2016 Annual Report
Wherever life takes you. 00
Chairman s Message 3 President/CEO Message 5 Mission & Values 6 Supervisory Committee Report 9 Financials 10 Giving Back 12
Board of Directors J Thomas H. Denney Chairman Edward H. Happy Higgins Vice-Chair Nellynn Henson Secretary Larry Carter Treasurer James Embry Director Owen R. Schroeder, Jr. Director David Jones Director Cleveland Mario Richardson Director Ricky Hackwell Director 2
Chairman s Message Once again, it is my privilege to provide an update on your Credit Union. 2016 has been a year of transition for us and now, more than ever, we are thankful for our Members loyalty. We remain an elite Credit Union amongst our peers, having reached over $500 million in assets and passed the 50,000 member mark in 2016. We continue to grow in both attributes, which provide good indicators of the vision and direction of our organization. As you are all well aware, we went through a name change and rebranding in 2016. The task to do so was monumental in scope and required serious effort and attention from our board, our staff, and you, our members. We are happy to report that the results of all these efforts have been very positive and has helped to raise our profile in the community and create a springboard for greater opportunity. While rebranding the Credit Union was a major undertaking, our management team is not slowing down anytime soon. The Board has given approval to many large scale projects that should provide a better online, in-branch, and telephone experience for all of our members. We ve also provided guidance and support for other important initiatives that will increase our operational efficiency and provide a higher level of service to our members. I ve said before that it s important not just to survive, but we want to see the Credit Union thrive and grow across an array of metrics. We are looking at every opportunity to grow the Credit Union while maintaining our original commitments to the Clarksville and Hopkinsville communities. We are also very focused on maintaining our presence and support for the active-duty and retired servicemen and women affiliated with Fort Campbell. Changing our name does not change or diminish our focus and commitment to Fort Campbell, and we continue to look for ways to support individual members and the Fort Campbell community at large. The bottom line for this volunteer Board of Directors is that our sole mission is to do everything we can to ensure the long-term survival and success of your Credit Union. We continue to make decisions that will impact our children and their children, and we are always mindful of that legacy. The Board s mission is simple; make this Credit Union the best it can be for all our members. On behalf of the Board of Directors, the management team, and the entire staff of Fortera Credit Union, Thank You for your continued membership and support. Likewise, I want to express my sincere gratitude to our Management Team and our Staff for their passionate commitment to the success and prosperity of our Credit Union. To each of you, my heartfelt thanks. J Thomas H. Tom Denney Chairman, Board of Directors 3
Executive Team Tom Kane President/CEO Jennifer Ventimiglia Chief Operating Officer Jason Heath Chief Financial Officer Patricia Spencer Chief Lending Officer Michael Carpenter Vice President Enterprise Risk Management James Hanson Vice President Marketing Patty Hemmingsen Vice President Retail Operations Bryan Shriver Vice President Technology 4
President/CEO Message Hello again, and thank you for helping us make 2016 a year of transition for our Credit Union! When you look at all that we have accomplished and all that we hope to accomplish in the near future, you can sense the palpable change and innovation we have been able to instill. This innovation was meant to help our members maximize the value of their relationship with Fortera Credit Union. We continue to build on that mission. I have personally challenged our staff to think of ways to serve our members Better, Simpler, and Faster by creating meaningful and memorable interactions with our members, wherever they choose to interact with us. I also continue to challenge the Board of Directors to think more broadly about the future of this institution. I am happy to report that each of these constituents have risen to the challenges presented to them, more often than not, exceeding my expectations. This year was a year of transition for our storied institution. Not only did our name and branding change, but we spent much of our time renewing our focus and working to provide greater value to our members. Whether through initiating projects that helped streamline our back office or creating new and exciting products and offers to help fulfill the brand promise to our members, our staff has remained focused on providing for our members wherever life takes them. In 2017, we will continue this focus on innovation and improvement. We are working diligently on creating a better online experience, improving our mobile banking capabilities, and exploring options to open the aperture of services we offer to our members. Last year was about change, this year will be about leveraging that change to create a deeper impact in our market. I would be remiss if I didn t mention the many ways we give back to the Clarksville and Hopkinsville markets. We have participated in, or directly contributed to, dozens of local charities this year, and we continue to find new and exciting ways to give back to the communities that have given us so much. We will also continue to leverage our partnership with Austin Peay State University and look for ways to help educate and inform students on their financial well-being. Fortera strives to balance providing members with the best and most economical financial services while providing leadership and support to better the communities we serve. In 2017, we will continue to celebrate the growth and prosperity of those communities. With your loyalty and continued support, we will fulfill our mission of improving the financial lives of our members. And remember, you are not just a customer here, you are an owner. Tom Kane President/CEO 5
