annual report - Southland Credit Union

annual report
Serv
ice
S
In
avin
g
s
ion
t
a
v
no
unity
2013
mm
Co
M is
sio
n
on
i
s
i
V
st
Tru
Federally insured by NCUA
R
e
l
a
t
io
n
s
h
i
p
s
Southland Credit Union is dedicated
Mission
Statement
to exceptional Member service
resulting in superior financial
strength, offering convenience,
courtesy, and valued solutions.
Credit Union
1 Southland
Annual Report 2013
Table of Contents
Board of Directors & Supervisory Committee..................................... 3
Executive Team............................................................................................... 4
Board Chair & President’s Message......................................................... 5
Building a Stronger Community.............................................................. 7
Treasurer’s Report.......................................................................................... 9
Consolidated Statements of Financial Condition............................11
Consolidated Statements of Income....................................................12
Supervisory Committee Report.............................................................13
Southland Credit Union
Annual Report 2013
2
vision
Board of Directors
Robert L. Hale
Chairman
Walter Finnigan
Vice Chairman
G. David Mills
Director
Dolores M. Arriola
Director
Annie Perez
Secretary/Treasurer
Angie Avery
Director
William de la Garza
Director
Supervisory Committee
Jose L. Manzano
Committee Chair
Credit Union
3 Southland
Annual Report 2013
Morris J. Litwack
Committee Secretary
Bradley P. Silcox
Committee Member
Executive Team
Ferris R. Foster
President & CEO
Thomas G. Lent, CPA
Senior Vice President & CFO
Rene M. LeJay
Senior Vice President & COO
Matthew P. Herrick
Curt A. Bannock
Vice President of Sales & Marketing Vice President & CIO
Cynthia E. Smolinski
Robert A. Koch
Vice President of Human Resources Vice President of Lending
Vision
Statement
Southland Credit Union will be a
dynamic, innovative and exemplary
financial institution dedicated to
meeting the needs of its Members.
Southland Credit Union
Annual Report 2013
4
service
Board Chair & President’s Message
Thank you for choosing Southland as your Credit Union; it is all because of you, our Members,
we had another phenomenal year. Southland’s core vision is to be a dynamic, innovative and
exemplary financial institution dedicated to meeting the needs of our Members. This philosophy
can easily be seen in all that we do, especially as we look back on our many successes in 2013.
Fulfilling our commitment to meet the needs of our Members includes ensuring we provide
the best possible level of service, a variety of financial products and services, as well as highly
competitive pricing. We are confident that Southland has the best employees and leadership
available to ensure we have the resources required to provide a consistent first class level of service.
The Management and Board of Directors dedicated a significant amount of time and resources in
2013 to develop the foundation for big advancements in the coming years. We are continuing to
research, create goals, and develop actions to improve your Credit Union. You will start to see some
advancements in 2014 with others unfolding over the next several years.
Credit Union
5 Southland
Annual Report 2013
The Credit Union continues to receive high
marks in our overall Member satisfaction levels,
placing Southland above most of our peers.
We take this as a clear indication that we have
heard your needs and charted a proper course
of action while earning your trust. With over
47,000 Members, we provide an exceptional
level of service to many people with various
requirements.
While providing our membership with financial
solutions throughout the year, we also
expanded Southland’s field of membership
to include the entire geographic city of Santa
Monica, CA and its adjoining cities known as
‘The Greater Santa Monica Area.’ In order to
continue Southland’s tradition of providing
convenience and exceptional service, a new
branch office opened in downtown Santa
Monica to support the needs of our new
Members in the Santa Monica community.
We also continue to invest in technological
advances to increase accessibility and
convenience. These advances included
upgrades to our transaction processing
systems, allowing for digital signatures of
transactions, enhancements to our online
and mobile banking channels, and further
efficiencies to our membership application to
provide a consistent Member experience.
The communities we serve continue to be
an integral part of our corporate culture. We
support many non-profits and charitable
organizations and participate in community
events throughout our field of membership.
Through our many Select Employer Groups,
we strengthened our relationship with local
businesses and developed new partnerships.
