6 1 S t annuaL report 2013 - HAPO Community Credit Union

6 1 S T ANNUA L REPORT 2 0 1 3
HAPO 2013
6 1 ST A N N U A L R E P O R T
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O R G ANI Z A T I O NA L C omm i tm e n t
B e i n t h e M om e n t
We commit to listening to our
members to clearly understand
what’s needed and to respond
efficiently and professionally
every time.
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ord e r o f b u s i n e ss / 6 1 st a n n u a l m e e t i n g
T HU R S D A Y, AP R I L 1 7 T H , 2 0 1 4
1.Call to Order – William Tanner
2.Reading of Minutes, 60 th Annual Meeting – Ken Bays
3. Chairman’s Message – William Tanner
4. President’s Message – David Schulz
5. Supervisory Committee Report – Darrel Stafek
6. Unfinished Business – William Tanner
7. New Business – William Tanner
A. Other New Business
8. Door Prize Drawing – Crystal Scharnhorst, Annie Bixler & Silvia Idrovo
HAPO 2013
6 1 ST A N N U A L R E P O R T
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A year
in review
To celebrate our 60th anniversary
we wanted to do something big,
and continue to give back to
our members! We accomplished
this by running a variety of
promotions, and giving back
to our community members by
volunteering and donating to
many events in our community.
Here’s a look back!
Go Green and be
Financially Lean!
Provided tips on how
to bank green and be
financially fit. Our way
of helping our members
develop a solid financial
foundation
Visa Balance
Transfer
promotion!
Dec.
2013
JAN.
2013
Kicked off the New
Year with an auto
loan promotion!
“Get an Auto Loan
through HAPO and
enter to win a $500
Gas Card!”
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FEB.
2013
MAR.
2013
We partnered with Dura-Shine Clean
to giveaway free
house cleanings!
“Enter to win Three Free
House Cleanings when
you Apply for a Mortgage
Loan during March!”
APR.
2013
MAY
2013
Kicked off our
“On-time
Closing
Guarantee”
Program
Kicked off our
summer events
as the “Official
Sponsor of
Summer.”
JUN.
2013
HAPO’s “community” has
expanded over the years to include
Yakima, Hermiston, Sunnyside
and Walla Walla. We’re proud to
sponsor the Hot Shots 3-on-3
Basketball Tournament in Yakima,
the Walla Walla Sweets Baseball
team, the Hermiston Funfest, and National Night Out in Sunnyside.
JUL.
2013
AUG.
2013
Queensgate
Grand Opening (This branch marked
our 14th location!)
Community
While we pride ourselves
on being the “Official
Sponsor of Summer,” we’re
humbled by the tremendous
outreach within our
community year round,
and the opportunities we
have to support other
organizations in our
community.
SEP.
2013
HAPO Community
Relations Group
Yard Sale!
We raised funds for
families in need!
OCT.
2013
Coats for Kids,
and toys for children.
HAPO Employees raised
money to provide gifts and
necessities to 19 families
in need in our community
helping make their holidays
a little brighter.
NOV.
2013
DEC.
2013
JAN.
2014
2nd Harvest Food Drive.
Through the contributions
from HAPO employees and
local volunteers we were able
to provide nearly 28,000 meals
to people in our community.
— it’s not just our middle name.
HAPO 2013
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HAPO 2013
We believe in supporting the health
and liveliness of our community by
volunteering and sponsoring many
events and charities in our community.
The past year was an exciting year for us at HAPO Community
Credit Union as we celebrated our 60th anniversary and fifth year
as the “Official Sponsor of Summer”. We expanded on the success of
the “Official Sponsor of Summer” and increased our sponsorships in
the Tri-Cities, Yakima, Sunnyside, Hermiston and Walla Walla.
Since trademarking the “Official Sponsor of Summer” in 2009, event
exposure and turnout has grown tremendously. We continue to
sponsor a large number of community events during the summer
months re-evaluating all of the events we participate in to ensure a
strong, family friendly summer for our community.
In 2013 we maintained sole sponsorships for the Live @ 5 Concert
Series, Cool Desert Nights, Hot Shots 3-on-3 Tournament in
Yakima, the River of Fire Festival, and the Over the River Air Show.
