2015 Annual Report The Journey Continues
Report of the Chair and CEO Dear valued members of University Credit Union, Welcome to University Credit Union! We are truly honored to be leading this great organization with a legacy of 65 years of providing solid financial services for all members. It has been quite a journey since 1961, and we are as excited now for the future of University Credit Union as we were back then. We encourage all members to take this journey with us and see firsthand how we continue to grow. We are committed to being relevant and we will be diligent in bringing value to all members. A Great Year! With the transformational changes we commenced back in 2014, we are continuing our work to bring our core values into everything we do. We are still committed to the people helping people philosophy upon which this credit union was founded. We strive for service and excellence at all times. We operate with the utmost integrity. We seek continuous improvements. We are accountable and committed to delivering them. We go that extra mile to help fulfill financial dreams for members who need a little assistance. We do all this while providing friendly service. Are we completely there? No, we still have a lot of work to do, and as it is with any transition, it takes some time. One thing is for sure though, every staff member is committed to doing their best to make this transformational change our embedded culture! In 2015, we remain strong and financially sound, and as a result, we have increased our share dividend rates. From the beginning of the year, we doubled share dividend and money market rates. Our certificate rates are a few of the highest in the marketplace. Also, we have removed many of the fees on services that you enjoy today, (e.g. foreign transaction fees on credit and debit cards, bill pay monthly service fee, lost/stolen card replacement fee, etc.) We are able to bring more, do more, and give more to our members and the communities we serve. One of the best methods of measuring the strength of a financial institution is Return on Assets (ROA), which represents the net income per total assets. We were able to achieve over 0.89% in ROA, which represents over $4,800,000 in net income. Another financial strength indicator is the net worth ratio, which represents the net worth per total assets. We stood at 8.9% of net worth at the end of 2015. Regulatory agencies deem financial institutions with 7.0% or greater in net worth ratio well-capitalized. We are very pleased to report that UCU financials are very strong and the future of UCU looks even brighter. Total assets grew to an all-time high of $542 million with $499 million in member shares and $49 million in members net worth. Totals loans were $223 million with extremely low delinquencies. Total loan production for the year was $60 million. All these numbers represent a thriving credit union and we are committed to doing even better. We continue to work hard to serve the communities around us. We sponsored many community organizations and events, (e.g. the UCLA Community Programs
Office, the UCLA Bruin Run/Walk, the Special Olympics Run/Walk, Shred Day, UCLA Mattel Children s Hospital Book and Toy Drive) and provided food and clothing for the homeless in November/December. We also awarded $7,000 in scholarships and started a small grant program to assist university organizations with their community projects. As financial literacy is of great importance to us, UCU provided more than 20 financial workshops in 2015, and we plan to provide more in 2016. Expectations Going Forward The theme we have chosen for 2016 is The Journey Continues... We are committed to providing value-driven products and services to all members and our journey continues. We have good things in store for you in 2016 and beyond. We have a new technology focus now and will be bringing a robust lending system. We will also be bringing high tech to our high touch branch service. We are currently working on upgrading all ATMs and developing new business/ commercial services. We hope you are as excited as we are about these services coming soon. The Board, Supervisory Committee, management and staff are committed to our direction and our journey. We will see growth, further strengthening our financial condition, to be able to give even better loan and dividend rates. Our vision to be the credit union of choice for all members of the educational communities will be carried out, and our mission to responsibly assist all members to achieve their financial dreams through INNOVATION, PASSION, and EMPATHY will be critical in identifying who we are. We hope that all members will continue to support us as we do our best to wow you every chance we get. Thank you for your support of University Credit Union. We are truly privileged to serve you, our members. Norma Iadevaia Norma Iadevaia Chair of the Board Paul Yang Paul Yang President/CEO
Volunteer Board of Directors Kathleen Kiser Norma Iadevaia Board Chair Jane Permaul Board Vice-Chair Elizabeth Yzquierdo Board Secretary/Treasurer Anita Cotter Lea Howe Edward McCloskey Brian Thomason Carol Zaima
Management Team Paul Yang President/CEO Rose Chaco Vice President, Risk Management Natalie Crosby Vice President, Member Services Ed Fox Vice President, Lending Steve Sercu Vice President, Technology Solutions Sara Stern Vice President, Marketing L to R top row: Carol Zaima, Albert Aubin, Edward McCloskey, Paul Yang, Anita Cotter. L to R bottom row: Lea Howe, Elizabeth Yzquierdo, Norma Iadevaia, Jane Permaul, Patricia Lowe. Not pictured: Kathleen Kiser, Dori MacDonald. Sandy VanOver Vice President, Administration
Supervisory Committee Report To protect our members financial safety, University Credit Union s volunteer Supervisory Committee audits the credit union s financials and operations. The Committee s specific duties are to: Review and ensure, through internal and external auditors that the proper internal controls of the credit union exist. Audit the books, financials and business operations of the credit union using an appointed independent auditor Albert Aubin Validate and verify the accounts of members against the credit unions records. Review the affairs of the Board of Directors, officers, and management for adherence to University Credit Union bylaws and policies, and all regulations provided by governmental agencies. Maintain the reputation of the credit union by thoroughly investigating any and all claims made to the credit union and acting on the findings. The Supervisory Committee meets with the internal auditors and external auditors throughout the year to monitor and evaluate internal controls and to ensure your assets are safeguarded. The Committee also monitors the performance of credit union employees and elected officials and the policies established by the Board of Directors to ensure their compliance. The Committee engages independent firms to perform the annual financials, information technology, 401K and other necessary audits. For 2015, the Supervisory Committee hired Crowe Horwath as its external auditor. Albert E. Aubin, Committee Chair Dori MacDonald, Committee Member Patricia Lowe, Committee Member Patricia Lowe Dori MacDonald To obtain a complete copy of the audited financial statements (including the audit opinion), contact: Supervisory Committee, 1500 S. Sepulveda Blvd., Los Angeles, CA 90025.