As we look back on the many achievements
made throughout 2013, we look forward to
continuing to build an even brighter future
on this same platform of success. Everything
we do in the future will be clearly focused
on providing the highest level of service and
convenience while providing quality products
for our Members.
Southland exists because of you and we greatly
appreciate your loyalty and support. On behalf
of the Board of Directors, the Management
team, and our staff, we are honored to have the
privilege of serving you and thank you for your
membership.
Robert L. Hale
Board Chair, Board of Directors
CORE
VALUES
Ferris R. Foster
President and Chief Executive Officer
Provide exceptional service with
integrity, honesty and creativity.
Provide staff with an atmosphere of
respect, education, and career growth.
Southland Credit Union
Annual Report 2013
6
community
3
1
0
2 nity
u
m
m
o
C ents
v
E
Race on the Base
Wings, Wheels and Rotors
Downey Kids Day
Cypress Festival and 5k
Run Seal Beach
31st Annual Los Alamitos Police Appreciation Luncheon
LA County Bar Association New Admittee Luncheon
Downey Chamber of Commerce State of the City Event
Long Beach Legal Professionals Association Annual Event
Garden Grove Foundation Golf Tournament
Los Alamitos Chamber Golf Tournament
City of La Mirada Health and Wellness Expo
Seal Beach Christmas Tree Lighting Ceremony
Los Alamitos Winter Wonderland Event
San Fernando Valley Bar Association—
Member Appreciation Event
LA County Parks & Rec Annual Picnic
Velocity Vehicle Group/LA Freightliner—
Annual Employee Picnic
Garden Grove Chamber of Commerce—
107th Annual Gala and Awards Ceremony
Professionals In Human Resources Association—
(PIHRA) Conference
Greater Los Angeles Association of Legal Administrators
Friends of Long Beach Animal Walk
LA Paralegal Association Legal Conference
Downey Chamber of Commerce Business Expo
Taste for Los Al
Santa Monica Municipal Employees Association
Los Alamitos State of the City
Credit Union
7 Southland
Annual Report 2013
y
Building a
Stronger
Community
The needs of the community is a priority at Southland Credit Union. Our team members
and Members often give back to the community with their own time and funds, ranging
from support to education advancement.
Southland’s employees volunteer and support our community throughout the year
with various charities, toy drives, food drives, women and children’s causes, local school
programs, community events, and several other important community needs.
We care as much about our communities’ quality of life as we do their financial success.
Southland Credit Union
Annual Report 2013
8
savings
Treasurer’s Report
Southland Credit Union experienced another solid year in
2013 with net income of $2.9 million. This allowed the Credit Union
to continue to build its financial reserves, which are now at a record
level of nearly $58 million. With a Net Worth ratio of more than 12% of
assets, Southland is 70% above the minimum regulatory requirement to be
considered “well capitalized” of 7%.
At the end of 2013, the Credit Union’ assets are $481 million, virtually the same as
2012. This is part of the Credit Union’s strategy to build capital and hedge against
future interest rate risk during the current low market rate environment. Deposits
are $420 million, and we returned $1.9 million to you in the form of dividends and
interest. The Credit Union also funded 4,000 new loans to our Members in 2013
totaling $165 million, a 27% increase from 2012!
Your Credit Union is in solid financial condition, is safe, and is well positioned for
continued success and future growth. We look forward to continuing to serving you,
our Member-Owners, and your family for years to come.
It has been my pleasure to serve as Secretary/Treasurer of your Credit Union. The
volunteer Board of Directors and Supervisory Committee Members work hard to
ensure the continued safety and soundness of the Credit Union and we thank you
for your Membership.
Sincerely,
Annie Perez
Secretary/Treasurer
Board of Directors
Credit Union
9 Southland
Annual Report 2013
Checking Accounts
18%
Deposit Mix
(In Millions)
Term Share
Certificates
Term Share
37%
Certificates
IRAs
1%
37%
Term Share
Certificates
37%
Deposit Mix
Deposit Mix
Money Regular Shares
Market (In Millions)
Accounts
Regular
Shares
Term
Share
Certificates
20% (In Millions)
Term
Share
Certificates
Checking
Accounts
Term
Share
Certificates...............................$146
Deposit
Mix
Term Share Certificates
35%
Regular
Shares
Checking
Accounts
IRAs
Regular
Shares.