By continually re-evaluating events, we’re able to increase HAPO’s
visibility as not only a dedicated and committed member to growing
our community, but as an organization committed to enriching the
lives of our neighbors, family and friends.
Our summer events would not be possible without our dedicated
employees. The commitment and dedication our employees give to
our members go beyond financial transactions; our employees truly
believe in the giving to our members by volunteering at our events
and in the community. Whether you interact with your favorite teller
at a HAPO Community Credit Union Financial Center, or engage with
a HAPO Community Credit Union employee at the Live @ 5 Concert
Series; you will always be treated with superior customer service
and respect. While we pride ourselves on being the official sponsor
of summer, we’re humbled by the tremendous outreach within
our community and the number of organizations we partner with
throughout the year to make our community stronger!
Community
• 2nd Harvest
• Cinco de Mayo – Sunnyside
• Circle of Hope
• First Night Tri-Cities
• Habitat for Humanity
• Hot Shots 3 on 3
Tournament–Yakima
• Kadlec Foundation
• Golf Tournaments
• Kadlec for Kids-a-thon
• KNDU Coats for Kids
• KNDU Family Food Drive
• Live @ 5 Summer
Concert Series
• March of Dimes
• National Night OutSunnyside
• Operation Thank You
• Red Cross
• Real Heroes Breakfast
• 12 Days of Giving
• SIGN Benefit
• Sunnyside Fireworks Show
• Tri-Cities Cancer Center
• Tri-Cities Regional Chamber
of Commerce
• Cool Desert Nights
• River of Fire Festival
• Tri-City Water Follies
• Tri-City Food Bank
•
•
•
•
•
VFW Holiday Dinners
Yakima Greenway’s
Gap 2 Gap
Yakima 4th of July
Yakima Cinco de Mayo
Fiesta
Scholarships for
Students
•AAAS
•HAAP
•WSU
Children’s Events
and Involvement
• Boys and Girls Club
• Children’s Developmental
Center
• Every 15 Minutes Program–
Richland and Kennewick
High Schools
• Junior Achievement
• Special Olympics
• Children’s Reading
Foundation
Building Funds
• Kadlec Regional Medical
Center NICU
In 2013 we sponsored or partnered with the following organizations
and events:
HAPO 2013
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FINAN C IA L S T A T E M EN T S
C omparativ e Balance Sheets
As of December 31, 2013 & 2012
Assets
Cash and Cash Equivalents
Investments – Net
Loans to Members – Net
NCUSIF Deposit
Land and Buildings – Net of Depreciation
Furniture and Equipment – Net of Depreciation
Other Assets
TO TAL ASSETS
L i a bilit ies & Memb ers ’ Equi ty
Liabilities
Borrowed Funds
Accrued and Other Liabilities
TO TAL L IA B IL ITIE S
Member deposits
Savings Accounts
Checking Accounts
Money Market Accounts
Certificates of Deposit
IRA Accounts
Members’ Equity
Retained Earnings
Other Comprehensive Income
ASSETS (in millions)
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2009
2010
ANNUAL REPORT
2011
2012
HAPO 2013
2012
$52,598,504
927,740
1,083,097,918
10,224,987
52,893,750
10,241,978
34,834,790
$39,287,465
981,033
974,910,263
9,110,586
59,364,127
8,714,153
25,041,664
$1,244,819,667
$1,117,409,291
$50,000,000
19,538,051
–
$17,300,260
69,538,051
$17,300,260
220,040,071
125,968,478
267,586,473
461,294,356
11,241,748
1,086,131,126
195,045,678
105,670,345
267,474,331
443,295,637
11,054,377
1,022,540,368
86,098,361
(8,529,698 )
77,568,663
96,337,330
(7,186,840)
89,150,490
TO TAL L IA B IL ITIE S & MEMBERS’ EQUI TY
$1300
$1250
$1200
$1150
$1100
$1050
$1000
$950
$900
$850
$800
$750
$700
$ 0
2013
MEMBER LOANS (in millions)
2013
$1200
$1150
$1100
$1050
$1000
$950
$900
$850
$800
$750
$700
$650
$600
$ 0
$1,117,409,291
$1,244,819,667
2009
2010
2011
2012
2013
MEMBER DEPOSITS (in millions)
$1200
$1150
$1100
$1050
$1000
$950
$900
$850
$800
$750
$700
$650
$600
$ 0
2009
2010
2011
2012
2013
statements o f operati on
For the years ended December 31, 2013 & 2012
O PER ATIN G IN C OME
Interest on Member Loans
