As a financial cooperative, when our members our successful, Solarity is successful. A dedicated team providing strategic knowledge and diverse backgrounds are assigned to our Business Service Members. This team includes our Business Services Relationship Manager, the Vice President of Business Services, and Chief Lending Officer. Our cooperative model allows for competitive rates, heightened anticipation and decision making, and the ability to find unique solutions to complex financial decisions. Business Services include: Commercial loans Commercial deposit accounts Separate business online banking platform Remote deposit capture Meet with a business services representative, call or (toll free), or visit our website at solaritycu.org.

14 Income Interest on Loans $16,339,679 $16,996,017 Investment Income 1,070,706 1,182,053 Fee Income 7,597,902 6,537,026 Rental Income 193, ,669 Miscellaneous 267, ,001 Total Income $25,469,699 $25,538,766 Expenses Compensation $8,095,740 $7,835,982 Travel and Conference 362, ,926 Office Occupancy 1,138,836 1,191,998 Office Operations 2,147,923 2,661,744 Marketing 485, ,771 Loan Servicing 1,960,841 2,413,766 Professional & Outside 2,199,146 2,132,334 Provision for Loan Losses 2,065,957 (76,378) Cost of Borrowed Money 132, ,482 Total Operating Expenses $18,589,047 $17,300,625 Non-Operating Income or Expense 902,229 (741,724) Dividends 1,320,247 1,272,040 Total Expenses 20,811,523 17,830,940 Net Income $4,658,176 $7,707,826 solaritycu.org As of Dec. 31 (unaudited)

15 Assets Loans $330,300,373 $379, 781, 010 Allowance for Loan Loss (2,447,913) (1, 658,155) Loans Held for Sale 118,772 2, 538, 250 Cash & Deposits 5,466,172 5, 473, 70 9 Investments 159,100, , 38 0, 632 Land-Building (Net of Depre) 14,771,893 14, 385,913 Furniture & Fixtures (Net of Depre) 1,633,624 2, 828,707 Other Assets 8,869,399 9, 38 4,178 Accounts Receivables 2,058,818 1,914, Total Assets $519,871,647 $552,028,853 Liabilities Accrued Liabilities $731,968 $3,103,4 89 Accounts Payable 7,207,662 6, 263,709 Borrowings 15,000, ,000,000 Total Liabilities $22,939,630 $39,367,198 Equity Membership Shares $166,241,066 $169,385,331 Share Checking 66,577,003 72,078,589 Certificates 99,658,337 94,293,899 IRAs 26,378,576 22,869,298 Money Market Accounts 67,020,113 75,043,218 Total Membership Equity $425,875,095 $433,670,335 Equity Acquired in Merger $20,445,000 $20,445,000 Regular Reserve 2,771,120 2,771,120 Unrealized Gain of Losses on AFS Sec 324, ,584 Retained Earnings 47,516,791 55,224,616 Total Reserve Equity $71,056,922 $78,991,320 Total Liability and Equity $519,871,647 $552,028,853

16 Visit solaritycu.org for branch locations, ATMs and hours. Contact Federally Insured by NCUA