and our - Chartway Federal Credit Union

ALL GREAT COMPANIES ARE DEFINED BY THEIR PEOPLE.
www.chartway.com
(757) 552-1000 | (800) 678-8765
This credit union is federally insured by the National Credit Union Administration.
Membership eligibility subject to verification.
FO R
A N N U A L
A L L
R E P O R T
2 0 1 5
TOGETHER,
WE ARE PART OF
SOMETHING
EXTRAORDINARY,
AND OUR
“1-FOR-ALL”
PHILOSOPHY
CONTINUES
TO FUEL OUR
PURPOSE AND OUR
PERFORMANCE
TABLE OF
CONTENTS
2
Message from
the Chairman
4
Message from
the President & CEO
8
Treasurer’s Report
8
Supervisory Committee’s
Report
9
Consolidated Statements
of Financial Condition
10
Leadership Team
11
Board of Directors
MESSAGE FROM THE CHAIRMAN
2015 was a significant year for our family of credit unions.
In the fall, we had the opportunity to say thank you and farewell to our long-standing
CEO, Ron Burniske. We are grateful for everything he did for our organization and
its membership throughout his 31 years of service. His leadership helped build an
organization that is financially strong and strategically well positioned to continue
serving members for generations to come.
Wayne E. Foshay
Chairman
Shortly after Ron’s retirement, the Board and I worked with an executive search firm
to interview top-tier CEO candidates. Following an extensive assessment of internal
and external applicants, the Board unanimously agreed that there was no better
person to lead the Chartway family of credit unions than our President, Brian Schools.
Brian was the ideal choice because he understands the true value of our credit
union, our members, and our employees. After joining our organization in 2008
and following leadership roles at several high performance companies including
JP Morgan Chase, Capital One, and Crestar Financial (now SunTrust), Brian
quickly became known as a highly capable leader who had the experience, the
determination, and the drive to position our credit union for the opportunities and
challenges ahead.
From his dedicated efforts of putting our people first, to building the blueprint for
improving our organization through a well-defined strategic plan, and generating
greater efficiencies by improving our operating platforms, Brian has excelled in
every area. His energetic personality, love of people, and total dedication to our
credit union and our members are exactly what we need as we enter this next
chapter of innovation and growth.
Our 2015 Annual Report will outline how we plan to do precisely that. You will learn
about our strong financial performance and our core areas of focus for the future
– all of which are rooted in enriching the relationships we have with those we are
fortunate to serve. From driving the next wave of innovations that support a flexible,
digital lifestyle, to maintaining our position as market leaders when it comes to
providing the lowest loan rates and highest saving rates, and keeping our fees at or
below market, we are continuing to implement solutions that deliver tremendous
value to our members and our communities.
2
None of this could happen without the support and financial investment of you and
our 180,000 members. Our shared credit union is just that – a financial cooperative
whereby we all share in our growth, our success, and our achievements. Members
are our lifeblood, and we come to work each day knowing that there are many
choices. So, we dedicate our energy to making this the best and most value-driven
financial institution available.
I also want to take a moment to thank our Board, Volunteers, and employees for
everything they do to allow our organization to benefit from shared experiences and
shared value. As our company has grown in size and complexity – at times, shifting
strategies during times of economic change and making necessary infrastructure
modifications to meet the evolving needs of our members – they have worked
deliberately to keep our culture top of mind. There is a true sense of community and
a spirit of caring that is unique to our family of credit unions. Their commitment to
our culture – living our values, doing the right thing for our members, and making
a difference through charitable contributions and service – are the cornerstones
of our success.
Altogether, the Board and I could not be prouder of what our organization has
in place, and we look forward to the future with excitement. We’ve never been
financially stronger or better prepared to serve our members and our communities.
Sincerely,
Wayne E. Foshay
Chairman
3
MESSAGE FROM THE PRESIDENT AND CEO
Each morning, more than 500 talented people all across the country walk through
our doors – ready and eager to serve you. I feel extraordinarily privileged to have
served alongside these employees throughout the past seven years, and to have
been chosen in September to lead our organization as the new President and Chief
Executive Officer.
While I have been serving as the organization’s President since January 2015 and
have been in the financial services industry for more than 20 years, it is an honor to
now have the opportunity to work directly with our talented leadership team and all
of you - our loyal members - to build on our rock solid foundation.
Brian T. Schools
President &
Chief Executive Officer
Our ability to do precisely that begins with our people. That’s why, during my first
months as President and Chief Executive Officer, I visited our branch locations across
the country. I could not be more impressed by the dedication of our employees and all
they do to ensure the loyalty and satisfaction of our thriving membership. Together,
this community of people is what fuels our purpose and ultimately, our performance
because we know that our success is always in direct proportion to yours.
