NAVIGATING LIFE S JOURNEY TOGETHER

Transcription

1 NAVIGATING LIFE S JOURNEY TOGETHER 2016 ANNUAL REPORT Federally insured by NCUA.

2 MESSAGE FROM THE CHAIRMAN 2016 was certainly a challenging year for our nation and for many of our communities particularly those dependent on the oil and gas industry. Increases in unemployment, downturns in job growth and uncertain forecasts about continued economic recovery led many Americans to tighten their household budgets and choose to be more diligent about making major purchases. Amidst these economic challenges, it was however a good year to be a credit union Member. Credit unions nationwide added new Members at more than three times the rate at which banks added new customers. Here at TDECU, we worked one-on-one with many Members to develop solutions and plans to help them address the financial challenges in their lives. The result of this dedication to our Members helped TDECU to end the year on a high note as we recorded increases in both assets and loan balances was also a good year to live in a community with a TDECU presence. I am proud to report that TDECU gave nearly $1 million back to the communities we serve. TDECU Employees and Members also pulled together to collect nearly 700 pairs of shoes for the Brazoria SPCA, over 200 furniture items for Brazoria County flood victims and nearly 2,500 pantry items for local food banks. We also collected more than 3,000 donations of school supplies and hundreds of items for our December Goodwill supply drive. And, our generosity didn t stop there. Our Employees dedicated more than 2,600 volunteer hours to charitable causes in Among many other volunteerism efforts, our Employees and Members dedicated their time to the Susan G. Komen Race for the Cure, MS 150, National Day of Service, Boys and Girls Clubs and Habitat for Humanity. At TDECU, this approach reflects our core purpose of improving the lives of our Members, Employees and our Communities. Looking ahead, I am even more excited about what we will accomplish together in There are truly bright spots on the horizon for many of our communities; forecasts for economic growth are strengthening, the U.S. dollar continues to gain strength and employment rates have been on the upswing. To better guide the credit union into 2017 and beyond, your Board of Directors has recently worked to formally state the Vision and Mission of TDECU. To arrive at an updated Vision and Mission for the credit union, we started by looking deeply into TDECU s history and we reacquainted ourselves with what makes us special to our Members. We asked employees what motivates them about serving Members and we projected ahead to what will keep us successful as technology and trends change across the nation in financial services. Here are the updated statements that will guide our direction, strategy and plans for 2017 and beyond: TDECU Vision: Better tomorrows for all the lives we touch. TDECU Mission: We provide financial solutions to navigate the journey of life. One of the many ways that our Vision and Mission will be visible to you in the coming year will be through our continued work to make it easier for you to do business with TDECU. We look forward to developing even more opportunities to experience the credit union through online and mobile banking access with additional self-service features. We are also working to streamline all types of interactions between you and TDECU and we ll provide you more convenient and satisfying service and additional products and services all with the goal of deepening the relationship that TDECU has with you, our Member. We re glad you allowed us to be with you in You re part of a growing family of over 250,000 Members that reside in all 50 states and in more than 40 countries around the globe. We look forward to an even better year ahead and we will continue to be guided by TDECU s Vision and Mission to bring a successful 2017 to our Members, Employees and Communities. I thank you for the opportunity to serve as your Chairman, and look forward to the continued success of TDECU in the coming year. Richard Smith Chairman, TDECU Board of Directors

3 YOUR CREDIT UNION IN ,000+ Members $2.97+ Billion in Assets $1.5+ Billion in New Loans $352+ Million in New Mortgage Loans $37.3+ Million Saved with Better Rates and Lower Fees $651,000+ Saved at Buc-ee s with a TDECU Credit Card $6.79 Million in Student Loans 4.2 Million Cleared Checks 39+ Million Debit Card Transactions 3.3+ Million ATM Transactions 2.6+ Million Online Banking Transactions 1.2+ Million Calls Answered by Member Care 24,000 New Checking Accounts 6,513 TDECU Insurance Policies 3,031 Members Served by TDECU Wealth Advisors 753 Employees $982,000 Donated to Community Organizations $15,000 in Livestock Purchased at Auction from Local 4-H Programs $58,000 Awarded in Scholarships 109,000+ Visitors at Fun on the Farm at the Houston Livestock Show & Rodeo 3,000+ School Supply Donations 1,200 Miles for the BP MS150 2,486+ Food Drive Donations 2,626+ Volunteer Hours in Local Communities 646 Hours of Financial Literacy Classes for Youth 60 Financial Education Events 203 Furniture Items Donated for Flood Relief 695 Shoes Donated to the SPCA