Income from Investments
Member Dividends
Interest on Borrowed Funds
Net Interest Income
Provision for Loan Losses
Other Operating Income
Total Operating Income
O PER ATIN G EX PEN SES
Employee Costs
Facilities Costs
Operational Costs
Marketing and Community Giving
Loan Servicing
Professional/Outside Services
NCUA Assessments
Other Operating Expenses
Total Operating Expenses
Net Operating Income
NON-O PER ATIN G IN COME
NET INCOME
2013
2012
$50,076,231
63,993
(6,929,247)
(244,278 )
42,966,699
(5,035,474 )
14,593,135
52,524,360
$48,746,634
30,848
(7,279,945 )
(29,501 )
41,468,036
(3,887,245 )
13,001,326
50,582,117
22,897,190
3,529,520
9,296,236
1,222,751
2,265,817
1,550,529
818,000
1,149,672
42,729,715
9,794,645
21,790,965
3,170,343
8,431,777
1,515,522
2,051,702
1,260,520
865,506
1,115,781
40,202,116
10,380,001
444,324
234,116
$10,238,969
$10,614,117
DISTRIBUTION OF 2013 INCOME
NCUA
1%
Members
17%
Retained
Earnings
16%
Operating
Expenses
66%
* The accompanying financial statements are unaudited.
HAPO 2013
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Minutes of the 60
TH
Annual Meeting
Ap ril 24 T H , 2 01 3
Mr. Schulz introduced Darrell Stafek.
The 60th Annual Meeting of HAPO Community Credit Union was
called to order by Chairman of the Board, William Tanner at 6:30
p.m., Wednesday, April 24, 2013, in Richland High School’s cafeteria.
There were 52 members present.
Darrell Stafek, Chairman of the Supervisory Committee, introduced
the members of the Supervisory Committee. Mr. Stafek then read
the Supervisory Committee Report and the Nominating Committee
Report. Mr. Tanner read the Statement of Nomination and Declaration of General Consent.
William Tanner asked if there were any corrections to be made to the
minutes of the 59th Annual Meeting. As there were no corrections,
it was moved and seconded to dispense with the reading of the minutes and to accept them as printed. The motion carried.
Board Chairman William Tanner asked if we all knew what HAPO
stands for. He followed by reading the Chairman’s message.
Mr. Schulz, President and CEO of HAPO Community Credit Union,
thanked everyone for attending. Mr. Schulz said he would like to
thank Mr. Tanner, it is his first year as chairman and he is doing a
great job. I would like to say from the heart, that this is the finest
group of directors I have worked with in 10 years.
Mr. Schulz introduced the Board of Directors.
Mr. Schulz gave the President’s Message. Mr. Schulz introduces the
staff and Executives. Mr. Schulz stated we rank 165th nationwide
in credit union size. The organization continues on the right path.
We have over 100,000 members in WA and OR. Mr. Schulz thanked
everyone for coming. We continue to have another great year.
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Mr. Tanner asked if there was any unfinished business or new business
and there was none. Mr. Tanner then turned the floor over to Mr.
Schulz to answer questions from the members. Mr. Schulz introduced
Crystal Contreras and Silvia Idrovo for the drawing of the door prizes.
It was moved and seconded that the meeting be adjourned. The motion carried.
The meeting was adjourned at 7:04 p.m.
William Tanner
Acting Chairman
c h a i rm a n ’ s m e ss a g e
The Annual Membership Meeting is a great time of year. It gives me
another wonderful opportunity to reflect on a host of positive things
that have and are happening at HAPO Community Credit Union. One
thing for sure, it’s never dull and 2013 was no exception.
The members who make up our Board of Directors have the privilege
of working closely each and every month with our top-notched HAPO
Executive Management team. Beyond analyzing management strategies and providing oversight of a multitude of policies, products and
procedures, together in 2013 we began a process of reinforcing our
efforts to sustain our long term health and safety and soundness.
