2012 Annual Report - Firstmark Credit Union

BUILDING STRONG
RELATIONSHIPS
IS OUR BOTTOM LINE
2012 Annual Report | Firstmark Credit Union
STRONG FOUNDATION
Firstmark Credit Union is a not-for-profit financial cooperative that provides a full line of
affordable financial services to over 88,000 member-owners. Membership is open to
people and their families who live, work, attend school, or worship in the communities we
serve. Online or in-person, we provide a rich array of web-based services, as well as 11
branches in and around San Antonio to meet the unique needs of each of our members.
Ownership in the Credit Union translates into real benefits for our member-owners, who
are at the forefront of all the decisions we make. Our philosophy of “Great with people.
Great with money.” speaks to our commitment to each of our member-owners, while the
industry philosophy of “people helping people” speaks to our mission of service to them
and to the community.
Based on a business model of pooling deposits to make loans and provide financial
services at reasonable cost, financial cooperatives have stood the test of time. Firstmark
Credit Union has been an important contributor to the local economy for 80 years and
we remain dedicated to serving the community in San Antonio and the surrounding area.
STRONG RELATIONSHIPS
A trusted business partner, a trusted advisor, a trusted friend. We build these special
relationships over time by sharing with one another the milestones that mark our lives:
the wobbly first steps of childhood, the giddiness of a first car, the anticipation of a new
job, the excitement of a first mortgage, the pride of turning over an Open sign on a
new business.
It’s the same, in a way, at Firstmark Credit Union. Our guiding belief in “people helping
people” has enabled us to build a strong and lasting foundation based on reciprocal
trust and mutual cooperation with our members. Thus, in 2012, as we proudly celebrated
an important milestone in our history—our 80th anniversary—we were overjoyed to share
it with our special partners and friends: our members.
Looking back, it’s evident many things have changed during eight decades. Our membership of today looks vastly different from the day in 1932 when we opened our doors
to serve a community of local teachers and educators. Hi-tech, hi-wire, hi-energy, even
“hi” to friends on Facebook, financial health is now monitored on tablets, PCs, and smart
phones at the touch of a button. Today’s members, armed with limitless information at
their fingertips and the economic lessons of recent years, are more financially and technologically savvy than ever. Nevertheless, even as we keep pace with new technology
and products to serve the needs of a changing membership, longevity has taught us that
nothing can replace the personal touch of a trusted advisor or the welcoming smile of a
caring friend.
Firstmark at 80 is vibrant, updated, in step, but with the sensibility only a few laps around
the block can bring. By preserving our core principles of financial strength and conservative stewardship while maintaining the heart of a teacher, we have continued a legacy
of quality built over generations.
STRONG LEADERSHIP
We are pleased to report that Firstmark Credit Union accomplished another successful
year in 2012 by taking advantage of exciting opportunities and overcoming several
persistent challenges.
OVERCOMING CHALLENGES
Nationally, we were challenged by a U.S. economic recovery complicated by political
banter and election fervor, and burdened with the global pressures of foreign economies. Although encouraging signs of life appeared, these were often tempered with
lingering concerns, making unpredictability the only real certainty and stalling the march
toward total recovery.
Politically, the battle continued for smaller organizations caught in a wide net of governmental regulation originally intended to reign in big banks. However, industry representatives are gaining ground in crucial state and national advocacy efforts to encourage
favorable legislation. By educating lawmakers about the benefits of credit unions and the
impact adversarial legislation has on millions of members, our efforts will help protect
members from further unintended consequences of such legislation, as well as maintain
the overall health and effectiveness of the industry.
SEIZING OPPORTUNITIES
In contrast, the Texas economy remained stable and prosperous, adding new jobs and
steady growth despite the challenges faced elsewhere. These accomplishments were
echoed at Firstmark, where our 2012 lending strategy made it possible for thousands of
members to pursue their goals. In fact, whether we helped finance a wild idea into a new
business venture, buy a first home or fifth, or prepare for a new baby, small businesses
and individual members alike were able to take advantage of the many opportunities
afforded by the healthy local economy.
