REPORT - TruWest Credit Union

2015 REPORT
AN NU AL
2
Pg. 3
Pg. 6
President | CEO and Chairman Letter
Treasurer’s Letter
Pg. 7
Pg. 8
Supervisory Committee Letter
Financial Highlights
Pg. 10
Pg. 11
Board of Directors
Senior Management
Experience the TruDifference
A letter from the President | CEO and Chairman
3
process, and we are gratified that
members once again ranked us so
highly in 2015, giving us an NPS of
67%. That places our member loyalty
rating on par with esteemed companies
such as Apple and Southwest Airlines.
Alan Althouse
President and CEO
Tom Cummiskey
Chairman of the Board
By building on the success of recent years and
enthusiastically pursuing innovation, TruWest® Credit
Union preserved its positive momentum and delivered
yet another strong financial performance in 2015.
TruWest maintained a solid capital position, ending
the year with a strong capital ratio of 10.5%—far
exceeding the regulatory authority’s 7% level required
to receive a “well capitalized” designation. Reflecting
this financial strength, TruWest Credit Union received
a “five star” designation from Bauer Financial, their
highest rating of financial strength.
We realize that the very foundation of our financial
stability is centered on our ability to provide members
with superior service and value. Each year we survey
our members through the Net Promoter Score (NPS)
TruWest also achieved a superior
branch service quality score from
members in 2015 of 6.79 on a scale of
7.0, the highest rating in our history.
Evidence of the value TruWest provides
can be found in our continued strong
growth in memberships. At the close
of 2015, we had 73,706 members, an
increase of 8% over the previous year.
Many of those new members came
to TruWest through our “branch of the
future” at Dobson and Elliot in Chandler.
With a contemporary look and feel, and
the most current digital technology,
this branch has been well received by
members and is growing rapidly. Our
physical expansion in 2015 included
new locations for branches in Round
Rock and Gilbert, which are modeled
after the great success of the Dobson
Annual Report
2015
4
and Elliot branch. In December, the
Round Rock branch opened across
from Dell headquarters, on Louis Henna
Boulevard, and in January of this year
the Gilbert branch moved from a small
leased space to a larger credit union
owned property on Pecos Road.
We were also able to accommodate
new members by expanding
membership eligibility throughout all
of Pinal County, following February’s
approval by the Arizona Department
of Financial Institutions. Previously,
TruWest membership in Arizona was
limited to only a few Pinal County ZIP
codes. Not only did the expansion
open our geographic footprint, but
it also increased our opportunities
to collaborate with auto dealerships,
ensuring that more people have
access to our low-rate auto loans.
As our field of membership continues
to grow, so too does our commitment
to improving and giving back to our
communities. In 2015 TruWest
provided a total of $341,604 to
23 first-time homebuyers through the Federal Home
Loan Bank’s WISH program (Workforce Initiative
Subsidy for Homeownership). The WISH program
enables us to offer qualified homebuyers a 3:1 grant
match, up to $15,000, for a down payment. Also,
in 2015, our employees donated $52,303 to Dell
Children’s Medical Center of Central Texas and to
Phoenix Children’s Hospital.
To improve member service in the digital age, we
continue to expand our use of technology and add to
our social media presence. We engage with members
in all major social media channels, and upgraded
our mobile app to include touch ID™ capabilities for
iPhone users. In late 2015 we enhanced our members’
digital security by transitioning to EMV chip card
technology for both our credit and debit cards.
TruWest’s field of membership includes all of
Maricopa and Pinal counties in Arizona and Travis
and Williamson counties in Texas. Moving forward, we
will develop and implement the means to spread the
TruWest brand throughout all four counties, giving all
potential members the opportunity to take advantage
of our TruDifference.
...we intend to invest in and expand our
ability to reach out via member-friendly
Experience the TruDifference
5
virtual electronic channels. Already this year
we are offering new mobile wallet payment
solutions such as Apple Pay®, Android Pay,
Samsung Pay and Visa Checkout.
