LCFCU Annual Report - Library of Congress Federal Credit Union

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2014 annual report
Rules
of order
•O
nly members in good
standing may speak in
debate without permission
of the chair.
• A member who would like
to speak may do so from
the nearest microphone.
He or she must address
the chair, wait to be
recognized and give his or
her name.
welcome to
The Annual Meeting
April 8, 2015
• Call to Order
• Minutes of the
2014 Annual Meeting
• Chairman
• Vice Chairman
• Treasurer
• Secretary
• Supervisory Committee
• President/CEO
• Unfinished Business
• New Business
• Election Announcement
• Adjournment
prize drawings
throughout the meeting.
• All motions must be
presented in writing
before a question is voted
on.
• Debate shall be limited to
two minutes per speaker.
Overall debate on any one
subject shall be limited to
15 minutes, provided both
sides have the opportunity
to be represented.
• No member may speak
more than once until all
who wish to speak have
been heard, nor more
than twice without the
unanimous consent of the
assembly.
• Members who wish to
close debate shall move
the Previous Question,
which must be seconded
and immediately put to a
vote. Debate can only be
closed by a vote of twothirds of those present and
voting. Voting on issues
shall be done by a show
of hands.
• The rules can be amended,
rescinded or suspended
by a two-thirds vote of
the members present.
chairman’s report
The Library of Congress Federal Credit Union opened its doors in 1935,
just a little over 14 months after the Federal Credit Union Act was signed
into law. As chairman of your volunteer board of directors, it gives me
great pleasure to join you in celebrating 80 years of the rich tradition of
service enjoyed by the Library of Congress FCU. I am proud to follow
a distinguished line of outstanding Board chairs who have dedicated
themselves to ensure that you, the members and potential members
of the Library of Congress Federal Credit Union are provided with the
financial products and services that enable you to achieve and maintain
financial stability and meet the financial needs of your families. Just
as I am today, those distinguished leaders were assisted by equally
dedicated and talented Board and committee members who focused
on providing policy guidance and oversight to ensure the safety and
soundness of your credit union.
Library of Congress FCU continues to rank as a high performing
credit union locally and nationally in terms of our return to
members. Earnings of the credit union that are in excess of
operating expenses are returned to members through lower
fees and better loan, savings and investment rates. We have
remained stable and strong in spite of the lending free fall
the US economy experienced from 2008 to 2011. Our overall
annual results continue to improve along with the slowly
improving economy.
In 2014, we benefitted from improved economic stability for
federal workers without the challenges of the Sequester and
the government shutdown that occurred in 2013. Job creation
improved in the U.S. in 2014. However, the world economy continued
to face challenges from a slowdown in the economies of China and in
other countries, most notably Greece.
As the housing and mortgage markets struggled to gain momentum
in spite of remarkably low mortgage rates, our real estate portfolio
remained secure. In spite of these challenges Library of Congress FCU
maintained high quality assets that helped us remain financially sound.
Our return on assets remained impressively strong. The improvement in
overall performance each year since 2010 demonstrates that our focus
on service delivery, maintaining low delinquency rates and promoting
loans is driving our positive performance.
I want to thank you for the loyalty and confidence you have shown in
the Library of Congress Federal Credit Union. Our active and involved
members make the difference in our ability to remain strong and stable
during challenging years. We remain committed to serving our core
field of membership, the employees of the Library of Congress, related
companies and their immediate families.
Rosalyn L. Coates, Chairman
2014 annual report • LCFCU.org • 202.707.5852
1
supervisory
committee’sreport
treasurer’sreport
The Supervisory Committee operates as the members’
advocate with our Board of Directors. Supervisory Committee
members appoint an independent audit firm to conduct a
financial audit and to complete member account verifications.
The Supervisory Committee also is responsible for ensuring
that LCFCU follows approved policies of both our Board of
Directors and our federal regulatory agency, the National
Credit Union Administration (NCUA).
The Library of Congress Federal Credit Union remained
strong and stable in 2014 in an economy that continues to
slowly improve. Our capital-to-assets ratio grew to 13.66%
in 2014 from 12.70% in 2013. While assets declined slightly
to $219.0 million from $220.0 million in 2013, our focus on
maintaining our strong financial performance is partnered with
our commitment to exceptional service delivery.
Although dividend rates were down for all financial institutions
during 2014, our rates were competitive with most of our
rates exceeding or at least equaling our competitors. Our
dividend payment for all savings declined due to lower rates.
Our net interest income increased slightly to $5.6 million from
$5.4 million. The loan to share ratio was 67.65% in 2014, an
increase from the 2013 ratio of 63.77%. Library of Congress
FCU continues to perform well in our peer group.
Committee members are available to hear individual member
concerns and bring such concerns to the board. Only four
member concerns were registered in 2014.