One of the greatest Board and Management challenges is to meet the
right balance of preparedness for possible unforeseen and perhaps
highly unlikely events, often well beyond our control, which may have
an impact on our organization. Several years ago we found ourselves
having to help “bailout” the NCUA for losses sustained in the corporate credit union system and having to help “replenish” the NCUA
Insurance Fund because of certain other credit union failures. Not
any fault of HAPO, nor most all other natural person credit unions but
nonetheless, it had (and still does) have a financial impact on us today.
Fortunately, our prudent management has kept us out of harm’s
way. Still, our management must remain vigilant to weather the next
storm, even if we don’t quite know where, what, when or even if it
might happen. We are working closely with our State and National
Regulators to demonstrate our continued tradition of strength,
soundness and security of our collectively pooled money and that
our management principles are well thought out and tested to satisfy
regulatory compliance. I am confident HAPO will continue to thrive
regardless of the politics of Washington D.C. or Washington State.
Our Top Management also shoulders the responsibility of meeting
the needs of you, our member. This past year HAPO staff has worked
hard to be on top of providing quality service and offer competitive
products that continue to make sense. This year will be no different.
The HAPO financial cooperative serves over 120,000 members. Of
particular interest from both a business necessity as well as a natural
curiosity, just where do our new members come from? It should be of
no surprise, most of our new members come from the families of our
current members. They are referred by family. What better acknowledgment of being affiliated with a great organization than by having
Mom or Dad or brother or Aunt or Uncle give their stamp of approval.
I believe consumers today have more choices than ever, from which
grocery store they shop at to which financial institution they come to.
Often times it is very difficult to find the difference. At HAPO, we believe we have over 325 ways to show you the difference. Once again
on behalf of the entire Board of Directors, I thank those wonderful
325 HAPO staff for all their continued hard work and I thank you, our
members, for your continued support of our great credit union. We
look forward to another prosperous year together.
For the Board of Directors,
William Tanner
Chairman
HAPO 2013
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S u p e rv i sory C omm i tt e e R e p ort
In accordance with the Washington State Credit Union Act and the
rules and regulations of the National Credit Union Administration
(NCUA), the Supervisory Committee is required to “Perform or arrange for a complete annual audit of the credit union and a verification of members’ accounts.” To satisfy these requirements the Supervisory Committee contracted with our certified public accounting firm,
Moss Adams, LLP, to perform an audit of our financial statements.
As a result of the audit, Moss Adams, LLP issued an Independent
Accountants’ Report of the credit union’s financial statements as of
and for the fiscal year ended June 30, 2013. Their report included an
unqualified opinion that those financial statements presented fairly,
in all material respects, the credit union’s financial position as of June
30, 2013 and the results of its operations and its cash flows for the
year then ended, in conformity with accounting principles generally
accepted in the United States of America.
The Supervisory Committee also approves the annual comprehensive
internal audit plan and regularly meets with the credit union’s Vice
President of Internal Audit regarding the results of the activities of the
internal audit department.
The Supervisory Committee is here to serve as the oversight arm of
the credit union. Members may contact the Committee confidentially
or they may directly contact any of the Committee members.
As Chairman of the Supervisory Committee during 2013, I wish to
thank the other Committee members for their many hours of volunteer service during the past year, as well as HAPO’s staff and management for their assistance.
Respectfully submitted,
Darrel Stafek
Chairman
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Pr e s i d e n t ’ s M e ss a g e
We, at HAPO, are always mindful that our member’s choice for financial service providers is ever expanding in today’s world. With modern
technology it is even possible to bank with an institution and rarely, if
ever, even step foot inside an office. Indeed, we have many members
across the state where we do not have a financial center that have
made HAPO their preferred Institution.
Whether or not you visit one of our offices regularly or simply connect
with us electronically, and whether or not you have come to know
some of our excellent staff In person or simply “chatted” with them
over the internet regarding your account, the common denominator
is that we strive to earn your trust and provide you with service you
deserve and have come to expect at HAPO, your credit union.
While choices have expanded for consumers in financial products and
providers, what has also expanded is continued uncertainty in parts
of our economy, which also creates a need for all of us to be able to
trust the place where we bank. I am pleased to report to you that
keeping HAPO strong, safe, and trustworthy for our members remains
the top priority for the Management and Board. During 2013, HAPO
met or exceeded its financial goals not just in growth but also in adding additional reserves of over $10 Million to the credit union’s capital
which is held to keep us strong. HAPO itself also grew substantially
by adding over $120 Million in assets culminating the year with HAPO
being over $1.24 BILLION in total credit union assets.
