2013 Annual Report
A customer is the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an interruption in our work. He is the purpose of it. He is not an outsider in our business. He is part of it. We are not doing him a favor by serving him. He is doing us a favor by giving us an opportunity to do so. ~ Mahatma Gandhi At SCE Federal Credit Union, it actually goes beyond this. We do not have customers, we have members. Every single person who has an account with us is an owner of the Credit Union. We make every effort to be laser-focused on providing the very best for our members. In addition to offering highly competitive rates, convenient products and services, and advanced, secure technology, we believe it all comes down to service. We can be superior in all other areas, but if we are not serving our members well and striving to provide Wow experiences for them, we would be missing the mark. Thank you for allowing us the privilege to be of service. modern technology with good old-fashioned service
report of the chairwoman & ceo As you will read from the information provided in this annual report, your Credit Union had another successful year financially. This, of course, is great news as we need to be financially profitable to stay in business. But maximizing our profits is not the principal metric SCE FCU uses to define success. As a member-owned, not-for-profit financial institution, we evaluate our profit needs every year by simply asking ourselves how much net income we need to generate a reasonable amount of reserves and to allow us the opportunity to research and implement more services to offer our member-owners. Our overriding definition of success is being there when our members need us, providing the best possible pricing for all our services, and by being active participants within our local communities. Even during the economic dark days we all experienced in the last few years, your Credit Union was not forced to close branches or lay off any employees. We believe, and many members have confirmed, the primary reason we survived the dark days is because we care about our member-owners. We care by being very proactive in trying to help when they re faced with financial challenges. Even though we did not engage in the sort of practices that eventually burst the mortgage bubble and helped send the country into a very deep recession, we reached out to our members and offered to modify their mortgage and other loans until they got back on their feet. But we must always combine offering the highest level of service to our members with being proactive and continually researching and implementing new products, utilizing emerging technologies to improve our deliverables and service profile. To that end, SCE FCU added a number of new products and improved existing ones all in an effort to make your financial experience as easy and stress-free as possible.
A sample of these new and improved services include: We developed and installed a state-of-the-art lending system that will allow members to apply online and get an instant response, as well as assist our member service staff in providing a much higher and quicker level of personal assistance to members. We vastly improved our direct deposit program. You can now deposit a check by simply taking a picture of it with your smartphone and sending it to us. That same technology was installed in most of our ATMs as well. We improved Snapshot, our personal financial management program. With Snapshot you can access all your accounts, even from other financial institutions, from any PC anywhere. Soon you will be able to access Snapshot from your smartphone. We now make buying your dream house easier. If you are looking to buy a house (or refinance your current loan), you can simply go to our website and complete an application in minutes. Even better, we have trained loan officers ready to assist you every step of the way. As you can see by this list, our commitment to our members is not just to add technology and reduce, or even eliminate, the personal contact as many banks are doing these days. Our commitment is to always be here with the highest level of technology AND to be just a visit to one of our branches or a phone call away. If you get everybody in the company involved in customer service, not only are they feeling the customer but they re also getting a feeling for what s not working. ~ Penny Handscomb Everyone from your Board of Directors to Senior Management staff and every employee is committed to serving our members. After all, without you we are not us. Mary Steudle Board Chairwoman Dennis Huber President & CEO