The CPA firm of CliftonLarsonAllen LLP conducted an
independent financial audit of our performance during
2014. LCFCU once again received a clean opinion on its
financial statements. Preliminary findings indicate that LCFCU
is a dynamic, well-run organization that sustains a tested
financial condition of safety and soundness, achieved during
challenging financial economic times. The federal credit union
savings insurance on LCFCU accounts continues to provide
$250,000 in coverage, with IRA accounts also protected up to
$250,000. (Traditional and Roth IRA balances are combined
for insurance purposes.)
The credit union anticipated increases in delinquencies after
the economic downturn in 2008. We have maintained our
focus in this area resulting in a 2014 delinquency rate of 0.81%,
the same rate experienced in 2013.
Our loan activity remained strong relative to our industry. In
2014 we processed 2,582 credit applications, compared to
2,601 in 2013. We approved 2,134, or 82.64% of applications.
Total dollar volume in loans increased from 40.7 million in
2013 to 43.0 million in 2014. Secured auto loans accounted for
29.75%, up from 26.81% of all new loan dollars in 2013.
Our Supervisory Committee is dedicated
to serving as your neutral agent. The
Supervisory Committee, Board of
Directors and LCFCU management
and staff remain committed to offering
our members stability in your personal
finances. We thank each of our members
for your continued support.
Real estate loans completed in 2014 totaled more than $15.6
million, including $6.5 million in home equity
offerings. Real estate loans stand at 42.35%
of all loan approvals. These loans have a
significant impact on maintaining a desirable
loan-to-share ratio.
2014 was a year when Library of Congress FCU
continued to perform above peers in a period
of slow economic recovery. Maintaining our
strong performance positions Library of
Congress FCU to help our members achieve
financial success.
Carolyn Turner-Dixon, Chairman
As we enter into our 80th year of operation,
we look forward to continuing that success for you, our
members.
Reginald Massie, Treasurer
2
2014 annual report
Loans. Deposits. Insurance. Investments.
3
financial statements
Statements of Financial Condition
2014
Years Ended December 31, 2014 and 2013
2013
$ 126,053,454 $120,272,029
(737,558)
(830,261)
3,076,341
8,915,049
2,401,471 2,738,992
73,246,735 71,825,832
3,737,044 6,403,696
488,888 460,961
468,765 480,239
1,821,131 1,827,747
8,509,813 7,907,121
$ 219,066,085 $ 220,001,404
2013
Loans to members
$ 5,746,155 $ 5,694,281
Securities 662,297684,477
Total interest income
$ 6,408,452 $6,378,758
INTEREST EXPENSE
Members’ share and savings accounts $ 789,493
$ 980,872
Borrowed funds
16,014
18,885
Total interest expense
$ $805,507 $999,757
Net interest income
$ 5,602,945
$ 5,379,001
Provision for loan losses 571,956 (159,513)
Net income after Provision for loan losses
$ 5,030,989
$5,538,514
NON-INTEREST INCOME
$1,825,874
LIABILITIES AND EQUITY
Fees, charges and other income
Member’s share and savings accounts
$ 186,322,352 $ 188,589,989
Borrowings: FHLB Line-of-Credit
1,357,143 1,642,857
Accrued expenses and other liabilities
1,452,740
1,831,801
Total Liabilities $ 189,132,234 $ 192,064,647
Members’ equity, substantially restricted
29,933,850
27,936,757
NON-INTEREST EXPENSE
$1,913,937
NET CAPITAl-TO-ASSETS RATIO
13.66% 12.70%
General and Administrative:
Compensation and benefits
$ 2,266,869
$ 2,298,640
Other G&A 2,592,900 2,630,854
Total non-interest expense
$4,859,769
$4,929,494
NCUSIF Stabilization Loss
0
0
NCUSIF Recovery
0
0
Net non-interest expense
$ 4,859,769
$ 4,929,494
LOAN-TO-SHARE RATIO
67.65% 63.77%
NET INCOME
Total Liabilities & Members’ Equity $ 219,066,085 $ 220,001,404
4
2014
Statements of Income
INTEREST INCOME
assets
Loans to members
Allowance for loan losses
Cash and cash equivalents
Overnight Federal Funds
Investment securities
Mortgage-backed/CMO securities
Accrued interest receivable
Property and equipment (net)
NCUSIF deposit
Other assets
Total Assets
(2014 unaudited)
2014 annual report
Loans. Deposits. Insurance. Investments.
