Serving you & your community ANNUAL MEETING REPORT
CHAIRMAN S LETTER ON BEHALF OF YOUR Board of Directors, it is with great pleasure that I announce that was a successful year for Sco Credit Union. The credit union paid out $6.1 million in dividends to members in. We were able to share our success by paying ac ve members a 3.0% Bonus Dividend on shares as well as a 3.0% loan interest rebate to our borrowers. The bonus dividend and loan interest rebate, which totaled nearly $1.5 million, are examples of the value of membership with Sco Credit Union. We were again successful in with con nued growth in Sco Credit Union membership. With our network of branches and ATMs, as well as our online and mobile offerings, we were able to provide convenient products and services to area residents. We again experienced growth in deposits and steady loan volume thanks to the compe ve rates we offer. The commitment of the Board of Directors, management and staff of Sco Credit Union con nues to be focused on the fiscal interest of the credit union, the needs of our members, and the welfare of our community. It is our duty and obliga on to support the communi es in which we live and work. Because of our success in, we were also able to give more support to the communi es. We contributed $430,000 to a variety of fundraising efforts, community events, and civic organiza ons, including ac vi es at Sco Air Force Base. Our employees volunteered more than 2,100 hours in the community this past year. We are extremely proud of the volunteer efforts of our staff in. The charitable efforts we supported in included the American Cancer Society, American Diabetes Associa on, American Heart Associa on, March of Dimes, Na onal MS Society, Salva on Army and Special Olympics. We also donated over $28,000 to the United Way from the proceeds of the 10th annual Sco Credit Union golf tournament. Addi onally, some of our larger civic partnerships included the Edwardsville YMCA, Gateway Region YMCA, Highland Area Community Founda on, Illinois Center for Au sm, Jackie Joyner-Kersee Founda on, Military Night at the St. Louis Blues Game, Na onal Shrine of Our Lady of the Snows, Sco Air Force Base Family Picnic, St. Elizabeth s Hospital, and St. Joseph s Hospital in Highland. I am also pleased to tell you that our employees and members once again supported many addi onal local chari es and organiza ons. During the year, they raised money and donated items for the American Diabetes Associa on, Illinois Center for Au sm, Gateway Region YMCA Backpack A ack and United Way. Employees of SCU also provided financial educa on to more than 1,800 students from 12 area schools and youth organiza ons during the last school year. We sponsored 18 CU4Reality Financial Educa on Fairs to teach students important money management and budge ng skills. I am proud of Sco Credit Union and look forward to a future of sustained success and service to our members. On behalf of the Board of Directors, management and staff, thank you for your con nued support. William P. Hoste er, CMSGT (USAF Ret) Chairman, Board of Directors
PRESIDENT S LETTER Focus on members drives credit union s success in WE ARE DRIVEN EVERY DAY to be successful. That is because we truly are focused on doing the right thing for our members by providing the best value. In a world that typically does li le to take care of consumers, we are happy to provide you with an alterna ve that is trying to help you save money. Because of our not-for-profit coopera ve structure, we are able to offer you lower rates when you borrow money, be er rates on your savings, lower fees, and even the recent bonus dividend and loan interest rebate. We gave nearly $1.5 million back to our ac ve members through a 3.00% Bonus Dividend and a 3.00% Loan