4 MESSAGE FROM THE PRESIDENT TDECU Members exemplify all that is great about Texas: hardworking, independent and honorable. As Texans, we understand the ups and downs of the economy in 2016, as we ve experienced these ups and downs in the past. We re here for our Members during these tough economic times, and we helped many individuals get through unexpected financial challenges over the past year. Helping our friends and neighbors during tough times one way we live our core purpose at TDECU To improve the lives of our Members, Employees and Communities. TDECU employees worked hard last year to create a better overall Member experience for you. Our focus on making it easier to do business with TDECU is increasingly reflected by the growing number of Members who use TDECU s online and mobile banking services and by our Member Satisfaction score which improved to 91%. By combining convenient, technology-based service delivery with an increased emphasis on personal service, we will continue to work toward achieving the right balance across all of the ways that our Members choose to get service from TDECU. While many Members faced tough times in 2016, TDECU continued to help Members as we ve done for over 60 years. It s a simple approach, but it s an outlook that has allowed us to deepen our relationships with long-time Members while growing to add new Members for more than six decades. As we look forward to 2017, our focus will continue to be on you, our valued Member. You ll benefit from our updated, user-friendly website now available at TDECU.org, as well as more enhancements to both online and mobile banking. We also have new products coming in 2017; keep watching for new opportunities to earn more and save more at TDECU. In fact, TDECU welcomed over 33,000 new Members in 2016, ending the year with over 252,000 total Members and over $2.9 billion in total assets. Along with these new Members discovering TDECU, we were proudly recognized as Best of the Best in our Gulf Coast and Crossroads regions, and as the number one credit union in Houston by the Houston Business Journal. Our team of employees helped Members in many ways in For example, our mortgage team helped 2,200 Members build their future with over $350 million in home loans, and our total TDECU team put close to 24,000 Members on the road with over $700 million in auto loans. In addition, we are dedicated to protecting your financial future. TDECU Insurance Agency, LLC wrote over 2,500 new policies, and TDECU Wealth Advisors assisted more than 3,000 new clients to develop their financial plans and strategies. TDECU is Your Credit Union, and I would like to thank each and every Member, our TDECU Board of Directors, and our loyal, dedicated employees for your continued commitment to our vision of Better tomorrows for all the lives we touch. We look forward to making this vision your reality. Stephanie Sherrodd President and Chief Executive Officer

5 TDECU PROUDLY SUPPORTED THE FOLLOWING ORGANIZATIONS IN 2016 American Heart Association Greater Houston Builder s Association Rotary Clubs Association for the Advancement of Mexican Americans (AAMA) Greater Houston Hispanic Chamber of Commerce Run for the Rose Greater Houston Partnership Salvation Army Greater Houston Women s Chamber of Commerce Sugar Land Skeeters Houston Hispanic Forum Susan G. Komen Foundation Race for the Cure Autism Speaks Boys and Girls Clubs Brazoria County Dream Center Brazoria County SPCA Brazosport College Foundation Chambers of Commerce in all markets CHI Health Foundation City of Houston Flood Recovery and BTS Fest Economic Development Alliance of Brazoria County Forgotten Angels Foundation Fort Bend Hispanic Heritage Forum Greater Fort Bend Economic Development Corp. Greater Houston Black Chamber of Commerce Houston Livestock Show & Rodeo Teacher Appreciation Days in all markets Houston Texans Foundation Texas Black Expo Junior Achievement True to Life Ministries Kidz Harbor Turkey Fest Knights of Columbus United Way Lemonade Day University of Houston Livestock Shows & Rodeos in all markets University of Houston Alumni Association Meals on Wheels University of Houston Downtown Project Graduation University of Houston Victoria Rice Fest YMCA Robert Garner Firefighters Foundation

6 BOARD OF DIRECTORS Richard Smith Chairman (term ends March 2018) Roland Hendricks Treasurer (term ends March 2018) Peggy Miltenberger Director (term ends March 2019) David Sikora Advisory Board Director (term ends October 2017) Daniel Buche Vice Chairman (term ends March 2017) Eileen Campbell Director (term ends March 2019) David Ozuna Director (term ends March 2017) Edward Speed Director (term ends March 2019) George Hornback, Jr. Secretary (term ends March 2018) Frank Coe Director (term ends March 2018) Anita Sehgal Advisory Board Director (term ends October 2017) Ed Zingleman Director (term ends March 2017) OFFICERS Stephanie Sherrodd President & Chief Executive Officer Tim Bennett Vice President, Chief Brand Officer Courtland Crouchet Senior Vice President, Chief Retail Officer Isaac Johnson, IV Senior Vice President, Chief Risk Officer Rhonda Pavlicek Senior Vice President, Chief Financial Officer Chuck Smith Senior Vice President, Chief Lending Officer Steve Stevens Senior Vice President, Retail Lending Andrew Wayman Vice President, Digital Strategy

7 TDECU YOUR CREDIT UNION Founded in 1955, TDECU is the fourth largest credit union in Texas and the largest in Houston. We offer all types of financial products including banking, investments, insurance and mortgage lending. With more than 252,000 Members and more than $2.97 billion in assets, we are committed to providing the highest quality service and financial products to our Members. TDECU currently provides convenient access online, by phone and through our 43 service locations, including 36 Member Centers and a complete selection of convenient, innovative, and competitive products and services. Our values have held strong for 62 years, and we strive to continue our Founders legacy as we continue on this journey to Improving Lives in the future. Vision: Better tomorrows for all the lives we touch. Mission: We provide financial solutions to navigate the journey of life. Core Purpose: To improve the lives of our Members, Employees and Communities.