Mission & Values Mission Statement Creating the right financial solution for you every time. Vision Statement We will create lasting relationships with our members and be our community s first choice for financial solutions by providing an extraordinary service experience. We will be the Employer of Choice in the communities we serve. People are a big deal At Fortera Federal Credit Union, people are a big deal. We love our members and we love our employees. We understand that engaged, empowered, and energized employees are going to provide better service to our members. For the past several years, we have been living a set of core values that serve as our unique, organizational identity. This culture shift has been aimed at providing our employees with a place in which they can grow and thrive. We have seen our employees embrace these values and excel at new levels. The Million Dollar Team was established in 2012 to recognize those employees that produced one million dollars or more in consumer loans annually. Forty-four employees were inducted into the 2016 Million Dollar Team for securing $135,192,825 in consumer loans. Our employee-driven committees Innovation Council, Culture Committee, Liaison Committee, Member Giveback, and Charitable Events Committee keep the lines of communication open between all levels of leadership. The purpose of the Innovation Council is to review submitted ideas from Credit Union employees on how to improve a product or a process or how to make the Credit Union a better place to work and a better place for members to do business. The purpose of the Culture Committee is to inform and enforce Credit Union values, promoting a positive work environment within Fortera Credit Union. They also work with Senior Management on special projects, such as All Staff Meetings. The Liaison Committee is an employee relations committee. It is responsible for planning the employee Christmas party and summer picnic and providing the personal touch to things, such as sending flowers to hospitalized employees and distributing employee contribution funds for gifts, such as birthdays and life-changing events. The Member Give Back Foundation is funded by voluntary employee payroll deduction or direct donation. Employees can nominate a member to receive help in any way that we are able to provide. This is a great way to show our members that they are more than just a member to us. We listen and are truly there for them in their time of need. The purpose of the Charitable Events Committee is to stay connected with the community by raising money and awareness for different local charities. It is our way of giving back. 6
Core Values At Fortera, we: Do things better, simpler, faster. Remain adaptable; embrace and drive change Exercise creative thinking to innovate Take initiative to resolve issues Stay positive and have fun. Demonstrate a positive attitude Build and foster respectful relationships Show each other care and friendliness Work as one team. Initiate opportunities to collaborate Complete assignments on time Demonstrate upbeat and positive attitudes Always assume positive intent Learn and teach. Know our products, services and systems Seek opportunities to grow and learn Share knowledge and expertise Serve members and the community. Provide the best education, products and services Be willing to assist teammates serving members Invest time, talent, and resources to strengthen our community 7
Supervisory Committee Mark E. Boone Chairman Leida Peréz James Embry Sidney Brown 8
Supervisory Committee Report Fellow Fortera Credit Union Members: My name is Mark Boone, and it is an honor and a privilege to serve as the Chairman of the Fortera Credit Union Supervisory Committee. The Committee is a group of volunteer members appointed by the Board of Directors. Those currently serving are Mr. Sidney Brown, Mr. Jim Embry, and Ms. Leida Perez. It is our duty to routinely review Credit Union operations to ensure compliance with governmental regulation, Board of Directors approved policies, and management-established procedures and directives. Due to personal and professional commitments outside the Credit Union and our strictly volunteer status, we rely on two principal methods to responsibly satisfy our obligation to the membership. The first is employment and supervision of an internal audit staff. The Internal Auditor, Mr. Mark Poole, has been with the Credit Union for more than 30 years. Because of his longevity and experience, he is especially familiar with all phases of the operation. The staff also includes Ms. Aniat Luna, who has served in the Internal Audit Department for the past four years. Together, they review routine operations and report to management and the Board of Directors, through the