............................................$107
(In Millions)
Term
Share
Certificates
IRAs Market
Accounts...............................$85
Money
Money
Market
Accounts
Checking
Accounts
Checking
MoneyAccounts........................................$77
Market
Accounts
Regular Shares
26%
Loan Mix
IRAs.................................................................$5
IRAs
Money Market Accounts
Term Share
Certificates
Term Share
37%
Certificates
Real Estate
35%
(Gross In Millions)
Personal Loans
6%
Commercial Regular
Loans
11%
37%
Term Share
Certificates
37%
Shares
Regular
Shares
Term Share
Certificates
Term
Share
Certificates
Checking
Accounts
Real
Estate
Loans.
........................................$112
Home Equity
15%
Regular
Shares
Checking
Accounts
Vehicle
..............................................$105
IRAs Loans.
Term
Share
Certificates
Loans.
Home
Equity
.......................................$47
IRAs
Money
Market
Accounts
Vehicle Loans
33%
Loans.........................................$36
Commercial
Checking
Accounts
Money Market
Accounts
Personal
IRAs Loans..............................................$18
Money Market Accounts
Total Assets
Member Shares
$485
$425
$340
$480
$415
$335
$475
$405
$330
$395
$325
$385
$320
$375
$315
Member Loans
(In Millions)
(In Millions)
$470
$465
$460
$455
(Net In Millions)
$365
$450
2009
2010
2011
2012
2013
2009
2010
2011
2012
2013
$310
2009
2010
2011
2012
Southland Credit Union 10
Annual Report 2013
2013
Checking
17
Checking
17
Checking
17
c on solidate d s t ate m e nts o f
FINANCIAL CONDITION
Assets
December 31, 2013 AND 2012 (in thousands) (unaudited)
Cash and Cash Equivalents
Investment Securities:
Available-For-Sale
Other Investments
Federal Home Loan Bank Stock
Loans to Members, Net of the Allowance for Loan Losses
Accrued Interest Receivable
NCUSIF Deposit
Property and Equipment, Net
Other Assets
$
TOTAL ASSETS
$
84,451
6,812
2,231
313,856
1,231
4,137
8,609
17,479
Liabilities
Members’ Shares
Borrowed Funds
Accounts Payable and Other Liabilities
2013
41,992 $
$
TOTAL LIABILITIES
480,798
2013
419,954
0
4,555
2012
50,367
72,008
9,047
2,567
315,969
1,312
4,131
8,559
18,658
$
$
482,618
2012
419,850
2,847
4,645
424,509
427,342
12,887
40,509
4,574
(1,681)
12,887
37,638
4,574
177
56,289
55,276
Members’ Equity
Regular Reserve
Undivided Earnings
Equity Acquired in Merger
Accumulated Other Comprehensive Income
TOTAL MEMBERS’ EQUITY
TOTAL LIABILITIES AND MEMBERS’ EQUITY
Credit Union
11 Southland
Annual Report 2013
$
480,798
$
482,618
$
trust
c o nsol i date d s t ate m e nts o f
INCOME
For the years ended December 31, 2013 AND 2012 (in thousands) (unaudited)
Interest Income
Loans to Members
Investment Securities and Cash Equivalents
Total Interest Income
2013
16,073
1,128
17,201
$
2012
18,784
771
19,555
$
Interest Expense
Members’ Shares and Savings Accounts
Borrowed Funds
Total Interest Expense
Net Interest Income
1,852
124
1,976
15,225
2,292
1,382
3,674
15,881
Provision for Loan Losses
Net Interest Income After Provision for Loan Losses
534
14,691
451
15,430
Non-Interest Income
Fees and Charges
Other Non-Interest Income
Other Non-Interest Gain
Total Non-Interest Income
Income Before Non-Interest Expense
4,189
2,212
12
6,413
21,104
3,900
1,732
1,048
6,680
22,110
Non-Interest Expense
Compensation and Benefits
Operations
Occupancy
NCUSIF Premium Assessment*
Total Non-Interest Expense
9,937
5,875
2,090
331
18,233
8,723
5,215
1,755
370
16,063
NET INCOME
$
2,871
$
6,047
* NCUA mandated charge for Corporate Stabilization Program.
