2013 Annual Report

2013
TABLE OF
CONTENTS
Board of Directors & Management Team
3
Chairman’s Message
5
President & CEO Report
7
GECU 2013 Lending Highlights
8
Audit Committee Report
11
Return to Members
12
Statements of Financial Condition
13
Statements of Income
13
BOARD
OF DIRECTORS
Gregory J. Watters
Chairman of the Board
Frank Garcia
Vice Chairman
Jose Quiñonez
Secretary/Treasurer
Guadalupe Giner
Grace Vaughn*
Teresa Quezada
Ricardo Soto
G E C U: We lc ome to You r Commu n ity.
ADVISORY MEMBERS
John Fernandez*
Armando Jimarez*
John Runkles
EXPIRATION OF TERMS
March 2015
March 2014
March 2015
March 2016
March 2014
March 2016
March 2014
Retired December 2013
September 2014
September 2014
AUDIT COMMITTEE
Ricardo Soto
Chairman
Frank Garcia
Guadalupe Giner
*Indicates changes in Board of Directors in 2013.
MANAGEMENT
TEAM
Crystal Long
President and CEO
Ceci Davila
Vice President Operations
Hazel Kennedy-Ledesma
Vice President Remote Services,
Deposits and Business Operations
Teresa Montoya
Vice President Marketing
Fernando Ortega
Vice President Information Technology
Darlene Palmore
Vice President Compliance
Art Perez
Vice President Lending
David Solis
Vice President Controller
Chris Tompkins*
Vice President Business Lending
Joe Underwood
Vice President Human Resources
*Indicates a change in senior management as of December 31, 2013.
3
CHAIRMAN’S MESSAGE
GECU had a stellar year in 2013, holding steadfast to our people
helping people mission and our philosophy of serving one
member at a time. Your credit union grew to more than
$2.0 billion in assets, a healthy 8.82% net worth, and
309,908 members strong.
GECU remained the largest, locally-owned financial institution,
providing our members with above average interest and dividend
earnings on their deposits and share accounts, in spite of a
historically low interest and earnings rate environment. Simply
put, your credit union is fiscally conservative and the driving
financial force in El Paso.
Our founding fathers’ vision was to pool their money together to
help their neighbors with low interest rate loans to meet their
needs when no one else would. That’s still a meaningful and
important philosophy and why our members join the credit union
today, but there’s more. It’s also about community, relationships,
trust, service, and increasing our members’ financial literacy and
financial independence.
In 2013, GECU continued its new service and delivery
expansion strategy built around the way you live — bricks
and mortar and bricks and clicks. GECU continues to add
neighborhood centers — smaller footprints that offer
convenience, expanded hours, latest technologies and
personal service. And our bricks and clicks includes a new
award-winning website, online and mobile banking on your
time, and the ability for you to sign your loan documents
from the convenience of your home with eSignature. If you
prefer calling or chatting live, that’s OK too. We’re still just a
phone call or a keyboard away. It’s your choice.
It’s you, GECU’s member-owners! You’re our driving force.
We put you and your financial needs first — we always have.
Staying the course continues to steer us on the right path:
the path to your financial independence. We wouldn’t have it
any other way!
Thank you for helping your neighbors and our local
community, and for allowing us to be your credit union!
So how can we keep up with technology and serve our members’
and our community’s changing lifestyles and needs? Your board
provided guidance and support to GECU’s professional staff,
which came up with a plan to accomplish those goals.
Gregory J. Watters
Chairman of the Board
STANDING, LEFT TO RIGHT: Jose Quiñonez, Gregory J. Watters, Frank Garcia, Armando Jimarez, John Runkles and Ricardo Soto
SITTING, LEFT TO RIGHT: John Fernandez, Guadalupe Giner, Grace Vaughn and Teresa Quezada
5
PRESIDENT AND CEO REPORT
Your credit union had a remarkable year in 2013. I’m honored to work
for you and share the results.
GECU increased consumer and mortgage loans funded by a stellar
$825.1 million, representing an increase of more than $103 million or
14.3% loan growth over 2012. This is a solid indicator that our focus on
service excellence, raising awareness of your credit union, the GECU
brand, and streamlining our lending strategy to give you more choices
helped us serve more of our members, neighbors and community.
GECU also had a healthy net income of $14.3 million, building your
credit union’s net worth to $178.1 million.
How did we achieve success? Teamwork and commitment from a
dedicated, fiscally minded professional staff and a board that offers
guidance and focuses on our members’ needs and best interests were
key factors to achieving success. Community development initiatives
were key factors too.
PRESIDENT AND CEO: Crystal Long
GECU launched Prosperus, an initiative focused on financial education,
home purchase assistance and credit counseling. And, the Cornerstone
Credit Union League (CCUL) recognized our extraordinary efforts to
meet the financial service needs of our area, our long-term vision, and
our commitment to provide our community with the services needed to
improve their lives, by honoring GECU with the designation of Together
We Advance (Juntos Avanzamos).
