Message from the President / CEO

Transcription

1 ANNUAL REPORT 216

2 Message from the President / CEO Altier Credit Union has come a long way since our humble beginnings in 1947, when eight employees of the Salt River Valley Water Users Association formed our financial cooperative. Since that time, we have grown to 18,66 members and $189,324,26 in assets. We operate five branch offices across the state of Arizona, with our administrative offices located in Tempe. Over the last 7 years our credit union has endured economic hardship and prosperity, and throughout those times we have continued to grow our service levels and product offerings. The future is upon us and we continue to implement new technologies to improve efficiencies and deliver greater convenience. Remote deposit activity displayed exceptional growth in 216. Through the Altier app, ATM deposits and desktop check scanners, members collectively made 2,4 mobile deposits in the month of December, equaling more than $1,,. This benchmark significantly exceeds the number of deposit items from any one of our five branch offices and sends a clear message that our members are embracing these quick and convenient delivery channels. Although it was a year for milestones it was also a year of challenges. Altier Credit Union strives to maintain a well-diversified loan portfolio including participation in loan activity with other credit unions. This common and viable industry practice of investing surplus funds into loan participations helped the credit union maintain strong revenues during the Great Recession. Surplus funds made it possible for Altier Credit Union to participate in selected commercial loan activity with credit unions on the east coast from mid-29 until February 214. Some of these loans had balloon maturities due last year and unfortunately, some have resulted in charge-offs and modifications. To offset, we have established higher reserves to account for these adversities, and expensed $1,895,9 into the Allowance for Loan and Lease Loss account to sufficiently reserve for these collateral challenged loans. As a result of this extraordinary impairment to the loans, we incurred an operating loss in 216 of -$824,59 or -.44%. At the end of 216, Altier Credit Union remains well-capitalized with a net worth ratio of 7.26%. We remain cautiously optimistic that challenges in this commercial loan portfolio have stabilized, but will continue our vigilant monitoring of the conditions and collateral associated with these loans. I want to personally thank you for giving us the opportunity to serve your financial needs throughout the year. We know you have many choices in the banking marketplace today, so your support, loyalty and membership with Altier Credit Union is truly appreciated. In Service to Members, David L. Skilton President/CEO Shaping a powerful financial future throughout the community, one member at a time.

3 Message from the Chief Operating Officer By the Numbers As part of an ongoing mission to improve the member experience, we accomplished some very key goals in 216. It has been an active and productive year, and I m excited to be part of such a dynamic team. We reached a milestone mid-summer when we opened our 5 th Kasasa checking account. In addition, we approved and funded a record number of consumer loans for our members, an increase of 25% over the previous year. To ensure that we are doing all we can to meet the mounting needs of those we serve, member satisfaction surveys were placed inside every branch, posted online and included in the quarterly newsletter. I m pleased to announce that once again, our members have voted us as the #2 credit union in Arizona. This distinction is solely based on quality of product, service and word of mouth referrals. Last June, Altier upgraded its Visa credit card portfolio to a more powerful platform and has since reduced minimum payment requirements and eliminated the fees for both balance transfers and cash advances. We are looking ahead to improve our credit card rewards program and to provide more flexible rate options to eligible card holders. Our branch in Page, Arizona underwent a facility and technology upgrade in 216. It is the first Altier branch to use imaging ATM machines in both the lobby and drive-through and the first to provide an interactive member kiosk for account opening and online banking resources. Similarly, the recent relocation of our St. Johns branch was largely focused on advancing technology, access and convenience. Members can now do all of their banking in town, and take advantage of a full service ATM available 24/7 for their deposits, withdrawals and account inquiries. More than half of the residents in Page and nearly 25% of those living in St. Johns are members of our credit union and we want to reaffirm our pledge to remain a vital part of those communities for many years to come. We continue to enhance products and services designed to add value to your Altier membership and look forward to being your primary financial institution of choice for 7 more years. Sherry Belcher Chief Operating Officer Credit union office, 3rd Avenue Annex, Photo courtesy of SRP Research Archives $81 Million in loans funded Ranked No. 2 among the top 1 credit unions in Arizona* *According to Ranking Arizona: The Best of Arizona Business Kasasa checking paid out $24, in dividends, cash rewards and ATM fee refunds to our members 23,198 mobile deposits made via smart phones and tablets for a total of $9,891,991.1 up 26% since 215 altiercu.org 1,482,392 Page views 15,745 Unique views 81,34 New visitors 87,773 Total mobile phone and tablet views 1947 Water Users Employees Federal Credit Union established Ralph Brooks elected as the first president 1955 Name changes to Salt River Project Federal Credit Union 1956 Total assets $1 million Credit union begins offering SRPFCU moves to Project Home Improvement loans Administration Building