Southland Credit Union 12
Annual Report 2013
relationships
Supervisory Committee Report
The Supervisory Committee is an independent group of volunteers
who evaluate the Credit Union’s financial strength and operations in
order to protect and safeguard Member assets. The Supervisory Committee
engages two independent CPA firms to assist with these duties. One CPA
firm completes the external financial statement audit and Member account
verification, while the other conducts ongoing internal audits of the Credit Union’s
operations and controls. The Committee also works directly with Federal and State
regulators in facilitating routine regulatory examinations of the Credit Union.
The Supervisory Committee also provides an open avenue of communication for the
Members of the Credit Union. Our Members benefit from this open communication
because your comments and feedback help to ensure Southland maintains the highest
level of integrity and service.
The Independent Auditor’s Report as of and for the years ended December 31, 2013 and
2012 indicated the Credit Union’s financial statements are fairly stated in accordance with
generally accepted accounting principles. It is the opinion of the Supervisory Committee
that your Credit Union is financially strong, and its operations comply with sound
business practices to protect and safeguard the Members’ assets.
Sincerely,
Jose Manzano
Committee Chair
Supervisory Committee
Credit Union
13 Southland
Annual Report 2013
u
o
Y
k
n
a
Th
Proudly Serving
the Employees of over
300 Companies
S O C A L PE NSKE AUTO GROUP
LO S A N GE L E S COUNT Y E M PLOYE E S
S A N TA M ONIC A CIT Y E M PLOYE E S
R E T I R E D E M P LOYEE S OF LOS ANGE L E S COUNT Y (RE L AC )
I N T E RNAL RE V E NUE SE R V IC E
LO S A N GE L ES COUNT Y BAR ASSOCIATION
LO S ANGE L E S TIM E S
LO S A N GEL ES COUNT Y SANITATION DISTRIC T
DE PA R TM EN T OF PARKS & RE CRE ATION
DE PA R TM ENT OF BE ACHE S & HARBOR
DEPA R TME NT OF PUBL IC WORKS
HYDR AF LOW USA
CO L DWE L L BANKE R
C E NTURY 21
LON G B EAC H CO N V E NTION & E NTE R TAINM E NT CE NTE R
MA N H AT TAN BE ACHWE AR
O P TIONS F OR YOUTH
H AT H AWAY- S YC AMORE S CHIL D & FAM ILY SE R V IC E S
S EDGWICK ’S CM S
L A F RE IGHTL INE R
CO M M E RCE C ASINO
LO S A L AM ITOS R ACE COURSE
TA R Z A N A T RE ATM E NT CE NTE R, INC
U. S . MARSHAL L SE R V ICE S
U. S . BA N K RUP TC Y COUR T AND DISTRIC T COUR TS
U. S . S EC URI T I E S E XCHANGE COM M ISSION
Southland Credit Union 14
Annual Report 2013
BRANCHES
DOWNEY
8545 Florence Ave.
Downey, CA 90240
LOS ANGELES
200 S. Spring St.
Los Angeles, CA 90012
GARDEN GROVE
12860 Euclid St.
Garden Grove, CA 92840
LOS ANGELES
(FEDERAL BLDG)
300 N. Los Angeles St.
Los Angeles, CA 90012
LOS ALAMITOS
(CORPORATE OFFICE)
10701 Los Alamitos Blvd.
Los Alamitos, CA 90720
SANTA MONICA
525 Santa Monica Blvd.
Santa Monica, CA 90401
MAILING ADDRESS
P.O. Box 7022
Downey, CA 90241-7022
In addition to our Southland branches, you have access to
over 5,000 shared branch locations worldwide.
Visit www.SouthlandCU.org to find a branch location near you.
ATMs
Nearly 30,000 Surcharge-FREE ATMs nationwide—
that’s more FREE ATMs than the largest banking network.
To find a FREE ATM near you, visit www.SouthlandCU.org
PHONE
800.426.1917
WEBSITE
www.SouthlandCU.org
Federally insured by NCUA