Rather than focusing our efforts solely on establishing
additional physical branches, we intend to invest
in and expand our ability to reach out via memberfriendly virtual electronic channels. Already this year
we are offering new mobile wallet payment solutions
such as Apple Pay®, Android Pay, Samsung Pay and
Visa Checkout. Members will also soon have the
ability to view credit card transactions and apply for
and manage membership accounts (loan and deposit
accounts) using the TruWest mobile app. We are well
on the way to creating a virtual branch and becoming
the technology credit union of choice. Coming soon,
members will even be able to conveniently switch their
checking accounts from another financial institution to
TruWest, with a few clicks of their mouse or swipes on
their mobile device.
In 2016, change is in the air. Alan Althouse is taking
the reins from Dan Desmond, who retired as President
and CEO. Alan has been TruWest’s Executive Vice
President and Chief Financial Officer since 2004, and
will continue the focus on member service, credit
union growth and value to members.
In the midst of change, there is much
about TruWest that will remain the
same: the same great service, the
same great loan and savings rates, the
same safety and soundness, and the
same nominal fee structure. In other
words, the TruDifference will still provide
incredible value to our members.
At the end of the day, our goal
is to serve our members where
they are, when they want to be
served and with the technology
that makes their lives easier.
At the end of the day, our goal is to
serve our members where they are,
when they want to be served and with
the technology that makes their lives
easier. We encourage you to spread
the word so that others can join us and
take advantage of the best financial
products, services and value in Arizona
and Texas, at TruWest Credit Union!
Annual Report
2015
Treasurer’s Letter
6
As a member, you are also an owner and a
valuable contributor to TruWest’s success.
continued to choose the credit union for their lending
needs, they helped the loan portfolio reach $787M in
total loans outstanding, an increase of 8% from 2014.
TruWest’s capital ratio, a key measure of financial
stability and soundness, held strong at 10.5%.
Scott Johs
Treasurer
It is always a delight to be the
messenger when there is good news
to share, and I am pleased to say that
2015 was another year of excellent
growth for TruWest Credit Union. As
always, we remain steadfast in our
commitment to protecting your financial
assets and providing unsurpassed
member service. Below is a recap of
our financial results.
TruWest ended 2015 with assets
totaling $927M, an increase of 4% from
the previous year, and total member
deposits of $816.9M, also an increase
of 4%. Membership continued to
grow, up 8% to 73,706. As members
Net interest income for 2015 was $33.3M, up 5%
from a year earlier. Operating expenses were $39.2M,
supporting TruWest’s mission of providing solutions
for members to meet their financial goals. Dividends
paid in 2015 were $1.3M, and TruWest reported net
income of $3.5M versus $5.4M in 2014.
As a member, you are also an owner and a valuable
contributor to TruWest’s success. With that in
mind, I join Tom Cummiskey, Chairman of the
Board, and Alan Althouse, President and CEO, in
personally thanking you for your ongoing support.
Our entire team works hard to maintain TruWest’s
5-star “superior” rating from Bauer Financial, which
demonstrates the credit union’s strength as a financial
institution, and we are proud to serve you. With the
expanded technology and enhanced services our
leadership has planned for the year ahead, I anticipate
another successful year for your credit union in 2016.
Experience the TruDifference
Supervisory Committee Letter
7
The Supervisory Committee is proud to be part of the
TruWest Credit Union organization. We are a volunteer
group appointed by the Board of Directors, and our
primary focus is assisting the Board with overseeing
the integrity of the credit union’s financial statements.
As members of the credit union ourselves, we work
diligently to ensure that your assets are secure
through the implementation of sound financial
policies, procedures and controls.
Rebecca Weisenberg
Bill Cranker
Through a collaborative effort with various internal
and external entities—including TruWest’s Risk
Management Department and management team,
external auditors CliftonLarsonAllen, LLP, the National
Credit Union Administration, the Arizona Department
of Financial Institutions and the Texas Credit
Union Department—we participate in overseeing
internal controls, internal and external auditors, and
compliance with legal and regulatory requirements.
