Forging Ahead, 2012 - Financial Partners Credit Union

FORGING AHEAD
ANNUAL REPORT
2012
www.fpcu.org
7800 East Imperial Highway
Downey, CA 90242
Ph. 800.950.7328
FINANCIAL PARTNERS
Our Vision
B
uilding lifetime financial partnerships.
CREDO
W e are caring professionals who pledge to
provide the highest level of personalized service
to members and fellow partners by proactively
identifying their needs and tailoring a solution
that will ultimately best serve the member.
Each partner will embody our vision of “building
lifetime financial partnerships” by collaborating
to create a memorable service experience that is
genuinely warm, caring and welcoming. We will be
distinguished by our integrity, care, commitment
and passion for excellence.
Content
4
Chairman & President’s
Message
6
Key Achievements
7
2012 by the Numbers
8
Treasurer’s Report
9
Supervisory Committee
Report
10
Statement of Financial
Condition
11
Statement of Income
12
Board of Directors
13
Executive Management
www.fpcu.org
3
Message FROM THE CHAIRMAN AND PRESIDENT
T
he economy is showing signs of new life and
our growth is steadily on the rise. Yet with each
new breath of growth comes a fresh challenge of
mastering technological advances and regulatory
changes. The leadership at Financial Partners
Credit Union is determined in tackling each new
challenge with renewed commitment to our
vision of “building lifetime financial partnerships”
with you, our member owners. So as we celebrate
the successes in 2012, we are enthusiastically
forging ahead never being satisfied with
yesterday when there are always new peaks to
conquer tomorrow.
In 2012 Financial Partners Credit Union’s assets
grew by 7.3% ending the year at $794 million. The
lending engine steamed full-speed ahead
4
2012 Annual Report
originating over $376 million in loans—the
highest origination year in the credit union’s
history. This was in large part due to stellar
originations in first mortgages, business loans,
and credit cards. On the depository side, the credit
union has continued to grow. Liquid deposits
grew by $33 million and the checking portfolio
segment grew to $127 million.
The success of this past year was returned back to
members in the form of faster, more convenient
services, higher dividends on savings accounts,
and lower rates on loans. We reached out to
members and helped many consolidate credit
card balances and restructure overall borrowings
to help lower their payments. Through
consultative credit reviews, we helped many
members refinance their home or auto loans
from other institutions at a much lower rate.
We tracked these savings in 2012 to see how
much money we could save members on their
home and auto loans. These efforts resulted in
over $10 million in savings to members.
“We stayed focused on core values as articulated in our
vision of Building Lifetime Financial Parnerships.”
­ — earl s. washington
We understand the value of putting money back
in your wallet, but we don’t rest there. We strive
to provide members with exemplary service to
go with that savings. Once again our outstanding
service performance record was validated this past
year when an independent random survey of the
members revealed 98% of Financial Partners Credit
Union members are “satisfied or very satisfied.”
I
n 2012 we enhanced mobile banking with
additional new cutting edge technology. With over
8,000 members using mobile banking through
their smartphones, we know it’s important to
provide you the best and most up-to-date mobile
solutions. FPCU Mobile provides the ability to
deposit checks using your phone’s camera with
Mobile Deposit. You can now pay bills anywhere,
anytime with Mobile Bill Pay and transfer funds
to anyone with the new Send Money function.
W e also introduced new and improved card
services. FPCU introduced a reloadable debit
card that provides the convenience and access
of a checking account with the additional security
of knowing there are no overdraft fees. It is the
perfect card for traveling, online purchases, and
educating your kids and grandkids about financial
responsibility. We also introduced a Platinum
Rewards credit card. Using your Rewards Card for
shopping, dining and everyday purchases lets you
earn points towards merchandise, gift cards and
travel. All it takes is one qualified purchase per
year and your points will never expire.
T
his past year we supported many important
causes that positively impacted the communities
in which we serve. Just a few examples include
the Downey Chamber Street Fair and annual
Christmas Parade; local home buyer and wealth
management seminars; the Columbia Memorial
Space Exhibit on asteroids; the Boeing Golf
Tournament and annual $5,000 scholarship; and
through the participation in Credit Unions for
Kids we donated over $27,000 to both Children’s
Hospital Orange County and Los Angeles.
“At the end of the day, we understand that the only
opinions that matter are those of our members.”