And so, when we thought about what to put on the cover of our Annual Report this
year, only one thing came to mind: our firm focus on building relationships. All
great companies are defined by their people and this certainly holds true within
our walls. Together, we are part of something extraordinary, and we are honored
that our “1-for-all” philosophy allowed us to achieve another year of record results.
SATISFACTION. At our organization, we are more focused than ever on putting
our members first in everything that we do. With a goal to deliver a consistent, engaging
experience with us – whether in a branch, over-the-phone, online, through a mobile
device, or via Facebook, Twitter, Instagram, LinkedIn, Google+ or YouTube – our member
survey scores revealed that we continued to move the marker on satisfaction. Overall,
member satisfaction scores increased from 90.0% to 91.7% in 2015; an improvement of
1.8% over the 12-month period.
GROWTH. We experienced impressive growth in 2015. With assets exceeding $2 billion,
our total deposits grew to $1.912 billion, reflecting a 7.4% growth over the prior year
Additionally, net loans to members increased to $1.613 billion, representing a growth
of 8.4%. Our notable financial performance is the direct result of our ability to meet
members’ needs and execute well on our strategic opportunities.
FINANCIAL STRENGTH. Financially, we saw measureable improvement. We had net
income of $13.699 million. This added to our strong financial position, representing
a capital ratio of 8.25%, well above regulatory minimum levels. We are proud of our
financial growth because the results reflect our strong fundamentals and the success
of our differentiated, member-focused business model. More importantly, solid
financial performance allows us to do what we do best: pass our savings on to members
in the form of lower loan rates and higher savings rates.
Additionally, to support our growing business needs and the demand for our quality
financial products and services, in 2015, we began relocating our corporate and
support operations. Our new location will allow us to better serve you and to
facilitate our future needs, providing suitable space for employees and encouraging
collaboration-based interactions. We expect to transition all corporate departments
to the new space later this year, and have plans to relocate our Newtown branch to a
nearby building we are in the process of constructing.
4
Other planned service enhancements include modernizing our member access and
digital experience, further development of business in our core markets of Virginia,
Texas, and Utah, and targeted efforts to progress and expand our core products.
Additionally, we will be investing in streamlining and simplifying key areas of our
operations to make our service delivery even more effective, efficient, and progressive.
Regarding other future activities, member security remains a top priority. As
part of our ongoing commitment to the protection and integrity of our member
transactions, we look forward to migrating all credit and debit cards to new chip
card technology this year. We will also be launching ApplePay, Android Pay, and
Samsung Pay to allow you – our members - to make purchases with a single touch,
making the transaction smoother and more secure.
To enable us to better measure and manage your experience with us through both
traditional touchpoints and new, modern tools like those mentioned above, be on the
lookout for our new member satisfaction survey. In 2016, we will be introducing a loyaltybased approach that will give you the opportunity to provide feedback in real-time, to
assess all our channels, and to share your excellent experiences on social media.
Our dedication to making a difference extends well beyond traditional banking. Why?
Because strengthening our communities is part of our culture. We are passionate
about making a positive impact in the communities we serve through financial
scholarships, community event sponsorship, and financial support to charitable
organizations. In 2015, our philanthropic arm – the We Promise Foundation – raised
more than $945,000, enabling its Board to approve grants to non-profit organizations
that share our enthusiasm for making dreams come true for children battling lifethreatening illnesses. Our employee-led CARE team also supported nearly a dozen
fundraisers to support local and national programs.
From an organizational perspective, I am appreciative to our Board for entrusting
me as the member’s President & CEO and look forward to working collaboratively
with them in service to you. Likewise, our leadership team brings a wealth of
experience and skills that ensure that we are always working ahead of the industry,
emerging technologies, and our members.
Altogether, I would like you to know how much we value your business, your loyalty,
and your feedback. We are more committed than ever to putting your experience at
the forefront of everything we do and to finding ways to deliver value while providing
a superior level of service. This organization has a rich history of success and
leadership, and I am excited to work alongside you to move our organization forward.
Best,
Brian T. Schools
President & Chief Executive Officer
5
We are passionate about making a positive impact in the communities we
serve because helping others is core to our culture. In fact, in 2015, our We
Promise Foundation raised more than $945,000 to make dreams come true for
children battling life-threatening illnesses. Our employee-led CARE team also
supported nearly a dozen fundraisers to support local and national programs.
Brian T. Schools
President & Chief Executive Officer
TREASURER’S REPORT
I am honored to share with you that 2015 was a breakthrough year for our family of
credit unions. As a result of our commitment to member service and our efforts to
modernize and simplify our business, we achieved record financial growth. Improved
earnings and a growth in our capital base allowed us to pass our gains on to you by
way of lower loan rates and higher savings rates.
Our assets, as of September 30, 2015, were $2,050,003,368. This represents growth
in assets of $136,432,935, or 7.1%. Share deposits grew a total of $171,435,317 for
a growth of 10.1% during the year. Additionally, as of September 30, 2015, we were
pleased to have net loans to members in the amount of $1,542,192,042.
