2013 NGFCU Abbreviated Annual Report

B O A R D O F D IRE CTORS
Steve Considine, Chairman
Mark Rabinowitz, 1st Vice Chairman
Patrick Creighton, 2nd Vice Chairman
Stan Swenson, Secretary/Treasurer
George Bardizbanian
Bernie Slotnick
Kathi Harper
Dick Underhill
Phil Harrott
Georgetta Wolff
Nils Johnson
Eric Scholten, Volunteer at Large
Hugh Jones
Betty Burtis, Emeritus
Mitch Mroz
Dick Lindsey, Emeritus
SUPERVISORY COMMITTEE
Wayne Watanabe, Chairman
Matthew Barrett, Secretary
Phil Harrott
Ted Hruska
Elizabeth Romo
FLIGHT PLAN FINANCIAL SERVICES, INC.
Officers and Board of Directors
States w/Branches
States w/ATMs
Annapolis, Annapolis Junction,
Glen Burnie, Linthicum, &
Linthicum Hts, MD
States w/Site Visits
Location w/Branch & ATM
Location w/ATM & visited
Sites visited annually
Omaha, NE
Salt Lake City &
Clearfield, UT
Colorado Springs,
Boulder, Aurora, CO
Sykesville, MD
Rolling Meadows, IL
Buffalo, NY
Topeka &
Leavenworth, KS
McLean &
Herndon, VA
Cincinnati, OH
Sacramento, CA
San Jose, Sunnyvale,
& Livermore, CA
Chantilly, VA
Falls Church, VA
Charlottesville,
Richmond, &
Chester, VA
Las Vegas, NV
Ft. Irwin, CA
Santa Barbara, CA
Woodland Hills, CA
Atlanta, GA
Warner Robbins, GA
St. Augustine, FL
Apopka &
Orlando, FL
Rancho Bernardo &
Kearney Mesa, CA
Palmdale, CA
Sierra Vista, AZ
Azusa, CA
El Segundo, Redondo Beach,
Hawthorne, & Carson, CA
Huntsville, AL
Irving, TX
Lake Charles, LA
Oklahoma City, OK
Melbourne, FL
Box 47009
B R A N C H & AT M L O C AT I O N S
Gardena, CA 90247-6809
Betty Burtis, Chairman
Jim Barnfather, President
George Bardizbanian
NORTHROP GRUMMAN FEDERAL CREDIT UNION
VOLUNTEERS
& OFFICERS
ANNUAL REPORT 2013
Assets in millions
850.7
879.3
914.4
906.9
2012
2013
771.4
2009
2010
2011
2013 Assets..........$906,880,597
Member Savings in millions
750.5
767.9
2010
2011
798.1
821.0
2012
2013
672.1
This abbreviated annual report is intended
to provide summary information pertaining
to the performance of Northrop Grumman
Federal Credit Union. To view the complete
independent auditor’s report prepared by
Turner, Warren, Hwang & Conrad Certified
Public Accountants, visit www.ngfcu.us or
call 800.633.2848 to request a copy.
2009
2013 Savings........$820,970,893
Loans to Members
in millions
427.2
423
424.5
431.4
2009
2010
2011
2012
397.3
2013
2013 Loans...........$397,281,514
REPORT TO MEMBERS
2013 was definitely a rebound year, for both the U.S.
economy and Northrop Grumman Federal Credit Union.
Almost all major U.S. economic indicators improved.
Employment grew, adding 2.7 million non-farm jobs and
unemployment rates declined. Wages and disposable
income were both up. Not surprisingly, vehicle sales and
overall consumer consumption were also up. New vehicle
sales reached 15.5 million units, up almost 8% from 2012.
Home sales were the highest since 2006. At the same time,
overall inflation and interest rates remained either at, or very
near, record low levels. Economists are generally optimistic
that these favorable trends will continue into 2014.
For the Credit Union, 2013 saw a change in focus towards
more consumer lending. This is clearly seen in the loans
granted data. There was an impressive gain of $26.5
million in consumer loans granted compared to 2012. The
total loans granted balance of $167.7 million was the best
ever recorded by NGFCU. Not surprisingly, but equally
impressive is the fact the loans granted per member ratio
also reached record levels for the Credit Union. Simply put,
NGFCU is granting more loans to more members than
ever before.