Mission, Vision & Core Values Mission Statement To responsibly assist all members to achieve their financial dreams through INNOVATION, PASSION and EMPATHY. Vision Statement To be the Credit Union of Choice for All Members of the Educational Communities. Core Values Credit Union Philosophy We embrace and are committed to the people helping people credit union philosophy, and we will practice it daily to all diverse members of the credit union. Service Excellence We strive to provide excellent service by doing it right the first time, following up incessantly, being courteous, always showing professionalism, and going the extra mile. Utmost Integrity We will conduct our business with the utmost integrity. Continuous Improvement We know efficiency will be a critical part of our operation. We are always looking for better ways for our processes and for making continuous improvements. Delivering on Accountability We acknowledge that we depend on each other for the credit union to be successful. We hold dearly how important accountability is. We promise to be accountable for what we are responsible. We take ownership and deliver for the ultimate success. Fulfill Financial Dreams We will do everything we can to bring financial dreams to reality for members. We will be advocates and supporters of each member whenever possible. Having Fun We strive to have fun in what we do. We are passionate about what we do and we show that through our actions. We are excited to help our members and we show it in our faces. Shred Day Million Pennies for a purpose Coats for homeless
Statements of Financial Condition * December 31, 2015 and 2014 ASSETS Cash and cash equivalents Investments Loans receivable, net of al-lowance for loan losses Property & equipment Accrued interest receivable Share insurance deposit Foreclosed and repossessed assets Prepaid expenses and other assets TOTAL ASSETS LIABILITIES AND EQUITY Members share and savings accounts Accounts payable and other liabilities TOTAL LIABILITIES Members equity Other comprehensive (loss) income TOTAL MEMBERS EQUITY TOTAL LIABILITIES AND MEMBERS EQUITY 2015 $48,162,938 240,930,883 229,021,668 9,258,539 996,426 4,424,593 9,998,152 $542,793,199 $499,520,490 2,272,754 501,793,244 49,890,347 (8,890,932) 40,999,955 $ 542,793,199 2014 $80,893,788 171,432,397 223,866,778 9,467,379 845,928 4,082,731 129,005 4,280,164 $494,998,170 $454,255,699 1,552,693 455,808,392 45,070,737 (5,880,959) 39,189,778 $ 494,998,170 *Unaudited
Statements of Income * For the years ended December 31, 2015 and 2014 INTEREST INCOME Loans Investments TOTAL INTEREST INCOME INTEREST EXPENSE Members share and savings accounts TOTAL INTEREST EXPENSE NET INTEREST INCOME PROVISION (CREDIT) FOR LOAN LOSSES NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES TOTAL NON-INTEREST INCOME NON-INTEREST EXPENSE General and administrative expenses Compensation and benefits Office operations Other expenses TOTAL NON-INTEREST EXPENSES NCUSIF and TCCUSE NET INCOME 2015 $9,509,333 2,700356 12,209,689 941,734 941,734 $11,267,955 (431,674) 11,699,629 4,323,675 6,490,215 781,495 3,931,984 11,203,694 0 $4,819,610 2014 $9,667,140 1,334,427 11,001,567 467,092 467,092 $10,534,475 (937,701) 11,472,176 2,975,740 7,342,890 950,396 3,617,026 11,910,312 0 $2,537,604
Financial Trends Special Olympics We Run the City Champions Feeding the homeless in Los Angeles
UCLA Staff I Heart Walk UCLA Student Food Pantry Donation
Main Branch 1500 S. Sepulveda Blvd. Los Angeles, CA 90025 /UniversityCU.LA @UniversityCreditUnion www.ucu.org @UCU_LA (800) UCU-4510 UCLA Campus Branch 308 Westwood Plaza, Los Angeles, CA 90095 A-Level Federally Insured by NCUA NMLS #409731 Designed by: Daniela Fuentes