8 TREASURER S REPORT 2016 will be remembered as an important, yet challenging year in TDECU s proud history of delivering financial strength, safety, security and service to our Members. Once again in 2016, our continued commitment to innovation and improvements to our Member experience contributed to a successful year for TDECU. Assets increased over $195 million to reach over $2.9 billion and our total capital grew to an impressive $235 million. While the credit union continues to grow, many of our friends and neighbors experienced financial hardships last year, due to the Texas economy. As a result, TDECU recorded $38.9 million in the allowance for loan loss last year, resulting in net income of $2.55 million. We are proud to continue to offer you competitive returns on your deposits. In 2016, TDECU s Members benefited by receiving over $12.2 million in dividends and brought over $105 million in additional deposits to the credit union. I am also pleased to report we grew TDECU s membership by more than 13.6% at year end, taking us from 222,118 Members in 2015 to 252,362 Members in TDECU also provided cost-effective lending solutions to help our Members reach their personal financial goals. In 2016, we funded $1.5 billion in loans that helped fulfill dreams of homeownership, meet the needs of growing businesses, help Members purchase vehicles and provide affordable solutions for consolidating debt. We also saw tremendous growth in our student lending program making $6.79 million in student loans. We are proud of what TDECU is able to do to improve the lives of our Members. As we look toward another successful year in 2017, I would like to say thank you for allowing me the privilege to serve our membership and the needs of TDECU. On behalf of the Board of Directors, I want to assure you we will continue to monitor the credit union s financials with your best interests in mind. Roland Hendricks Treasurer, TDECU Board of Directors

9 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (AUDITED) As of December 31, 2016 CONSOLIDATED STATEMENTS OF INCOME (AUDITED) For the year ending December 31, 2016 EARNING ASSETS Total Loans, net of allowance Total Investments Total Earning Assets INTEREST INCOME Loans to Members Investments and Cash Equivalents Total Interest Income OTHER ASSETS Land, Premises & Equipment Accounts Receivable National Credit Union Share Insurance Fund Deposit Miscellaneous Other Assets Total Other Assets 2,726,401, ,622,916 2,859,024,869 49,039,698 10,378,209 22,292,994 27,857, ,568,450 INTEREST EXPENSE Shares & Deposits Borrowed Funds Total Interest Expense 124,979, , ,493,230 12,163,620 3,942,180 16,105,800 TOTAL ASSETS $2,968,593,319 Net Interest Income Provision for Loan Losses Net Interest Income After Provision for Loan Losses LIABILITIES Total Shares & Deposits Other Liabilities Borrowings 2,341,060,079 62,057, ,299,489 NON-INTEREST INCOME Fee Income Other Income Total Non-Interest Income 46,447,795 14,686,519 61,134,314 NON-INTEREST EXPENSE Operating Expenses Non-Operating Income Total Non-Interest Expense 129,076,054 (4,729) 129,080,783 EQUITY Retained Earnings (Capital/Member Equity) TOTAL LIABILITIES AND EQUITY 235,175,952 $2,968,593,319 *Detailed audited Financial Statement with Report of Independent Auditors for the fiscal year ended December 31, 2016, and monthly interim audited Financial Statements are available for Members at each TDECU Member Center. NET INCOME 109,387,430 38,890,546 70,496,884 $2,550,415

10 AUDIT COMMITTEE REPORT The Audit Committee of TDECU acts as your independent representative to ensure the financial condition of the credit union is safe and sound. The Audit Committee is an extension of the Board of Directors and has oversight responsibilities for the financial reporting control process, the system of internal controls, the audit process, monitoring compliance with laws and regulations, and monitoring the compliance of operating policies and procedures for TDECU and Subsidiaries. Throughout the year, internal audits, external audits and regulatory examinations are performed to carry out these responsibilities in an efficient and prudent manner. The Texas Finance Code requires an annual audit of the financial records of the credit union. To accomplish this in 2016, the Audit Committee engaged the services of Doeren Mayhew, one of the top accounting firms serving credit unions in the United States, to audit the financial statements. Doeren Mayhew rendered an unmodified opinion on the consolidated financial statements of TDECU and Subsidiaries for the year ended December 31, In 2016, TDECU did not have any bylaw changes to record. The Board of Directors meeting fee was $750 per Board of Directors meeting and $375 per committee meeting. As TDECU grows, the Audit Committee reviews and edits the audit plan to ensure that new and emerging risks are reviewed and mitigated. On behalf of the Audit Committee, I would like to thank our TDECU team and volunteers for their dedication to Improving Lives. Roland Hendricks Audit Committee Chairman, TDECU Board of Directors

11 THE GROWTH OF TDECU OVER 5 YEARS ASSETS LOANS $1,984,102, $1,728,901, $2,165,845, $1,922,650, $2,403,226, $2,182,605, $2,773,770, $2,520,159, $2,968,593, $2,759,645, DEPOSITS MEMBERS $1,632,984, , $1,823,228, , $2,053,394, , $2,236,943, , $2,341,060, ,

12 TDECU.org