Looking closer at the key consumer loan balances shows
some very impressive gains. MasterCard balances were
up 59%, reaching a record high of $36.1 million. These
gains were undoubtedly influenced by the Credit Union’s
innovative SmartTransfersm program, which offers a 4.99%
rate fixed for as long as it takes to pay off third party
balances transferred to NGFCU’s MasterCard. This is a high
value member program that continues to drive balances into
the Credit Union. As a point of reference, revolving credit
balances in the entire U.S. grew only a little over 1% in 2013.
Without question, SmartTransfer is increasing NGFCU’s
market share for credit cards.
There was a sharp rebound of NGFCU new vehicle loan
balances, which grew 48% in 2013. Used vehicle balances
grew at almost twice the rate seen in 2012. At $61.5 million,
NGFCU’s used vehicle loan portfolio reached record levels.
Since loan offers tend to attract new members, we also saw
an increase in membership that was at the highest rate
since 2004.
CONSOLIDATED STATEMENT OF
FINANCIAL CONDITION
CONSOLIDATED STATEMENT OF INCOME
December 31, 2013
INTEREST INCOME
ASSETS
Interest on loans to members............................ $20,076,524
On the deposit side of the ledger, regular share balances
grew by 7.9%, share draft balances grew by 5.8% and
money market account balances grew by 3.4%. Total
deposit balances grew by 2.9% overall, to $821.1 million.
NGFCU’s average fees paid per member remained about
half that of the 2013 U.S. credit union average.
Loans to members............................................... $397,281,514
Email marketing was used extensively in 2013. This
communication channel has the dual benefits of lower cost
and precise response measuring. Also introduced was the
NGFCU4U.com promotional microsite. This mini website
provides the benefit of focusing on current promotional
offers to members and prospective members.
Net interest income after provision (credit)
for loan losses.................................................... $24,027,649
LIABILITIES AND MEMBERS’ EQUITY
NON-INTEREST INCOME
Members’ shares.................................................. $820,970,893
Fee income........................................................ $2,174,402
Borrowed funds................................................... $—
Other-than-temporary impairment losses ......... $(112,303)
Accrued expenses and other liabilities................ $5,969,026
Less portion of other-than-temporary
impairment losses recognized in other
comprehensive income.............................. $6,377
Net impairment losses
recognized in earnings............................... $(105,926)
Net realized gain (loss) on sale of
securities available for sale........................ $(651,551)
Loss on sale of loans.................................. $(3,073,221)
We thank our members for their continued support. It is
this very support that makes the not-for-profit financial
cooperative the best form of retail financial service. NGFCU
is focused on giving members the highest return for their
participation. In short, we intend to be a superior choice for
our members.
For the year ended December 31, 2013
Cash and cash equivalents................................... $
118,307,342
Securities available-for-sale.................................. $
367,931,914
Other investments............................................... $
250,000
Accrued interest receivable................................. $2,383,055
Property and equipment...................................... $6,594,464
NCUSIF deposit................................................... $7,764,285
Other assets......................................................... $ Total Assets
Total Liabilities
6,368,023
$ 906,880,597
$ 826,939,919
Members’ equity.................................................. $79,940,678
Total Liabilities and Equity
$ 906,880,597
Interest on investments and
cash equivalents................................................ $8,999,583
Total Interest Income $
29,076,107
INTEREST EXPENSE
Dividends on members’ shares.......................... $5,411,583
Interest on borrowed funds................................ $123,889
Total Interest Expense $
5,535,472
Net interest income........................................... $23,540,635
Provision (credit) for loan losses......................... $(487,014)
Other non-interest income................................. $2,699,591
Total Non-Interest Income $ 1,043,295
For the Board of Directors,
NON-INTEREST EXPENSE
Steve Considine
Chairman
Compensation and benefits............................... $9,200,792
Stan Swenson
Secretary/Treasurer
Temporary corporate credit union stabilization
fund assessment................................................ $621,143
Operations......................................................... $8,761,746
Occupancy......................................................... $1,439,035
NET INCOME
Total Non-Interest Expense $ 20,022,716
$
5,048,228