LEYDEN CREDIT UNION MARCH 22, 2017

Transcription

1 LEYDEN CREDIT UNION ANNUAL REPORT 2016 MARCH 22, 2017

2 M A N A G E M E N T David Lukas President / CEO Brian Peterson Operations Angie Ramos Lending Maureen O Neill Accounting B O A R D O F D I R E C TO R S Robert Hjelmgren Chairman of the Board Gene McCormack Vice Chairman / Treasurer Carole Konetzki Secretary George Duffey Valerie Ignoffo Gloria Murawska Dave Olson Marlene Ricchio Ann Marie Scurto Joseph Thomas, Jr. 2 2

3 CHAIRMAN S REPORT Robert Hgelmgren, far right, awarding a scholarship. LCU just completed its 5th straight year with a Net Income higher than the year prior. While this is a very positive trend, the total Net Income over that period doesn t fully make up for the net losses from The recession and subsequent recovery period has been a very difficult time for the credit union and its members. The ongoing recovery from the Great Recession has been one of the longest, yet weakest, in the history of our country. Consumers and businesses both have been reluctant to increase their spending, albeit for two different reasons. Consumers may have learned a lesson and have been trying to contain their spending and are actively trying to get out of debt. Businesses have been reluctant to invest in people and infrastructure due to uncertainty of costs from increased regulatory and tax burdens. Therefore, businesses are hoarding cash or using it to buy back their own stock to make their stock more valuable. With consumers and businesses reluctant to spend money, the Federal Reserve has had to take steps to boost the economy, which they ve done by keeping interest rates at historically low levels for a historic length of time. This has hurt the average person that isn t invested in the stock market but wants to save/make money in a safe way. Savings rates are at historical lows, yet we have more Shares now than we ve ever had. People want safety over potential gain. They re willing to take less in dividends so long as they know their money is safe. While we need members to save so that we have money to lend out, we also need members that want/need to borrow so that we can make the best use of our member deposits. Loan interest income is the lifeblood of LCU. Hopefully, the next few years will be more optimistic for businesses and consumers and we ll once again see smart spending and borrowing to stimulate the economy. Respectfully Submitted, ROB HJELMGREN Chairman of the Board 3

4 PRESIDENT S REPORT David Lukas, far right, with a scholarship winner and her parents. Better Banking it s not just a catch phrase. When we say Better Banking, we mean it. It s unfortunate that banking is a word and credit unioning isn t one. Even if credit unioning was a word, it s much too difficult to say. So we re stuck with banking, which makes you think of a bank, which we re not. We look like a bank. We offer most of the same products and services as most banks, but I would say that we most definitely don t act like a bank. We won t act against your best interest to accommodate our best interest. The reason for this is simple. Our Members/account holders ARE our best interest! We are owned by our Members. We want our Members to become better off financially, so that we in turn become better off financially. Because of this, you ll never see us opening accounts to fulfill quotas like an unnamed bank with a Stagecoach logo was caught doing. We ll recommend what we think is best for you based on what you are trying to accomplish. We may recommend that you refinance a loan with us or open a credit card and transfer a balance from another card because it s going to save you money. Our job is to look out for our members. Our Mission Statement is Working to Improve Our Members Financial Well-Being and it s something that we do from the moment a new member opens an account. During the account opening process we talk with our new member, discuss what they want to do with their account and make the recommendations that we think will best accomplish their goals. At the same time, we re continually looking for ways to save them money, make them money, or save them time. I truly believe that this is Better Banking. Respectfully Submitted, DAVID LUKAS President/CEO 4

5 MARKETING REPORT In 2016, LCU biggest marketing project was the completion of the new website. The site has a modern, new design and has been restructured to make navigation and searches much easier. Our next step with the web site is to use it to attract new members by improving our Search Engine Optimization (SEO). When local consumers are searching for financial products online, we want LCU to be at the top of the search list. The advantage to spending marketing dollars on SEO is that we want to be visible to consumers who are actively looking for a financial product. You can t get more targeted than that! LCU interviewed several SEO companies and we re happy to announce we will start working with one shortly. We re always testing promotions to see what causes members to react. In 2016, we learned that a 2% rate reduction is a catalyst. In May June, we ran a Reduce Your Rate by 2% car loan refinance and closed 38 loans for $840, In October, we ran a 2% Off Your Qualifying Rate offer on Personal Loans and loaned $260, over 25 loans. We typically do 6-8 Personal Loans in October. These promotions will be back for We ve also been promoting LCU by attending or sponsoring events, including the Park District of Franklin Park s Street Dance, the 5K Foundation Fun Run/Walk, and the Halloween Hoot. With Leyden Township, we ve sponsored the Trek to the R.E.C. Race and the New Year s Drop and Pop! We have also used our partnerships to get nonmembers in the building. We ve sold tickets for the Unity in Community Foundation s scholarship raffle and we were the only local credit union selling discounted Santa s Village Tickets. We also increase LCU s visibility by regularly attending the Chamber by O Hare networking events and President David Lukas continues to be an a columnist in the People & Places Newspaper. Respectfully Submitted, JULIO CUOMO Marketing Coordinator SUPERVISORY COMMITTEE REPORT The Supervisory Committee is responsible for examining the books, records, and accounts of LCU as well as establishing and maintaining internal controls that safeguard the assets. The Committee is also responsible for providing reasonable assurance that regulations, policies, and procedures that the credit union is governed under are properly followed. Lastly, the committee is responsible for providing an annual report on LCU s financial condition and results of operations. The committee works with Linda Petricca, the credit union s Internal Auditor, in performing their duties. If you have questions about your statements or accounts at LCU, please contact Linda at , ext We ve retained the independent accounting firm of Selden Fox to perform the annual audit of our statements. Findings are reported to the Board of s and the Credit Union Division of the IL Dept. of Financial & Professional Regulation (IDFPR). LCU is also periodically examined by regulatory agencies such as the IDFPR and the National Credit Union Administration. The annual audit performed by Selden Fox is conducted in accordance with generally accepted auditing standards. It was the opinion of Selden Fox that LCU s financial statements for the year ended Dec. 31, 2016 fairly represent the financial condition of LCU. Respectfully Submitted, DAVID OLSON Supervisory Chairperson Members: Joe Thomas Marlene Ricchio Gloria Murawska 5