2013 was a financially successful year for the Credit Union. As mentioned, as a cooperative our goal is not to maximize income, but simply to generate enough income to pay for expenses, perform research, add the products and services you want, provide competitive rates for loans and investments, and retain sufficient reserves to sustain us through challenging economic times. Here are some of the financial highlights of 2013: SCE FCU ended 2013 with assets of $595 million We had a net income of $2.7 million We funded $102 million in loans for members SCE FCU ended with shares of $513 million, up from $498 million in 2012 Our federal regulators, the National Credit Union Administration, define a well-capitalized credit union as having at least 7% of its assets in reserve. SCE FCU finished the year at a very healthy 9.34%. Overall your Credit Union is financially strong and able to meet the financial needs of our member-owners for the foreseeable future. Warren Lehmann Financial Officer Patrick McCloskey Vice-Chairman Rebecca Allie Secretary financial report
loan Growth share Growth net worth Growth 2011 $292,475,222 2011 $425,649,029 2011 $46,196,527 2012 $319,432,124 2013 $318,827,592 2013 $513,071,984 2012 $497,955,016 2013 $55,602,983 2012 $52,900,953 Kenji Coleman Director Edward Orosz Director Robert Toohey Director
Other 2% Personal 7% Visa 9% Business 14% Vehicle 28% Real Estate 40% As of December 31, 2013 Unaudited 2013 2012 Total Income $30,117,603 $32,682,970 Expenses Personnel $13,132,315 $12,119,235 Office Operations & Occupancy $5,953,875 $6,278,445 Loan Servicing $1,741,232 $1,414,183 Professional/Outside Services $931,155 $866,776 Provision for Loan Losses $518,000 $2,666,000 Education/Promotion $440,877 $554,877 Non-Operating (income) Expenses $183,760 $(1,738,314) Other $1,360,268 $1,375,423 Total Expenses $24,261,482 $23,536,625 Total Interest Expense & Dividends $3,154,091 $3,995,413 Net Income $2,702,030 $5,150,932 distribution of loans income statement
As of December 31, 2013 Unaudited 2013 2012 Assets Loans, Net $311,184,825 $310,248,546 Investments $238,224,075 $226,266,509 Savings 22% IRAs & Certificates 35% Money Market 29% Fixed Assets $17,602,162 $18,171,662 Other Assets $28,180,275 $29,144,659 Total Assets $595,191,337 $583,831,376 Checking 14% Equity & Other Liabilities Shares & Certificates $513,071,984 $497,955,016 Reserve & Undivided Earnings $55,602,983 $52,900,953 Other Liabilities $26,516,370 $32,975,407 Total Equity & Liabilities $595,191,337 $583,831,376 statement of financial condition distribution of shares
The Supervisory Committee, a group of volunteers appointed by the Board of Directors, is primarily responsible for overseeing the overall safety and soundness of the Credit Union. The committee meets every other month with the Credit Union s internal audit team to monitor adherence to operating practices and procedures. In addition, the committee contracted with the independent accounting firm of Turner, Warren, Hwang & Conrad to audit the Credit Union s records for the twelve months ending March 31, 2013. Each year, our committee reaffirms our commitment to ensuring that our member-owned Credit Union is financially stable and maintains the highest standards possible. Once again, we are pleased to report the assets held by SCE FCU are safe and secure. Furthermore, our review concludes that SCE FCU is in compliance with federal regulations and standards provided by the National Credit Union Administration (NCUA). The Supervisory Committee congratulates SCE FCU volunteers, managers and members on another successful year. Sharon David Covarrubias Acosta-Grijalva Christopher Carter Member Member Member Patrick McCloskey Chairman
2013 was a year of progress for the Credit Union s community efforts. SCE FCU s nonprofit partner, the SCE FCU Foundation, devised a growth plan to achieve its vision of becoming a leading provider and advocate for financial education in Southern California and Southern Nevada. The first step in the plan was realized with a name change in August, when the Foundation became the Center for Financial Empowerment. With a new name and a renewed resolve, the nonprofit remains committed to the principles on which it was founded. By providing effective financial education for youth and families, combined with the beneficial financial services offered by SCE FCU, the Center helps people move toward financial stability. To this end, in 2013 we facilitated 120 financial literacy workshops, providing education to 3,483 high school youth and 624 adults on the basics of smart money management. The popular Mad City Money financial learning activity enabled us to collaborate with Azusa Pacific University s Service Learning program and the Think Together program at select high schools within Southern California s San Gabriel Valley. The Center awarded $16,000 in scholarships to 22 high school seniors and college students pursuing college or trade school education. We also distributed more than $15,000 in small grants and sponsorships to local partner charities and community organizations helping disadvantaged families and youth. Through the volunteering program, SCE FCU employees spent 823 hours serving at charitable causes and events within the Credit Union s branch communities. 2013 marks the tenth year that SCE FCU has provided financial education workshops within the community, reaching more than 20,000 individuals in all. It s because of the support of SCE FCU s Board of Directors and members that we celebrate this success, and we look forward to sharing many more! in the COMMUNITY