OFFERING MORE
We also made great strides in enhanced technology, innovative products, and unique
services tailored to the changing needs of Firstmark’s membership. Our focus on
88,506
Members
246
Employees
AUDIT COMMITTEE
Appointed by the Board of Directors, the Audit Committee ensures that a comprehensive
annual audit of the Credit Union’s books and affairs is conducted in accordance with
established principles and commission rules. The Committee is also responsible for
ensuring that Credit Union staff adheres to policies established by the Board of Directors
and that a strong internal control system covering daily operations and financial reporting
is in place.
In 2012, the Committee retained the CPA firm of Fisher, Herbst & Kemble, P.C., to
perform internal auditing procedures to verify compliance with state and national
regulations; verify adherence to the Credit Union’s policies and procedures; and review
controls over operations for adequate
The 2012 independent audit
indicates the Credit Union is in
good health, both financially
and operationally.
security. After it reviews the firm’s
reports and management’s responses,
the Committee addresses any issues in
its monthly meetings.
The Committee additionally retained the CPA firm of Padgett Stratemann & Co, to
conduct the annual independent audit of the statements of financial condition, related
statements of income, changes in members’ equity, and cash flows for the period ending
June 30, 2012. The findings indicate that Firstmark Credit Union is in good health, both
financially and operationally. Members may view a copy of the auditor’s report and
opinion at any Firstmark Credit Union location.
AUDIT COMMITTEE MEMBERS
Larry Wertheim,
Wertheim Chairperson
Anthony Petri,
Petri Committee Member
Ronald Kyle,
Kyle Committee Member
Gilbert Cremar,
Cremar Committee Member
Matthew Ralph,
Ralph Committee Member
$664M
in Deposits
$760M
in Assets
CREDIT COMMITTEE
The Credit Committee is appointed by the Board of Directors to regularly review Credit
Union loan policies, to ensure the safety and soundness of loan underwriting, and to
meet the membership’s credit needs. The Committee is also responsible for ensuring
that Credit Union staff adheres to policies, for taking action on selected loan requests,
and for overseeing the manner in which accounts are collected.
In 2012, Firstmark Credit Union successfully funded over $207 million in new loans for our
members, growing our loan portfolio by over $32 million from 2011. During the year, we
Firstmark will continue to
offer solutions in line with
our members’ goals, and our
focus will remain on helping
our members succeed
financially by offering sound
advice, quality service, and
competitive rates.
introduced new credit card products
that offered very competitive rates with
rewards or cash back options.
The Credit Committee is committed to
protecting the assets of our members
while maintaining Firstmark Credit
Union as a trustworthy source of affordable credit. We continually strive to
improve our members’ financial well-being by providing tangible savings opportunities
across all of our loan products.
Member Business Loans – 8%
Real Estate &
Home Improvement
Loans – 22%
New Auto Loans – 9%
Signature Loans – 4%
Credit Cards – 11%
Home Equity
Loans – 23%
Other Loans – 2%
$207M
in Funded Loans
Used Auto Loans – 21%
$32M
in Loan Growth
INCOME & EXPENSE
Results as of December 31,
2012
2011
$ 27,754,161
2,593,997
12,984,130
43,332,288
27,971,877
2,869,231
11,845,025
42,686,133
EXPENSES
Employee Compensation
Employee Benefits
Meetings and Employee Training
Association Dues
Office Occupancy
Office Operations
Marketing & Promotion
Member Loan Servicing
Member Services