As further evidence of our company’s financial stability, I am proud to report that our
gross income for the 12-month period as reported by the independent accounting
firm of Clifton Larson Allen LLP, Certified Public Accountants totaled $88,143,644 and
was distributed as follows:
 $14,260,705, or 16.2% of gross income in dividends to our members
 $11,841,725, or 13.4%, in reserves and retained earnings
 $62,041,214, or 70.4% to offset credit union operating expenses in providing products and services to our members
We continue to benefit from our commitment to sensible financial management
and a disciplined compliance program, which resulted in a healthy level of reserves
and undivided earnings. As of September 30, 2015, our retained earnings and equity
totaled $169,153,136, representing a capital ratio of 8.25%.
Altogether, we are proud of our growth and look forward to continuing to invest in
initiatives that help us facilitate the financial wellbeing of our members and our
communities.
Thank you for your continued support of our family of credit unions. At $2 billion and
180,000 members strong, we have a credit union that we can truly be proud of.
Melvin S. Mizelle
Treasurer, Board of Directors
SUPERVISORY
COMMITTEE’S
REPORT
Gary M. Abrams
Supervisory Committee Chair
8
The Federal Credit Union Act requires the Supervisory Committee to evaluate the
adequacy and effectiveness of the internal security controls put in place by Chartway
Federal Credit Union.
Our primary goal is to protect the interest of our members; therefore, we contracted
an independent certified public auditing firm to examine the year—ending September
30, 2015. Following the examination and audit, we received an opinion letter
confirming that Chartway’s financial statements conform to generally accepted
accounting principles.
2015 Supervisory Committee: Gary Abrams, Chairman; Gerald Hensley, Vice
Chairman; Scott Sumpter, Secretary; Eleanor Willhoite, Member; and Nancy
McMahon, Member. The Committee, along with Supervisory team members Cindy
Nyberg and Tiffany Harrison, extend their appreciation to the credit union members,
Board of Directors, management, and staff for their support.
CHARTWAY FEDERAL CREDIT UNION AND ITS DIVISIONS
Consolidated Statements of Financial Condition
ASSETS
Cash and Cash Equivalents
Securities - Available-for-Sale
Securities - Held-to-Maturity
Other Investments
Loans Held-for-Sale
Loans, Net
Accrued Interest Receivable
Foreclosed Assets
Premises and Equipment, Net
NCUSIF Deposit
Goodwill and Other Intangible Assets
Other Assets
SEPTEMBER 2014 SEPTEMBER 2015
$105,402,835 $147,742,618
4,617,863 371
311,674,887 179,402,873
6,510,751 3,516,381
204,725 471,200
1,310,342,980 1,542,192,042
6,243,582 6,480,451
3,223,006 1,551,259
40,089,807 37,927,200
17,662,164 17,491,307
72,231,430 71,936,340
35,366,403 41,291,326
______________ ______________
Total Assets
1,913,570,433 2,050,003,368
LIABILITIES AND MEMBERS’ EQUITY
Liabilities
Members’ Share and Savings Accounts
1,693,497,749 1,864,933,066
Borrowed Funds
45,000,000 Accrued Expenses and Other Liabilities
17,729,148 15,917,166
Total Liabilities
______________ ______________
1,756,226,897 1,880,850,232
Members’ equity
Regular Reserves
18,529,735
18,529,735
Undivided Earnings
138,781,678
150,623,403
Accumulated Other Comprehensive Income (Loss)
32,123
(2)
Total Members’ Equity
Total Liabilities and Members’ Equity
______________ ______________
157,343,536
169,153,136
______________ ______________
$1,913,570,433 $2,050,003,368
9
LEADERSHIP TEAM
Brian T. Schools
President &
Chief Executive Officer
Paul V. Annunziata
Corporate Financial Officer
Kimberly J. Little
Corporate Retail Officer
10
John W. Blum
Corporate Operations Officer
Phillip A. Richards
Corporate Planning &
Brand Officer
Rene G. Bollinger
Corporate Human
Resources Officer
Donald D. Yang
Corporate Lending Officer
BOARD OF DIRECTORS
Top Row (L to R):
Robert N. Cook, Director; George E. Sauer, 2nd Vice Chairman; Robert O. Holmes, 1st Vice Chairman; Richard R. Ahlborn, Director; Dallas L. England, Director
Bottom Row (L to R):
E. L. Gull, Jr., Secretary; Wayne E. Foshay, Chairman; Judith P. Sparrow, Director; Melvin S. Mizelle, Treasurer
11
TOGETHER,
WE ARE PART OF
SOMETHING
EXTRAORDINARY,
AND OUR
“1-FOR-ALL”
PHILOSOPHY
CONTINUES
TO FUEL OUR
PURPOSE AND OUR
PERFORMANCE