4 $275 Collected to train service dogs rescued from local shelters and pair them with veterans living with PTSD $1525 Raised for the Children s Miracle Network and Phoenix Children s Hospital 21,373 Meals packed and provided to nonprofit food bank programs and services $2976 Donated to TCAA to help alleviate poverty, hunger and homelessness 149 New toys purchased for local underprivileged kids 4+ Holiday cards written and sent to our active military $7 Raised by Team Altier at the Phoenix Zoowalk for Autism Research In The Community Jim, an Air Force Veteran embraces Lilly, his newly trained service dog during graduation day at Soldier s Best Friend. Photo courtesy of Victory Fotos American Service Animal Society Autism/Asperger s Research Program at ASU Camp Rainbow Children s Miracle Network Feed My Starving Children NCC Community Food Bank Packages from Home Page Food Pantry Page High School Phoenix Children s Hospital Salvation Army Forgotten Angels Soldier s Best Friend SRP PERA Clubs; SRPGA St. Johns High School St. Mary s Food Bank Tempe Community Action Agency (TCAA) Altier Credit Union celebrates 7 years of service! Having concluded my first year as board chairman, it is gratifying to see the many ways that Altier serves the financial needs of its members. When I became a member, it was the Salt River Project Federal Credit Union. Although the branches consisted of just a few trailers, it felt welcoming and a place where families would come in together and old friends would reconnect it was our community. When I enter a branch today, I still get that same community feeling. While the names, logos and tag lines may have evolved, the legacy of service remains. The credit union continues its commitment and support to a number of organizations in reaching their financial goals through corporate donations, volunteer activities and sponsorships. Some of those that were supported in 216: Programs to aid veterans such as Soldier s Best Friend Local and regional food banks such as Page Food Pantry Organizations to help the homeless and hungry such as Tempe Community Action Agency Charities for underprivileged children such as Salvation Army Forgotten Angels Upon the retirement of Harry Mateer as CEO, we began the transition to a new leadership team through the promotion of David Skilton to CEO and the new appointment of Sherry Belcher as Chief Operating Officer. Looking ahead, the credit union remains keenly focused on enhancing member satisfaction, pursuing innovations to streamline day-to-day processes, and providing the kind of services to help shape your family s financial future. I would like to extend my appreciation to our loyal members who have supported us for decades as well as to those just joining the credit union family. In addition, I d like to thank the management and staff for their commitment to deliver best in class products and services to our members. Without these partnerships, Altier would not be here today. Finally, I want to thank the board of directors for their commitment to Altier. Your vision and leadership is shaping our credit union for years to come. Rose Pfister Board Chairman Chairman s Report (pictured left to right) BOARD OF DIRECTORS Back row: Brendan O Connor, Vice Chairman; Kathy Danielson, Director; Rose Pfister, Board Chairman; Nathan Erickson, Director; Front row: George Njock II, Director; Yvonne Reinink, Secretary/Treasurer; Joseph Nowaczyk, Director 1972 Page branch opens at the Navajo Generating Station 1977 First checking account introduced 1978 St. Johns branch opens at the Coronado Generating Station 198 Credit union moves to new facility on Project Drive adding a cash vault, safe deposit boxes, a night depository and two drive through teller lanes 1988 Total assets $5 million PowerLine introduced West Valley branch opens 1991 ServiceLine introduced

5 Financials* Financials* STATEMENT OF FINANCIAL CONDITION ASSETS DLQ Ratio STATEMENT OF INCOME INTEREST INCOME ROA Cash and cash equivalents $2,947,77 $12,448,97 Available-for-sale 4,736,658 6,321,59 Other investments 38,793,659 25,661,339 Loans to members, net of allowance for loan losses 126,84, ,495, Interest on loans to members $5,87,964 $5,68,17 Interest on investment securities and cash equivalents 548, ,512 Total interest income $6,356,518 $6,44, Premises and equipment, net 6,91,11 6,819,756 NCUSIF deposit 1,651,49 1,632,23 Other assets 7,48,63 2,58,8 Total Assets $189,324,26 $182,888,115 LIABILITIES Members share and savings accounts $173,456,27 $166,618, INTEREST EXPENSE Dividends on members share and savings accounts $31,431 $24,382 Interest expense on borrowings 45,426 2,937 Net interest income $6,,661 $5,783,3 Provision (Credit) for loan losses 1,895,9 596,791 Net interest income after provision (credit) for loan losses $4,15,652 $5,186, Other Liabilities 2,272,929 1,888,178 Total Liabilities $175,728,956 $168,56,22 MEMBERS EQUITY Regular reserve $9,415,23 $9,415,23 Undivided earnings 4,286,583 5,111,173 Accumulated other comprehensive loss ($16,536) ($144,31) Total Members Equity $13,595,7 $14,381,895 Total Liabilities and Members Equity $189,324,26 $182,888, Net Charge-off Ratio NON-INTEREST INCOME Total non-interest income $4,213,32 $3,842,991 NON-INTEREST EXPENSE Compensation and benefits $4,313,174 $4,276,35 Occupancy 57,44 464,327 Operations 4,259,984 3,856,966 Total Non-interest expense $9,143,562 $8,597,643 NET INCOME (LOSS) ($824,59) $431,858 Other comprehensive income (loss) 37, ,942 Comprehensive Income (Loss) ($786,825) $1,26, Net Worth/Total Assets Ratio *216 Comprehensive audited financial statements were prepared by Nearman, Maynard, Vallez, CPAs *215 Comprehensive audited financial statements were prepared by Moss Adams, LLC 1993 VISA Gold credit card rolled out 1995 Total assets $1 million First ATM installed at the West Valley branch 1998 Received state charter Changed name to SRP Credit Union 2 Tempe branch moves to new corporate facility on Project Drive New East Valley branch opened in Mesa