Among a few of the highlights for the year was the opening of our
new financial center in the Queensgate area of South Richland and a
complete remodel and update of our busiest financial center in Kennewick. It was with great pleasure that we were able to add this new
convenient location and also modernize on our flagship locations all
in one year. Providing HAPO members with quality financial centers is
a priority. At HAPO, we know that, while many of our members take
advantage of Internet and mobile banking, face to face relationships
with members are still an integral part of your member experience.
Successful years at HAPO don’t “just happen”. They are a result of
the hard work of our team of dedicated staff and the leadership of
our Board of Directors. However, they are primarily the result of the
belief, trust, and confidence that our members have placed in us to
continue to deliver the best in financial products and exceptional
rates, but as stated above with the “human touch” service whether in
a branch or online or on your smart-phone.
I want to give all the membership of HAPO my personal assurance
that we never take for granted the trust you have placed in us. We
are also aware that “trust shaken” especially when it comes to your
financial affairs is very hard to repair. That Is why one of the most
cherished values we teach our staff is to “Be In Your Moment”. It is
our desire at HAPO that each and every one of your experiences with
HAPO continues to instill in you the confidence that HAPO Community Credit Union is your credit union and that YOU and your money
matters to us!
The year ahead looks bright for HAPO. The Board and Management
believe that the Tri-City economy will continue to be robust and
HAPO has just the right number of locations in just the right area to
maximize our service to the membership while ensuring the continued
prosperity of the credit union.
As always, I was honored to serve as your President/CEO during
2013 and take such great pride in leading such a fine organization. I
wish to express my personal thanks especially to the membership for
you continued support of HAPO and look forward to many years of
continued prosperity.
Thank you.
Respectfully submitted,
David M. Schulz
President/CEO
HAPO 2013
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O FFI C IA L S
B OARD OF DIREC TO RS
William Tanner – Chairman
William Tyler – Vice-Chairman
Ken Bays – Secretary
William Clarke – Director
Ken Gale – Director
Ken Hohenberg – Director
Rich Cummins – Director
SUPERVISORY CO M M I TTEE
Darrel Stafek – Chairman
David Beach
Bill Phillips
Roy Renner
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N O M INAT ING C O MMI T T EE
Darrel Stafek – Chairman
Leonard Davis
David Beach
E XE CU TI V E S TAFF
David Schulz – President / CEO
Steve Anderson – EVP / COO
John Schnellbach – SVP / CFO
Carolyn O’Niel – SVP / CIO
HAPO 2013
6 1 ST A N N U A L R E P O R T
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Locations in Washington & Oregon
Main Line
509.943.5676
For hours and maps to all our branches, please visit www.hapo.org
Richland - Main Branch
601 Williams Blvd.
Richland, WA 99354
MORT GAGE
DIVISION
509.946.2044
w w w. h a p o . o r g
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Kennewick HAPO BUSINESS COMPLEX
7601 W. Clearwater Ave.
Kennewick, WA 99336
Richland Meadow Springs
631 Gage Blvd.
Richland, WA 99352
Pasco - By the Airport
2701 North 20th Ave.
Pasco, WA 99301
Richland - Queensgate
3034 Duportail St.
Richland, WA 99352
Pasco - west Pasco / rd 68
4902 Road 68
Pasco, WA 99301
Kennewick - Union St.
4 North Union
Kennewick, WA 99336
Yakima - Castlevale
903 Seattle Slew Run
Yakima, WA 98908
Kennewick - SOUTHRIDGE
4851 W. Hildebrand Blvd.
Kennewick, WA 99336
Yakima - TERRACE HEIGHTS
3001 Stonewood Ct.
Yakima, WA 98901
Yakima - Nob Hill
6401 W. Nob Hill Blvd.
Yakima, WA 98908
SUNNYSIDE - Downtown
322 South 6th Street
Sunnyside, WA 98944
Hermiston
1905 N. 1st Street
Hermiston, OR 97838
WALLA WALLA COLLEGE PLACE
2376 Taumarson Rd.
Walla Walla, WA 99324