Supervisory Committee, the results of audits conducted throughout the year. The Committee periodically meets with the Internal Auditor to discuss completed and ongoing reviews as documented in the monthly Board of Directors board report. It is incumbent upon management to respond accordingly to findings and recommendations contained in the internal audit staff s reports. Additionally, the Supervisory Committee engages a Certified Public Accounting firm to conduct an independent, annual, and external audit of the Credit Union s financial statements, associated accounting practices, and to a degree, evaluate management s related internal control processes. In February 2017, Nearman, Maynard, and Vallez, CPA s, completed the annual audit utilizing generally accepted auditing standards. As a result, I am pleased to report that the Credit Union s financial statements fairly represent the results of operations for the year ending December 31, 2016. This is significant in that members may be confident that management complies with generally accepted accounting principles and that published reports accurately reflect the Credit Union s solid financial position. In the fall of 2016, examiners from the National Credit Union Administration (NCUA), the federal agency responsible for credit union oversight, conducted their required periodic regulatory review. Their examination yielded no significantly adverse findings to indicate the Credit Union poses any tangible or perceived liability to the fund insuring member deposits. This is further testament that the Board of Directors and Executive Management are doing an excellent job in fulfilling their role as responsible guardians of our members financial wellbeing. In closing, I want to thank my fellow Supervisory Committee members for their continued dedication and most especially, to Ms. Vickie Koelman, who recently departed the committee after many years of service. I also offer my congratulations to the Staff, Management, and Board of Directors for their continued hard work and commitment to making this one of the premier financial institutions in the communities we serve. Most of all, thank you to our loyal members for their constant faith and patronage. You are the reason for our past, present, and future success. Respectfully, Mark E. Boone Chairman, Supervisory Committee Fortera Credit Union 9
Financial Report (in millions) As of December 31 2016 2015 2014 2013 ASSETS LIABILITIES MEMBER EQUITY Loans $ 418 $ 376 $ 333 $341 Cash $ 20 $ 30 $ 32 $ 27 Investments $ 49 $ 66 $ 75 $ 56 Fixed Assets $ 20 $ 20 $ 21 $ 22 Other Assets $ 20 $ 16 $ 10 $ 9 Total Assets $ 527 $508 $ 471 $455 Shares & Certificates $ 415 $ 404 $ 398 $ 386 Accounts Payable $ 4 $ 5 $ 5 $ 3 Notes Payable $ 37 $ 30 $ 2 $ 5 Total Liabilities $ 456 $ 439 $ 405 $394 Reserves & Undivided Earnings $ 71 $ 69 $ 66 $ 61 Total Member Equity $ 71 $ 69 $ 66 $ 61 Total Liabilities & Member Equity $ 527 $ 508 $ 471 $ 455 ASSETS 2013 2014 2015 2016 0 50 100 150 200 250 300 350 400 450 500 550 DEPOSITS 2013 2014 2015 2016 0 50 100 150 200 250 300 350 400 450 500 LOANS 2013 2014 2015 2016 0 50 100 150 200 250 300 350 400 450 10
Financial Snapshot (in thousands) 2016 2015 Change ASSETS Cash In Vaults $ 10,189 $ 9,777 $ 412 Cash on Deposit $ 9,964 $ 19,902 $ (9,938) Investments $ 48,803 $ 66,202 $ (17,399) Auto Loans $ 223,810 $ 200,814 $ 22,996 Credit Card Loans $ 25,048 $ 22,264 $ 2,784 Mortgage Loans $136,046 $ 122,797 $ 13,249 Other Loans $ 37,972 $ 33,826 $ 4,146 Less: Allow/Loss $ (4,727) $ (3,537) $ (1,190) Fixed Assets $ 19,855 $ 20,360 $ (505) Other Assets $ 20,823 $ 15,293 $ 5,530 Total Assets $ 527,783 $ 507,698 $ 20,085 LIABILITIES Wholesale Funding: FHLB-Cincy $ 37,018 $ 29,510 $ 7,508 Retail Funding: Shares $ 84,095 $ 84,472 $ (377) Drafts $ 71,887 $ 70,650 $ 1,237 Galaxy $ 115,558 $ 103,316 $ 12,242 CD & IRA $ 133,913 $ 138,137 $ (4,224) Non-Member $ 9,728 $ 7,687 $ 2,041 Other Payables $ 4,238 $ 5,219 $ (981) MEMBERS EQUITY $ 71,346 $ 68,707 $ 2,639 Total Liability & M/E $ 527,346 $ 507,698 $ 20,085 INTEREST INCOME 2016 2015 Change Loans $ 19,220 $ 17,063 $ 2,157 Investments $ 899 $ 1,114 $ (215) INTEREST EXPENSE Borrowings $ (168) $ (98) $ (70) Deposits $ (2,570) $ (2,394) $ (176) NON-INTEREST INCOME $ 11,355 $ 10,733 $ 622 OPERATING EXPENSE $ (20,622) $ (19,867) $ (755) PROVISION FOR LOAN LOSS $ (5,024) $ (3,064) $ (1,960) NET INCOME $ 3,090 $ 3,487 $ (397) 11
Giving Back FUEL Program $1,495 United Way $28,089 Pennyrile $12,459 Clarksville $20,639 American Heart Association $4,500 Free Shred Day 200 Households 12 Relay for Life $4,324 Military Movie Night 658 Military Families Served Jeans for Bella $355 Alzheimer s Association $180 Sanctuary $640 Member Give Back $3,869 Gave flowers to a grieving member. Helped purchase a laptop for a member s brother who was graduating high school and heading off to college. Helped a member replace items destroyed in the flood. Helped a member whose child had cancer. Helped a member with funeral expenses when their spouse passed suddenly.
Wherever life takes you.
Wherever life takes you. 931.431.6800 800.821.5891 ForteraCU.com Clarksville 2050 Lowe s Drive 321 N. Spring Street 2193 Madison Street 500 Heritage Pointe Drive 145 Dover Crossing Road Fort Campbell Bldg. 88 Michigan Avenue Oak Grove 208 Segler Drive Hopkinsville 130 Griffin Bell Drive 300 Clinic Drive Inside Walmart Supercenter 3225 Lafayette Road 2016 Federally Annual Insured Report by NCUA 00 Equal Housing Lender