6 Treasurer s Report Supervisory Committee Report Hear What our Members are Saying Altier Credit Union ended 216 as a well-capitalized credit union with a net worth ratio of 7.26%. Low interest rates in today s financial operating environment continue to challenge management to search for creative solutions that will produce the highest return possible for its members, and for the credit union as a whole. The credit union manages the risk of its products carefully by avoiding high concentrations in any one product. In 216, Altier experienced solid growth in its loan portfolio of nearly 25% and loan quality remained strong as indicated by a consistently low delinquency ratio of 1.12%. As a result, the credit union was able to set aside funds for the required allowance account in preparation for any loan losses in the portfolio. However, this action resulted in a negative net income at the end of the year. Altier will continue its focus on improving productivity and operating efficiencies, while delivering value-added products, time-saving services and financial planning tools to help its members realize their financial goals. The board of directors, management and staff are committed to ensuring that the credit union remains financially sound now, and in the future. Yvonne Reinink Secretary/Treasurer The Altier Credit Union Supervisory Committee is a fivemember independent standing committee required by state law and the Altier Credit Union (ACU) Bylaws. Specifically, the committee oversees the internal audit and financial audit processes. The committee s main focus is on the internal control system designed to help prevent errors and fraud. The internal and external auditing processes provide information about the health of the ACU internal control system and make recommendations for improvement. The committee tracks all recommendations made by the internal auditors, external auditors and examiners to help assure that identified problems and internal control weaknesses are corrected. During 216, the committee renewed the internal audit services contract with Clifton Larson Allen (CLA) for an additional two years with an option for 219. The committee and Altier management are pleased with CLA s performance on these audits. In early November 216, the credit union s contracted financial auditor Moss Adams, LLP withdrew from the contract with Altier. Moss had concerns about some regional commercial loans on the Altier balance sheet with which the Moss auditors had no experience. After a brief search for a replacement audit firm, we contracted Nearman, Maynard, Vallez CPAs, ranked in the top five nationally for credit union auditors. As of mid-march, 217 Nearman had completed the financial audit for 216. The Supervisory Committee is in the process of awarding a contract for IT security assessment services. This will help ensure that Altier s IT practices are up to date and working well to protect credit union assets and member information. Randy Dietrich Chairman, Supervisory Committee Shelby Member since 24 I saw firsthand the great customer service and reliability shown to my father for over 2 years. When it was time for me to start saving, Altier was the only choice. Mary Member Since 1972 Never once has an error been made or any changes occurred that inconvenienced us. Thank you Altier for forty-five years of great service! Valerie Member since 212 I love the community feel... I get called Valerie, and I m asked about my day because they actually care and I ve never once had an issue with my account. Stan Member Since 199 You can apply for a loan at lower than normal rates and not get the hassle and run around like the larger banks give you. Israel Member since 211 Being an Altier member means that you get the BEST customer service in the state. This is why I will be an Altier member for the next 7 years! 21 Online Bill Pay launched 26 Changed name to Altier Credit Union serving all of Maricopa County 27 Online chat introduced 21 Online Banking, Text Banking, and Remote Deposit launched 213 Mobile banking app rolled out First Kasasa checking account opened 216 Total assets $189 million 5 th Kasasa checking account opened

7 MESA GATEWAY BRANCH 6846 E. Warner Road Mesa, AZ TEMPE BRANCH 1511 N. Project Drive Tempe, AZ WESTERN BRANCH 221 N. 79th Avenue Tolleson, AZ PAGE BRANCH 449 Haul Road Page, AZ 864 ST. JOHNS BRANCH 52 W. Cleveland Street St. Johns, AZ altiercu.org Proudly not a bank since 1947 More than 18,6 members strong Federally Insured by NCUA