$ 1,997,094
$2,522,957
5
financial statements history
2014
Statements of Financial Condition
2010
— the past 24 years
2005
2000
1995
1990
assets
Loans to members
$ 126,053,454
$124,518,311
$84,495,758
$43,624,088
$25,873,800
$24,690,069
Allowance for loan losses
(737,558)
(937,891)
(165,959)
(200,991)
(164,297)
(9,991)
Cash and cash equivalents
3,076,341
7,456,921
2,377,464
498,163
825,938
6,147,031
Overnight Federal Funds
2,401,471
1,310,680 1,046,963
4,367,170
947,200
853,783
Investment securities
73,246,73557,184,09137,410,69722,393,54214,922,512 163,945
Mortgage-backed/CMO securities 3,737,044
5,438,274
815,363
1,483,392
5,413,756 0
Accrued interest receivable
488,888
11,997
8,417
6,617
0
0
Property and equipment (net)
468,765
835,096
439,568
314,044
494,302
57,602
NCUSIF deposit
1,821,131
1,711,007901,476573,765408,448257,773
Other assets
8,509,813
5,727,053
1,588,533
483,650
299,283
234,767
Total Assets
$
219,066,085$
203,255,538$
128,918,279 $
73,543,439$
49,020,944$
32,394,979
LIABILITIES AND EQUITY
Member’s share and savings accounts
$ 186,322,352$
178,869,214$
108,320,289 $
63,319,016$
42,713,966$
29,119,368
Borrowings: FHLB Line-of-Credit
1,357,143 0
4,000,000 0 0 0
Accrued expenses and other liabilities
1,452,740
1,639,200
857,385
635,592
271,174
553,684
Total Liabilities
$ 189,132,234$
180,508,413$
113,177,674 $
63,954,609$
42,985,140$
29,673,052
Members’ equity, substantially restricted
29,933,850
22,747,124
15,740,605
9,588,831
6,035,804
2,721,927
Total Liabilities & Members’ Equity $ 219,066,085$
203,255,538$
128,918,279 $
73,543,439$
49,020,944$
32,394,979
NET CAPITAl-TO-ASSETS RATIO 13.66%11.19%12.21%13.04%12.31% 8.40%
LOAN-TO-SHARE RATIO
67.65%69.61%78.01%68.90%60.57%84.79%
2014
Statements of Income
2010
2005
2000
1995
1990
INTEREST INCOME
Loans to members
$5,746,155
$7,172,749
$4,305,864
$3,167,220
$ 2,098,172
$2,660,558
Securities 662,2971,199,9211,546,4581,718,1731,290,326 530,479
Total interest income
$6,408,452
$8,372,670
$5,852,322
$4,885,393
$ 3,388,498
$3,191,037
INTEREST EXPENSE
Members’ share and savings accounts $
789,493
$ 2,528,187
$ 1,991,220
$ 2,505,963
$
1,665,534
$ 1,979,839
Borrowed funds
16,014 0
86,785 0 181 147
Total interest expense
$ $805,507
$2,528,187
$2,078,005
$2,505,963
$ 1,665,715
$1,979,986
Net interest income
$5,602,945
$5,844,483
$3,774,317
$2,379,430
$ 1,722,783
$1,211,051
Provision for loan losses
571,956
1,069,327
88,234
35,222
26,405
42,968
Net income after Provision for loan losses $5,030,989
$4,775,156
$3,686,083
$2,344,208 $ 1,696,378
$1,168,083
NON-INTEREST INCOME
Fees, charges and other income
$1,825,874
$2,130,305
$1,387,096
$ 410,991
$ 286,095
$
58,912
NON-INTEREST EXPENSE
General and Administrative:
Compensation and benefits
$2,266,869
$2,484,092
$1,669,917
$ 928,883
$ 554,115
$ 420,903
Other G&A
2,592,900
2,705,353
1,764,562
1,044,505
623,394
516,205
Total non-interest expense
$4,859,769
$5,189,445
$3,434,479
$1,973,388
$ 1,177,509
$ 937,108
NCUSIF Stabilization Loss0
434,9790000
NCUSIF Recovery0 00000
Net non-interest expense
$4,859,769
$5,624,424
$3,434,479
$1,973,388
$ 1,177,509
$ 937,108
NET INCOME
6
$
1,997,094$
1,281,037$
1,638,700 $
781,811$
804,964$
289,887
2014 annual report
Loans. Deposits. Insurance. Investments.
7
board of directors
Rosalyn Coates, Chairman
Eugene Boyd, Vice Chairman
Reginald Massie, Treasurer
Edward Knight, Secretary
Robert DeMariano Director
Diane Dixson
Director
John Husovsky Director
Bruce Mulock
Director
Laura Wong
Director
supervisory committee
Carolyn Turner-Dixon, Chairman
Bruce E. Foote, Vice Chairman
Donna Brown, Member
Kimberly Dobbs, Member
Anne Peele, Member
Management team
Marsha L. King, President & CEO
Gary Mandelkorn, Vice President / Operations
Debbie Morris, Vice President / Lending
Karen Moses, Vice President / Finance
Gail Cohen, Madison Office Manager
our STaff
Annice Aldridge
Janet Benjamin
Debbie Blankenship
Deborah Boda
Gregory Edwards
Karla Enriquez
Chiquetta Franks
India Gaskins
Shannon Jones
Kia McCormick
Bonnie Moore
8
Liliam Ortega
Lawrence Philipp, Jr.
Magda Reding
Pauline Rueda
Marie Saint-Aubin
Arturo Silva
Robert Simpson
Melvin Smith
Alma Walton
Mark Washington
Stan Zdun
2014 annual report