Interest Rebate late last year. We simply put that money back into members accounts. It was the 25th consecu ve year for a bonus dividend and the 10th year we were able to give a loan interest rebate back to you our members. Over the past eight years, Sco Credit Union has given bonus dividends and loan interest rebates back to members totaling over $9.2 million. The bonus dividend and loan interest rebate are examples of the value of your membership, confirming that choosing Sco Credit Union is a good decision. We are very pleased to announce that the Credit Union is financially strong and con nues to see growth in membership and deposits, as well as steady loan volume. Credit unions like SCU exist to serve their members, including working families, small businesses, and the local community. SCU has contributed approximately $2.2 million and its employees have volunteered 17,000 hours to a variety of local civic efforts throughout the region in the past eight years. I also would like to share some addi onal financials from. We finished the year with capital at $97.1 million, which is 8.89% of assets. Sco Credit Union remains above the 7.00% regulatory standard that is considered well capitalized. Our net earnings for were $8.5 million. Our assets at the end of were at $1.09 billion. Membership in increased 2.64% from 2015 to 135,282 members. We are looking to con nue our success in 2017 because of our conserva ve management and strong financial posi on. Throughout, we also focused on being the highest quality and most convenient financial ins tu on in the markets we serve. Our success would not be possible without our members. Our con nued success is also made possible by the commitment of our Board of Directors and our staff, which remains dedicated to providing excep onal service. We were also excited in to roll out a new tool in our branches called Savings Detector. This tool gives us the ability to see if we can save you money on an auto loan or credit card balance with another financial ins tu on. We can determine how much money we can save you over the life of that loan or credit card balance. In, we saved members over $565,000 simply by refinancing an auto loan or credit card balance to SCU. We will con nue to provide members with as much value as possible. That means that each and every day we will be guided by our members best interest. We look forward to a successful 2017! Thank you, Frank M. Padak President & CEO
FIVE YEAR PERFORMANCE 1100 1000 900 800 700 600 500 400 300 200 100 0 2012 ASSETS (in millions of dollars) 2013 2014 2015 100 90 80 70 60 50 40 30 20 10 0 2012 EQUITY (in millions of dollars) 2013 2014 2015 900 800 700 600 500 400 300 NET LOANS (in millions of dollars) 1000 900 800 700 600 500 400 300 SHARES (in millions of dollars) 200 200 100 100 0 2012 2013 2014 2015 0 2012 2013 2014 2015 2015 2014 2013 2012 Total Assets $1,092,616,184 $1,039,805,974 $1,040,110,871 $928,998,458 $887,748,102 Total Shares $980,299,415 $940,355,090 $889,903,753 $824,422,403 $788,471,081 Total Members 135,282 131,800 126,379 114,169 105,112 Dividends Paid $6,194,700 $6,741,502 $6,096,387 $6,305,898 $7,222,999 Loans, Net $841,622,892 $820,647,329 $858,027,880 $773,623,211 $720,375,942 Number of Loans Granted Amount of Loans Granted 22,806 22,236 29,816 23,922 22,801 $463,618,299 $423,183,002 $538,523,821 $429,135,853 $439,549,131 Number of Loans 80,760 80,236 81,458 75,254 66,698 Gross Income $57,403,807 $52,826,314 $52,115,152 $48,954,570 $49,523,009 Net Interest Margin $17,886,628 $17,930,535 $18,834,433 $22,744,490 $22,455,302 Net Income $8,489,065 $4,635,962 $(10,318,378) $8,131,164 $9,815,428