We opened new branches, including our innovative Oregon and
University Branch, which includes Kinley’s Tea House, providing a
place to learn for our community’s future leaders and a way to
empower them with financial literacy and independence. We like to
refer to our new branch with Kinley’s Tea House as a fusion of
finance and refreshment!
GECU is always looking out for our members, and in 2013, we took
a closer look at our members with financial hardships. The GECU
Bylaws were then amended and approved on December 3, 2013,
to offer prior members the opportunity to establish a renewed
commitment to their financial stability and to align with the
regulatory revisions to the Texas Finance Code.*
There is a lot to celebrate about 2013. But what we celebrate the
most is you, GECU’s member-owners. What we do is all about you
and your financial freedom. Thank you for allowing us to serve you.
What matters to you, matters to us.
Crystal Long
President and CEO
We also celebrated The University of Texas at El Paso’s 100-Day
Centennial Countdown with you, because we share a common goal of
education with the university. We know that prosperity of the mind
emanates in prosperity for all, and like GECU, the university is
important to our community’s success.
*Change to GECU Bylaws — 2013
The amendments to the GECU Bylaws were approved on December 3, 2013. The Bylaws were amended to offer prior members the opportunity to establish a renewed commitment to their financial stability and to align with the regulatory revisions
to the Texas Finance Code as follows:
- Extend the confidentiality requirements to include “Honorary Directors” and to the extent necessary in connection with a loan or an extension of credit;
- Indicate the Board may appoint up to six Honorary or Advisory Directors;
- Allow the Credit Union to submit the certificate of election as prescribed by the Commissioner;
- Indicate a Director may not vote by proxy at a meeting of the Board;
- Include the pecuniary interest of Honorary and Advisory Directors and clarify the definition of “immediate family”;
- Provide that the credit union may purchase insurance as an “enterprise,” as defined by Business Organizations Code 8.001(2).
7
SUMMER AUTO
GECU 2013 LENDING HIGHLIGHTS
Direct vehicle loans
LOAN SALE
18
Indirect vehicle loans
Mortgage loans
Other loans
Credit cards
16
%
14
%
15
%
MAY 23–SEPTEMBER 3
%
37
%
NO PAYMENTS
FOR 90 DAYS*
ON NEW AND USED VEHICLES
18 %
37 %
16 %
14 %
15 %
DIRECT VEHICLE LOANS
INDIRECT VEHICLE LOANS
MORTGAGE LOANS
OTHER LOANS
CREDIT CARDS
9
AUDIT COMMITTEE REPORT
The Audit Committee is responsible for ensuring the appropriate oversight of GECU’s required financial reporting objectives and for
ensuring that established practices and procedures are sufficient to safeguard members’ assets in accordance with law.
The Audit Committee is assisted by GECU’s Internal Audit Department, which conducts comprehensive internal audits throughout the
year, ensuring that 1) accounting records and reports are prepared promptly and accurately reflect operations and results;
2) established internal controls are effectively maintained and adequately protect the credit union, its assets, members, management,
and employees; and 3) each area of the credit union is carrying out the plans, policies and procedures for which it is responsible as
directed by the board of directors.
The Audit Committee also oversees the annual comprehensive audit conducted by the independent certified public accounting firm of
Lauterbach, Borschow & Company, P.C. Their examination was conducted in accordance with generally accepted auditing standards
as issued by the American Institute of Certified Public Accountants.
As a result of the internal and independent audits, the Audit Committee believes the financial statements included in the
2013 Annual Report fairly present the financial condition of GECU for the year ending December 31, 2013.
We appreciate GECU’s board of directors, management and staff for their cooperation.
Ricardo Soto — Chairman
Frank Garcia
Guadalupe Giner
A full copy of GECU’s 2013 financial statements may be obtained by contacting the office of Crystal Long, GECU President and CEO.