— NADER MOGHADDAM
On behalf of the Board of Directors and
Management Team, we thank you for your
continued membership. We encourage you to
spread the word to friends, family, and community
members about the exceptional value and
personal service you receive at Financial Partners
Credit Union. We consider it a privilege to serve
you, our member owners!
earl s. washington
Chairman of the Board
nader moghaddam
President & Ceo
www.fpcu.org
5
Key
achievements
+
Launched Mobile Bill Pay and Send Money,
our person-to-person mobile funds
transfer solution
+ Created Platinum Rewards Credit Card
allowing you to earn points towards travel
and gifts
+ Upgraded ATMs — no envelopes needed for
deposits
+
+ Introduced Reloadable Debit Card with no
credit checks and no fees
eSign allows members to sign loan documents
electronically
+ Implemented After Hours Lending to allow
members to submit loan applications 24/7
+ 6
Began offering Balance Financial Fitness
Program on www.fpcu.org, providing financial
literacy tools and resources by phone
and online
+ Made Banking By Phone easier to use
and navigate
+ Launched Facebook and Twitter accounts to
connect socially with members and community
+ Broadened business lending to include Small
Business Administration (SBA) loans
2012 Annual Report
2012
by the numbers
NET INCOME
+$
700
THOUSAND
6.00M
$5.9
4.75M
million
3.50M
2.25M
1.00M
2010
2012
2011
GROWTH
4,046
New members
SERVICE
98
%
*Satisfied/Very Satisfied
LOAN SERVICING PORTFOLIO
ASSETS UNDER MANAGEMENT
+$
25
MILLION
+$
19
MILLION
1.100B
200M
1.075B
$1.08
Billion
1.050B
1.025B
1.000B
million
150M
125M
2010
2011
2012
VALUE
10Million
$
100M
2010
EDUCATION
210
Seminars
LOANS
EQUITY
Million
Highest origination in history
2012
2011
Saved members
over $10 million in loans
376
$
$192
175M
8.95
%
Net worth
7
Treasurer’s report
T
he 2012 Audited
The Credit Union continued in the “Well
Financial Statements
Capitalized” category, as defined by the NCUA,
represent a robust year
while improving the net worth ratio to 8.95%
for FPCU. Net Income for
and growing assets by $54 million to reach $794
the year was $5.9 million, one of the best financial
million. We, the Board of Directors, Management,
performances in the Credit Union’s entire history.
and all Financial Partners employees continue
Financial Partners Credit Union worked diligently
to be committed to providing a better financial
to strengthen the income stream and balance
future for the member-owners.
sheet by prudently managing credit losses, the
Asset/Liability structure, and expenses.
don plog
Treasurer
Supervisory Committee REPORT
F
inancial Partners
statements as of December 31, 2012. For three
Credit Union has the
consecutive years, the firm issued an unqualified
responsibility to ensure
opinion in their Independent Auditors’ Report.
that your funds are safe
The summary of Financial Partners’ Consolidated
and that they are as productive as possible. The
Statements of Financial Condition as of December
Supervisory Committee is responsible to you,
31, 2012 is included herein.
the member, to ensure that your Credit Union
Based on our review and the result of the auditor’s
operates prudently and according to the rules and
efforts, the Supervisory Committee believes the
regulations set forth by the State of California
credit union has maintained accurate and timely
Department of Financial Institutions (DFI) and the
accounting records, and applied the policies and
National Credit Union Administration (NCUA).
procedures established by the Board of Directors.
To accomplish this, the Supervisory Committee
It is the opinion of the Supervisory Committee that
retained services of the independent audit firm
your Credit Union is in a strong financial position
of McGladrey, LLP to complete Financial Partners’
and is operated in a safe and sound manner.