visa credit cards Consumer Lending A full array of loans, offering highly competitive rates, fair and flexible terms, no or low down payments, and a quick application process. Plus, there are no pre-payment penalties on any SCE FCU loan. Auto Loans New, Used, Refinances, Classic Cars Auto Equity Loans, which may provide a tax-deduction Recreational Loans New & Used RVs, Travel Trailers, 5th Wheels, Motorcycles, Boats, Personal Watercrafts & Off-Road Recreational Vehicles CU at the Wheel our complimentary auto buying concierge exclusively for SCE FCU members, saving time, money and the typical car buying frustration Personal Lines of Credit SCE FCU credit cards are loaded with great features no annual fee, low interest rates, generous credit limits and fair terms: Visa Platinum Rewards Credit Card, with no annual fee, and a Rewards program with points toward travel, gifts, brand-name merchandise, or even cash back Visa Platinum Rewards can be combined with our Debit Rewards program to pile up the points quickly Visa Platinum Credit Card, with no annual fee Zero-Liability Protection in the event of fraud Visa Picture Cards, customized with your favorite photo or choose from a selection of pre-designed options products & services real estate loans Whether members are purchasing a home, refinancing, or utilizing equity, we have programs for: First Mortgage Loans for purchase or refinance Second Homes, Vacation Homes, Rental Properties FHA Loans (in California) & First- Time Buyer Options Conforming or Jumbo, Fixed or Adjustable Rates, 10- to 30-Year Terms Fixed-Rate Home Equity Loans, Variable-Rate Lines of Credit & Split Second Loans Owner- and Non-Owner Occupied In California or Nevada
checking & savings Our deposit accounts feature competitive rates and many free options. Free Checking with no catch! Green Checking paying dividends with no minimum balance required and offering a Debit Rewards program Free overdraft from other SCE FCU accounts Free Visa Check Cards Savings & Money Market Accounts Holiday & Vacation Club Accounts Certificates, IRAs & Coverdell ESAs Health Savings Accounts Youth Accounts business banking Fair and affordable banking options for small- and medium-sized businesses: Free Business Checking, Commercial Checking, & Commercial Advantage Checking, which pays dividends Business Certificates Money Market Accounts Revolving Lines of Credit Business Term Loans Commercial Real Estate Loans SBA Loans Business Visa Credit & Debit Bill Payment Merchant Services Mobile Deposit convenient access We re always open somewhere! Deposit Anywhere deposit checks straight from your Android or iphone Nearly 30,000 Surcharge-Free ATMs, including at most 7-Eleven locations SCE FCU Branches in Southern California & Southern Nevada Shared Branches across the US FastLine Automated Teller 24/7 Contact Center, with fullservice 6 days a week and select service outside of regular hours Online Banking & Bill Payment Customized smartphone apps Snapshot, online personal financial manager
In tribute to our three outgoing Board members, with great thanks for their many years of dedicated service on behalf of the membership... Bob Toohey is our longest serving Board member, having been an SCE FCU volunteer for more than 30 years. During that time, he has served on several committees, held all table officer positions, and developed the Credit Union s internal audit program while serving as the Chairman of the Supervisory Committee for 18 years. In 1970, as Chairman of the Board, Bob was directly responsible for expanding Local 47 IBEW FCU to serve all SCE employees the basis for today s SCE FCU. He has been recognized within the credit union movement as a leader, earning several awards including the California Credit Union League s prestigious Volunteer of the Year Award. Becky Allie is our outgoing Secretary of the SCE FCU Board of Directors. During her 14-year tenure on the Board, she has participated as the Chair of the Education Committee and currently also serves as a Director for the Center for Financial Empowerment (the Center), the 501c3 founded by the Credit Union. We are thankful she will continue on as a Board member of the Center. Ed Orosz has been a Director of SCE FCU for 11 years, serving in a variety of capacities: Chairman, Vice Chair, and Treasurer of the Board; and Chair of the Board Governance, Compensation, and Credit Loan Committees. Ed has also been a member of the Budget, Education, Legislation, and Supervisory Committees. It has been both a privilege and an honor to have worked with these three fine individuals, as they faithfully fulfilled their duty to represent SCE FCU members at the executive level.
becky allie ed orosz bob toohey they will be missed
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