AUDIT COMMITTEE
LEFT TO RIGHT: Frank Garcia, Guadalupe Giner and Ricardo Soto
11
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
Years Ended December 31, 2013 & 2012
YEAR END 2013
RETURN TO MEMBERS:
Life Savings
Dividends — Shares
839,865
Interest — MMA
641,509
Interest — Checking
211,597
Interest — IRA
Interest — CD
Total Return to Mbrs
1.4%
$269,848
1.1
%
13,065,635
34,635,978
Operating Expenses
52,425,268
16.3
28.6%
11.8
%
14,252,010
$121,051,244
100%
Cash and cash equivalents
Investments:
Available for sale
Held to maturity
Other investments
Loans held for sale
Loans receivable, net
Accrued interest receivable
Accounts receivable and other assets
Mortgage servicing rights
Property and equipment, net
NCUSIF deposit
$
Total assets
$
150,469,036
$
79,331,860
145,281,416
10,452,976
2,142,161
1,507,268,215
5,458,523
37,352,838
1,353,545
49,518,149
17,151,187
2,005,779,906
313,542,959
68,765,184
35,711,316
10,412,776
3,798,786
1,405,343,554
5,093,966
36,074,471
1,070,074
48,649,274
16,728,531
$
1,945,190,891
LIABILITIES AND MEMBERS’ EQUITY
LIABILITIES
%
$19,737,988
Employee Compensation & Benefits
66.1%
100%
DISTRIBUTION OF EARNINGS:
Reserves
Total Distribution of Earnings
23.8
%
4,709,534
$19,737,988
Return to Members
4.3
3.3%
%
2012
2013
ASSETS
Members’ share and savings accounts
Interest and dividends payable to members
Notes payable
Accrued expenses and other liabilities
$
Total liabilities
$
1,814,186,213
969,319
500,000
11,996,022
$
1,827,651,554
$
1,769,898,442
1,146,914
9,927,347
1,780,972,703
MEMBERS’ EQUITY
43.3
%
CONSOLIDATED STATEMENTS OF INCOME
Years Ended December 31, 2013 & 2012
2013
Interest income
Loans
Investments
$
81,631,724
2,587,628
2012
$
85,089,284
1,279,466
84,219,352
86,368,750
19,468,140
15,743
22,194,439
-
19,483,883
22,194,439
64,735,469
64,174,311
6,733,076
10,320,749
Net interest income after provision for loan losses
58,002,393
53,853,562
Non-interest income
Service fees
Loan fees
Net gain on sale of loans
Mortgage servicing
Gain on sale of repossessed assets
Other
24,986,224
3,053,309
1,879,921
415,689
1,244,869
3,560,700
25,356,951
2,776,693
2,707,623
519,540
547,930
2,429,510
Total non-interest income
35,140,712
34,338,247
Non-interest expense
Compensation and benefits
Office operations
Occupancy
Education, promotions and conferences
Other, net
34,635,978
27,753,890
5,313,109
5,255,882
4,560,141
34,393,825
26,151,098
5,280,938
3,864,203
2,759,417
Interest expense
Members’ share and savings accounts
Borrowed funds
Net interest income
Provision for loan losses
Retained earnings
Accumulated other comprehensive income
178,099,845
28,507
163,847,835
370,353
Total non-interest expense
77,519,000
72,449,481
Income before extraordinary items
15,624,105
15,742,328
Total members’ equity
$
178,128,352
$
164,218,188
Total liabilities and members’ equity
$
2,005,779,906
$
1,945,190,891
Extraordinary items
NCUSIF stabilization fund
(1,372,095 )
(1,589,210 )
Net income
$
14,252,010
$
14,153,118
13
SHARE AND DEPOSITS
SPECIAL SERVICES
Share (savings) Accounts
Christmas Club Accounts
No Excuse Savers Club Accounts
Certificates of Deposit
Money Market Accounts
Personal Checking Accounts
Business Checking Accounts
Individual Retirement Accounts (IRAs)
No Excuse IRA Certificates of Deposit
ATMs
Automatic Transfers (between GECU accounts)
Business Cash Management System
Direct Deposit
Domestic Wire Transfers
GECU Call Center
GECU Loan Center
GECU Online Banking — mygecu.org
Bill Pay
Account balances and transfers
Online loan applications
Credit card management
FinanceWorks™
GECU Mobile Banking
eStatements
eSignature service — new in October 2013
GECU Knowledge Base, Email and GECU Chat
GECU Personal Tellers
GECU Debit Card
Night and Lobby Depositories
Overdraft Privilege
Safe Deposit Boxes
SmartLine (24-hour account information)
LOANS
Personal Loans
New and Used Auto Loans
Home Mortgage Loans
Home Equity Loans
Home Improvement Loans
Platinum MasterCard® Credit Cards™
Lines of Credit
LOCATIONS
Airway and Edgemere
1245 Airway Boulevard
(Drive-thru facility)
Alameda and Ysleta
8936 Alameda Avenue
Federal Building
700 East San Antonio Street
1st Floor, Federal Building
Horizon and Kenazo
14476 Horizon Boulevard
Mesa and Mesa Hills
5670 North Mesa Street
Montwood and Desert Sun
12400 Montwood Drive
North Loop and Horizon
10610 North Loop Drive
Operations Center
1225 Airway Boulevard
Oregon and University*
2208 North Oregon Street
Resler and Helen of Troy
1500 North Resler Drive
Rojas and Zaragoza
11987 Rojas Drive
Transmountain and Dyer
5625 Transmountain Road
Trawood and George Dieter
3037 Trawood Drive
(Drive-thru facility)
Viscount and Airway
7227 Viscount Boulevard
Vista Del Sol and Yarbrough
10435 Vista Del Sol Drive
Yarbrough and North Loop*
429 Yarbrough Drive
MAILING ADDRESS
PO Box 20998
El Paso, Texas 79998-0998
TELEPHONE NUMBERS
All Offices
778.9221
1.800.772.4328
SmartLine
778.0009
1.800.772.0009
GECU Call Center and Loan Center
778.9221
1.800.772.4328
WEB ADDRESS
mygecu.org
It’s easy to become a member. Call GECU — at 778.9221
or 1.800.772.4328 — today for more information.
*Opened in 2013.