Communications
Data Processing
Auditing Services
Professional/Outside
Provision for Loan Loss
NCUSIF Premium Assessment
Member Insurance
Operating Fees
Cash Over/Short
Annual Meeting
Miscellaneous Operating Expense
12,231,703
2,801,288
310,094
133,125
3,118,150
2,543,921
1,213,293
2,502,983
3,467,167
929,591
1,682,922
204,741
646,205
1,132,424
614,897
16,381
58,685
9,237
2,641
148,200
11,938,916
2,726,229
319,439
129,159
2,894,852
2,362,636
1,513,047
1,596,189
3,165,852
965,310
1,468,511
216,610
619,116
3,556,039
1,516,278
11,776
56,719
13,684
2,777
114,467
TOTAL OPERATING EXPENSE
33,767,648
35,187,606
158,363
4,926,713
412,132
39,264,856
(176,359)
5,488,246
21,870
40,521,363
4,067,432
2,164,770
INCOME
Interest on Loans to Members
Interest on Investments
Miscellaneous Income
Total Income
Non-Operating (Gain)/Loss
Dividends and Interest Paid to Members
Interest on Borrowed Funds
Total Expenses
NET INCOME
$
Reserves (in Millions)
Deposits (in Millions)
700
70
650
65
600
60
550
55
500
50
450
45
400
40
2009
2010
2011
2012
2009
2010
2011
2012
FINANCIAL CONDITION
Results as of December 31,
ASSETS
Loans to Members (Net of Allowance)
Accounts Receivable
Cash on Hand in Financial Institutions
Investments
Prepaids/Deferreds
Buildings (Net)
Land
Furniture, Fixtures & Equipment (Net)
Leasehold Improvement (Net)
Accrued Income
NCUA Deposit Insurance
Other Assets
TOTAL ASSETS
LIABILITIES AND CAPITAL
Notes Payable
Accounts Payable
Dividends Payable
Other Liabilities
Member Deposits
Regular Reserves
Accumulated Comprehensive Income–AFS
Accumulated Comprehensive Income–
Pension Plan
Undivided Earnings
TOTAL LIABILITIES & CAPITAL
2012
2011
$ 505,831,377
1,749,834
9,449,650
198,312,893
1,127,568
12,205,532
4,895,929
3,291,000
943,156
1,855,830
6,472,598
14,129,904
473,079,679
2,770,394
9,137,266
191,352,606
1,248,037
12,417,296
4,957,024
3,721,461
1,115,231
2,157,517
6,065,112
15,172,549
$ 760,265,271
723,194,172
20,037,000
8,324,515
393,699
4,825,266
664,331,982
14,553,488
666,293
0
7,597,639
461,233
2,606,451
652,290,346
14,553,488
(547,878)
(9,364,230)
56,497,258
(6,196,933)
52,429,826
$ 760,265,271
723,194,172
88,506
90,916
MEMBERSHIP
Assets (in Millions)
Net Loans (in Millions)
550
750
500
700
450
650
400
600
350
550
300
500
250
450
2009
2010
2011
2012
2009
2010
2011
2012
STRONG COMMITMENT
On June 1, 2012, Esther Rodriguez celebrated a milestone unrivaled at Firstmark Credit
Union: 43 years of dedicated service to the one organization she has ever called home.
Spending a lifetime with a single employer is a rarity these days; yet, with her retirement
in December 2012, this extraordinary woman completed the journey of a remarkable
career in the same place she started so many years ago.
Ms. Rodriguez began as a part-time employee during her senior year of high school.
Upon graduation in 1969, she was asked to become a permanent employee. Through
the years, she has been a teller, a loan officer, a new accounts representative, and
worked in member services, payroll, and collections.
She was selected to manage the Credit Union’s first branch office in 1986 and spent the
next 22 years as branch manager. The final position she held in her legacy of exceptional
service was assistant vice president of corporate relations.
“It’s been my honor to work with Esther,” exalts President/CEO
Leon Ewing, who has known her nearly three decades. “For
more than 43 years, she has selflessly given her very best to
our members.”
Congratulations, Esther, on 43 positively phenomenal years!
Enjoy your retirement with your family.
“The one thing that has never
changed is our commitment to our
members. I think that’s what has
really made me proud to be a part
of Firstmark Credit Union.”