BALANCE SHEET (Dollars in thousands) ASSETS 2015 Cash & cash equivalents $ 17,139 $ 16,790 Investments Held-to-maturity 1,302 206 Other 168,558 146,318 Federal Home Loan Bank (FHLB) stock 1,368 1,368 Loans held-for-sale 1,946 2,221 Loans receivable, net allowance for loan losses 841,623 820,647 Accrued interest receivable 2,209 2,100 Premises and equipment, net 28,852 30,655 Na onal Credit Union Share Insurance Fund deposit 9,290 9,014 Assets acquired in liquida on - 59 Other Assets 20,329 10,429 TOTAL ASSETS $ 1,092,616 $ 1,039,807 LIABILITIES & MEMBERS EQUITY 2015 Liabili es Accrued expenses & other liabili es $ 14,824 $ 10,432 Interest payable 365 381 Total liabili es 15,189 10,813 Members Equity Share & savings accounts 980,299 940,355 Regular reserve 14,229 14,229 Undivided earnings 82,899 74,410 Total members equity 1,077,427 1,028,994 TOTAL LIABILITIES & MEMBERS EQUITY $ 1,092,616 $ 1,039,807 Other Income 38.98% Sources of Income Loans 59.00% Investments 2.02%
INCOME STATEMENT (Dollars in thousands) 2015 Interest Income Interest on loans receivable $ 33,867 $ 35,933 Interest on investments 1,163 436 Interest income 35,030 36,369 Interest Expense Dividends on members share & savings accounts 6,195 6,741 Interest on borrowed funds 154 79 Interest expense 6,349 6,820 Net Interest Income 28,681 29,549 Provision for Loan Losses 10,795 11,618 Net Interest Income A er Provision for Loan Losses 17,886 17,931 Non-Interest Income Fees and service charges 8,614 8,600 Other non-interest income 8,023 7,537 Recovery due to loan defalca on 5,737 320 Non-interest income 22,374 16,457 40,260 34,388 Non-Interest Expense Compensa on and employee benefits 15,481 14,028 Opera ons 9,204 8,410 Occupancy 2,565 2,527 Loan servicing 2,407 2,397 Educa on and promo on 1,404 1,348 Professional and outside services 680 1,024 Loss on disposi on of assets acquired in liquida on, net 30 18 Non-interest expense 31,771 29,752 NET INCOME $ 8,489 $ 4,636 14.79% Distribu on of Income 11.06% 74.15%
LEADERSHIP BOARD OF DIRECTORS William P. Hoste er, CMSGT (USAF Ret) Chairman Donald E. Pierre, SMSgt (USAF Ret) Vice Chairman Roselyn M. Altman Secretary Frank M. Padak Treasurer Carolyn L. Choate Dale J. Huegen Sheila M. Vallowe ASSOCIATE DIRECTORS Judith A. Beussink Michele R. Gehlbach Lawrence J. Haffner Sarah E. Kopatz Christopher Sobrino Mark H. Witkowski SENIOR MANAGEMENT Frank M. Padak President & Chief Execu ve Officer Christopher J. Browner Chief Financial Officer Steven P. Stryker Chief Opera ng Officer Marna J. Asbury Mortgage Lending Chris A. Davis Commercial Lending & Business Services Deanna M. O Neill Employee Services David J. Roth Account Services Sco A. Seidl Execu ve Vice President Adam J. Koishor Chief Marke ng Officer Brian M. Waldron Chief Lending Officer Dale L. Beard Risk Management Linda L. Hickman Consumer Lending Sco B. Peters Finance Alan W. Simpson Network Systems EMERITUS DIRECTOR Be y L. Renth Mission Statement: Banking Simplified LOCATIONS Home Office 101 Credit Union Way Edwardsville, IL 62025 Caseyville 2134 S. Morrison Avenue Caseyville, IL 62232 Collinsville 1100 Belt Line Road Collinsville, IL 62234 East Belleville 648 Carlyle Avenue Belleville, IL 62221 Edwardsville 1067 S. State Route 157 Edwardsville, IL 62025 Fairview Heights 555 Lincoln Highway Fairview Heights, IL 62208 Highland 12455 State Route 143 Highland, IL 62249 Mascoutah 1248 W. Main Street Mascoutah, IL 62258 Millstadt 548 E. Washington, Suite 2 Millstadt, IL 62260 O Fallon 712 W. Highway 50 O Fallon, IL 62269 Sco AFB 302 W. Winters Street Sco AFB, IL 62225 Troy 501 Edwardsville Road Troy, IL 62294 Waterloo 1019 N. Illinois Street Waterloo, IL 62298 West Belleville 4807 W. Main Street Belleville, IL 62226 Wood River 570 Wesley Drive Wood River, IL 62095
www.scu.org Member Service Center: (618) 345-1000 or (800) 888-4SCU (4728) Sco Credit Union is an Equal Opportunity Employer.