Susanna DeFranco
Based on this work, we confidently report that
TruWest Credit Union is operating with a system
of strong internal controls and is a sound financial
institution. We are pleased with the actions taken and
the standards upheld in 2015, and we look forward to
continuing this partnership with the TruWest Board,
management and members in the year ahead.
Annual Report
2015
2013
Loans to Members
Allowance for Loan Loss
2014
927,024,607
2015
TOTAL ASSETS
Balance Sheet
ASSETS
893,629,857
826,260,837
Financial Highlights
8
2015
2014
% CHANGE
787,108,201
727,230,090
8%
-3,926,604
-3,798,523
3%
783,181,597
723,431,567
8%
Total Investments
96,637,895
126,437,536
-24%
Net Fixed Assets
21,797,345
20,384,740
7%
Net Loans
Other Assets
25,407,770
23,376,014
9%
Total Assets
927,024,607
893,629,857
4%
LIABILITIES
2015
2014
% CHANGE
Total Liabilities
11,787,354
10,917,378
8%
375,508,745
355,836,982
6%
Total Members Equity
Total Savings
Total Checking
58,452,672
49,479,693
18%
295,890,659
287,243,088
3%
Total IRA
27,302,231
30,205,018
-10%
Total Certificates
59,715,738
64,253,971
-7%
Total Deposits
816,870,045
787,018,752
4%
Total Reserves
98,367,208
95,693,727
3%
927,024,607
893,629,857
4%
Total Money Market
Total Liabilities, Member Deposits and Reserves
2013
2014
2015
MEMBER DEPO SITS
2013
2014
787,108,201
2013
2015
2014
10.5%
10.7%
9
10.5%
727,230,090
637,947,201
816,870,045
787,018,752
726,953,699
Experience the TruDifference
2015
NET WORTH RATIO
MEMBER LO A N S
Highlights and Income Statement
HIGHLIGHTS
2015
2014
% CHANGE
Members
73,706
67,944
8%
Saving Accounts
84,722
78,440
8%
Checking Accounts
42,026
38,524
9%
IRAs
3,106
3,323
-7%
Money Market
6,900
6,857
1%
Certificates
2,274
2,518
-10%
Number of Loans
47,802
44,398
8%
Online Banking Users
41,544
36,000
15%
Mobile Banking Users
24,002
18,221
32%
Bill Payer Users
15,013
13,867
8%
INCOME STATEMENT
2015
2014
% CHANGE
31,692,597
29,618,833
7%
Interest on Investments
3,268,521
3,525,323
-7%
Interest Expense
1,657,269
1,410,635
17%
Net Interest Income
33,303,849
31,733,521
5%
Non-Interest Income
13,522,489
12,672,515
7%
Operating Expenses
Interest on Loans
39,169,346
36,218,323
8%
Provision for Loan Losses
4,237,157
2,815,773
50%
Net Income
3,449,836
5,371,940
-36%
Annual Report
2015
Board of Directors
10
Tom Cummiskey (AZ)
David Prechtel (AZ)
Jeffrey Myers (TX)
Scott Johs (AZ)
Tim Niesz (AZ)
Chairman
Term Expiration 2018
Vice Chairman
Treasurer
Term Expiration 2017
Term Expiration 2017
Term Expiration 2016
Secretary
Term Expiration 2017
Rick O’Connor (AZ)
Jeff Homer (AZ)
Mike Moulton (TX)
Mike Vasko (AZ)
Clarke Straughan (TX)
Term Expiration 2016
Term Expiration 2016
Term Expiration 2018
Term Expiration 2018
Advisory Committee
Term Expiration 2016
Supervisory Committee
Rebecca Weisenberg
Bill Cranker
Susanna DeFranco
Term Expiration 2016
Term Expiration 2018
Term Expiration 2018
Experience the TruDifference
Senior Management
11
Farid Farbod
Alan Althouse
Gary Bernard
Senior Vice President and Chief Lending Officer
President and Chief Executive Officer
Executive Vice President and Chief Operations Officer
Chris Kearney
Jeff Peabody
Senior Vice President and Chief Information Officer
Senior Vice President and Chief Marketing Officer
Annual Report
2015