– Esther Rodriguez
$40K
Raised for CUFK
$5,000
in Educator Scholarships
STRONG COMMUNITY
Firstmark is committed to building lasting relationships in the community, and we work
hard to make a meaningful difference. Credit Union employees contributed both their
time and talents to multiple charities, such as Haven for Hope, SA Reads, SA Youth, Big
Brothers Big Sisters, Friends of the Park, Any Baby Can, and more.
The Credit Union also continued a long tradition of community service by supporting
CHRISTUS Santa Rosa’s Children’s Hospital of San Antonio. Since 1986, the Credit
Union’s membership and employees have given close to $700,000 to the charity and
have consistently outperformed peers in the amount of dollars raised.
FIRSTMARK GOES BACK TO SCHOOL
A first for the Credit Union, early in the year we opened an in-school branch and ATM inside Reagan High School. It is staffed by paid high school co-op students. Our goal is to
assist high school students in the development of lifelong personal finance and employability skills, as well as provide support to the school’s business curriculum.
SCHOLARSHIPS AWARDED
Firstmark Credit Union awarded ten, $1,000 scholarships to local high school seniors
from the Frank Price Cunningham & Helen Shipman Cunningham scholarship program.
GIVING BACK TO EDUCATORS
In addition to giving out 81,000 planners to educators in 2012, the Credit Union also
gave ten, $500 awards to teachers to help with classroom expenses.
LIGHTHOUSE FOR THE BLIND ATM INSTALLATION
In support of Firstmark’s membership development and community outreach, we installed
an ADA compliant ATM at Lighthouse for the Blind, a private, non-profit organization
serving people who are blind or visually impaired. The ATM helps to complete the organization’s mission of enabling those they serve to live high quality, independent lives.
$10,000
in Student Scholarships
81,000
Academic Planners
BOARD OF DIRECTORS
Donald Pinson
Chairman
Rudy Peña
Vice Chairman
James Muir
Secretary/Treasurer
Clare Coleman
Director
Term Ends: Mar 2015
Term Ends: Mar 2015
Term Ends: Mar 2016
Term Ends: Mar 2014
Redell Ervin
Director
Kyle Friesenhahn
Director
Ignacio Orozco, Jr.
Director
Anthony Petri
Director
Term Ends: Mar 2014
Term Ends: Mar 2015
Term Ends: Mar 2016
Term Ends: Mar 2014
Joyce
Joyce Chamberlain
Chamberlain
Director Emeritus
Lucille
Lucille Herndon
Herndon
Director Emeritus
MANAGEMENT TEAM
Leon Ewing,
Ewing President / CEO
Edward Munoz,
Munoz VP / Loan Servicing
Jesse Martinez,
Martinez EVP / COO
Ryan Pierce,
Pierce VP / Branch Administration
Andrew Apple,
Apple SVP / CFO
Michael Poligala,
Poligala VP / Lending
Fred Hagerman,
Hagerman SVP / CMO
Tom Pryjomski,
Pryjomski VP / Facilities
Dawn Sloans,
Sloans SVP / CHRO
Adrian Rivera,
Rivera VP / Risk Management
Gregg Thorne,
Thorne SVP / CLO
Veronica Teran,
Teran VP / Finance
Brad Meley,
Meley VP / Commercial Lending
IN MEMORIAM
Ronald M. Cordes
Past Chairman
Board of Directors
Ronald M. Cordes served as a member of the Board of
Directors of Firstmark Credit Union beginning in 2005. He
was elected board chairman in 2008 and served in that
capacity until 2012. Under his direction, the Credit Union
grew in assets, members, branches and staff.
Mr. Cordes was a Vietnam Veteran and recipient of the
Purple Heart. More recently, he was the Director of Internal Audit for Northeast Independent School District, where he was responsible for oversight of the district’s financial
operations. He served 32 years as a United States Air Force civilian, during which time
he managed various regional audit office operations, including locations in Texas and
New Mexico. He held two bachelor’s degrees: a degree in zoology from Oklahoma State
University and a degree in accounting from Central State University.
Firstmark Credit Union was one of many organizations that benefited from his time and
talents as a selfless volunteer. Mr. Cordes passed away on July 8, 2012.