audit and examine the consolidated financial
Gary W. macheel
Supervisory Committee Chairman
www.fpcu.org
9
STATEMENT OF FINANCIAL CONDITION
A SSETS
2012
2011
Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . $ 68,367,738
$ 41,513,972
Investments:
Available for sale. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 156,077,667
$ 165,038,957
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,792,000
$ 3,840,668
Loans held for sale. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,099,750
$ 3,124,350
Loans, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 530,054,884
$ 499,654,672
Accrued interest receivable. . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,061,704
$ 2,111,080
Premises and equipment, net. . . . . . . . . . . . . . . . . . . . . . . . $ 4,304,059
$ 4,766,512
NCUSIF deposit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,596,111
$ 6,277,741
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 11,012,194
$ 14,041,064
Total assets
L iabilities and Members’ Equity
$794,366,107
$740,369,016
2011
2012
Investments:
Members’ shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 671,193,891 $ 651,029,120
Borrowed funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 30,000,000 $ 15,000,000
Accrued expenses and other liabilities. . . . . . . . . . . . . $ 21,487,010 $ 9,063,873
Total liabilities
$ 722,680,901 $ 675,092,993
Commitments and contingent liabilities
Members’ equity
Retained earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 65,608,205
$ 59,726,935
Equity acquired in merger. . . . . . . . . . . . . . . . . . . . . . . . . $ 5,503,067
$ 5,503,067
Accumulated other comprehensive income (loss). . . . . . . $ 573,934
$ 46,021
Total members’ equity
Total liabilities and members’ equity
10
2012 Annual Report
$ 71,685,206 $ 65,276,023
$ 794,366,107 $ 740,369,016
STATEMENT OF INCOME
2012
2011
Interest income:
Loans
Investments and cash equivalents
Total interest income
$ 24,724,365 $ 26,031,124
$ 1,536,686 $ 1,999,617
$ 26,261,051 $ 28,030,741
$ 3,972,024 $ 4,678,033
$ 610,316 $ 516,109
$ 4,582,340 $ 5,194,142
Interest expense:
Members’ shares
Borrowed funds
Total interest expense
Net interest income (NII)
Provision for loan losses
NII after provision for loan losses
$ 21,678,711
$ 22,836,599
$ 2,705,000 $ 2,025,000
$ 18,973,711
$ 20,811,599
Non-interest income:
Overdraft income
$ 2,522,231
Financial services and insurance
$ 1,643,292
Debit card interchange income
$ 1,629,122
Service charges and other fees
$ 565,091
Gain on sale of loans
Other
Total non-interest income
$ (1,574,204)
$ 1,309,793
$ 7,187,089
$ 2,783,552
$ 1,460,805
$ 567,740
$ 3,459,447
$ (97,576)
$ 11,972,621
$ 9,483,761
Non-interest EXPENsE:
Salaries and benefits
$ 13,547,989
Operations
$ 9,001,086 Occupancy
$ 1,889,356
NCUSIF assessment
Total non-interest expense
Net income
$ 8,759,219
$ 626,631 $ 25,065,062
$ 5,881,270 $ 12,825,210
$ 1,914,558
$ 1,569,435
$ 25,068,422
$ 5,226,938
BOARD OF DIRECTORS
1
2
3
4
1Earl S. Washington
Chairman
2Joe Spetz
Vice-Chairman
3Don Plog
Treasurer
5
6
4Richard C. Seamans
7
Secretary
5 Earl Beauvais
6 Alan Bergman
7 Ralph Crowther
8
9
10
11
8 Jack Shuler
9 Barbara A. Smith
10Yves Pinkowitz
Associate Board Member
11Steve Koester
Associate Board Member
SUPERVISORY COMMITTEE
1
2
3
1 Gary W. Macheel
Chairman
2 Donna P. Clawson
3 Caryn Phillips
12
The LEADERSHIP Behind Our Performance
A chieving our goals is the end-result of hard work, discipline and collaboration.
Everyone, from your
Board of Directors and Supervisory Committee to the management team has been instrumental in achieving
this year’s success.
EXECUTIVE MANAGEMENT
1
2
3
4
5
6
President & CEO
1
Nader Moghaddam
2
Mary Torsney 3
Michael Patterson
4
Laura Szitar
SVP, Human Resources & Administration
5
Laurie Tyler
VP, Sales & Member Service
6
Wanda Williams
SVP, Chief Financial Officer
SVP, Chief Lending Officer
11
SVP, Planning, Technology & Risk Management
www.fpcu.org
13
W e are enthusiastically forging ahead
never being satisfied with yesterday when
there are always new peaks to conquer
tomorrow.
2012 fpcu
7800 E a s t I mpe r i al H i g hw ay
•
D ow ney , CA 9024 2
•
Ph. 80 0 . 950 . 73 28
•
Web. w w w .fp c u .org