6 CREDIT COMMITTEE REPORT After review, 2016 should be considered as having mixed results. To borrow a movie title, we could say that it was Good, Bad, and Ugly. There was most definitely some good. We brought back an old promotion that was very successful and used it in two different ways. The original was the 2% off your current rate Auto Refinance promo. The second was a 2% off your qualifying rate on a signature loan. Both promotions were very successful. We ended the year up with an increase in Auto Loan balances of nearly $530,000! The Personal Loan promotion brought in 25 loans and $260,000 in October alone. It was by far the best month for personal loans in both number and dollar amount for the entire year. The bad was that even with the successes that we had with the auto loans, overall loan balances dropped by over $600,000. The biggest concern here is that credit card balances dropped by over $60,000, when we had hopes that balances would increase due to the introduction of LCU Visa Platinum Credit Cards along with a rewards program. The ugly was discovered while reviewing loan denials in November. We had 20 loan denials in November alone. Of the 20 denials, 15 were from non-members. It s a positive that nonmembers are coming to us for financial services. But, it s a negative when the non-members are looking to us for debt-consolidation loans. Whille Debt Consolidation Loans can be difficult to underwrite for members that we have a history with, they re even more difficult when working with someone that you don t know at all. There is an opportunity there. We just have to be very careful with the risks that we re taking on. The ugly side of this is the trend of Bankruptcies following 12 to 24 months after Debt Consolidation Loans. It s as if the Debt Consolidation Loan is the member s last attempt to get their finances in order. When it doesn t work, they end up filing for Bankruptcy and we end up with a bad loan. We may need to consider finding a way to have more financial education in conjunction with the Debt Consolidation Loans. Without changed behavior, members will end up back in the same position they were in prior to the loan. If we can break that cycle through financial education, we can make sure the members have more than A Fistful of Dollars. Respectfully submitted, ANGELINA RAMOS Chairperson Members: Val Ignoffo Gene McCormack David Lukas Ann Marie Scurto SAVE MONEY-REFINANCE YOUR CAR LOAN Refinance at LCU and we will reduce your rate by 2%* APR EXAMPLE $20,000 Loan, 60 months remain Total Interest: at 5.9% APR = $3, at 3.9% APR = $2, SAVINGS $1, OFF Call or apply online at Subject to qualification. Restrictions apply. *Floor rate is 1.9% APR. Offer does not apply to existing LCU auto loans. Expires June 30, Promotion is valid only on loans of $10,000 or more for 36 months or more. Documentation of current loan must be presented. APR = Annual Percentage Rate. 6

7 2016 TREASURER S REPORT ASSETS Loans 1 $22,653,381 $23,178,411 Invested Funds $15,704,429 $13,300,316 Cash & Cash Equivalents $41,666,946 $40,694,825 Fixed Assets $2,404,761 $2,487,704 Other Assets $1,321,954 $1,110,524 TOTAL $83,751,471 $80,771,780 LIABILITIES Members Shares $76,784,178 $73,866,808 Accrued Expenses and $287,382 $278,566 Other Liabilities EQUITY Members Equity, Partially Restricted $6,679,911 $6,626,406 TOTAL $83,751,471 $80,771,780 DISTRIBUTION OF INCOME INCOME Interest on Loans $1,165,671 $1,182,643 Investment Income $588,487 $476,343 Other Income $399,486 $379,016 TOTAL $2,153,644 $2,038,002 DISTRIBUTION Expenses $1,874,195 $1,826,458 Dividends to Members $112,079 $90,607 Corporate Stabilization Expense $0 $0 TOTAL $1,986,274 $1,917,065 NET INCOME (LOSS) $167,370 $120,937 1 Loans, Net for Allowance for Loan Losses 7

8 LEYDEN CREDIT UNION 2701 N. 25th Avenue Franklin Park, IL Phone: Fax: