downloadable PDF - Merrimack Valley Credit Union

2 012 Annual Report
Building a better
future together...
with your
best interest
at heart.
Santa Day Parade
Community Meals
Turkey Brigade
Federally insured by NCUA
Chairman’s and President’s Report
We’re building a better future together…with your best interest at heart.
It gives us great pleasure to report to our members the Credit Union’s accomplishments in 2012. Our strong
financials provided a solid foundation for another successful year. The Credit Union ended 2012 with 9.74%
net worth and $484 million in total assets, an increase of $43.6 million from the previous year. Our net
income totaled $2,755,976, an increase of $1.1 million from 2011. Through a concerted team effort, there
was a sizeable reduction in operating expenses of $544,938 which included a significant decrease in the
required National Credit Union Share Insurance Fund (NCUSIF)* special assessment from the previous year.
In 2012, we continued to offer our wide array of lending products from auto loans to SBA loans and
much more. Lending services, like our new free Car Buying Service, was well utilized and received by
members happy to be assisted in getting a great deal on their vehicle purchase. We ended the year with
$235,188,025 in total loans. New loans originated accounted for $111,893,719 of the total loan portfolio.
Of that total, over $17,086,756 was originated in underserved market areas. With our low rates, mortgage
products were responsible for much of the Credit Union’s loan originations and income, with over
$82,172,180 in new loans. In 2013, we will continue to examine ways to make borrowing more accessible
and convenient to our members.
With our solid financial foundation, we were able to focus on building better delivery channels for our
members. Our newly designed web site was the starting point. In addition to a fresh new look and simpler
navigation, our new web site offers members an entire financial resource center, quick links to frequently
used applications and forms, up-to-date news and calendar information, featured member polls, a
single sign-on location for online banking users, and an opportunity to chat live with a member service
representative. In 2013, online account opening will be an added feature to our web site.
For our smartphone users, we also launched a mobile version of our web site that includes key Credit Union
information like rates, hours, branch locations, and an ATM locator. With the adoption of our mobile site,
we began developing a mobile banking application. On February 14th, 2013, Valentine’s Day, we released
our mobile application and had over 1,000 users within two days. With mobile banking, members can check
balances, track expenses, make transfers between accounts, and pay bills. Later this year, we plan to add
remote deposit capture capabilities as well, which will allow members to deposit checks by capturing and
submitting check images through mobile banking.
In 2012, we began engaging in Social Media with the adoption of a Facebook Page, Twitter Account, and
Blog. Our goal was to provide our members with important notifications, share Credit Union and community
news, and support local events and organizations through these tools. In 2013, we plan to do the same with
mission
Merrimack Valley Federal Credit Union’s mission
continues to hold strong with its goal to exceed member
expectations through quality service for every member
every time.
financially sound
Merrimack Valley Federal Credit Union ended 2012 with
over $484M in assets and serves over 40,779 members in
the Merrimack Valley.
some added engagement from our members through contests, polls, and more. You’ll just have to like,
follow or visit us to see what we have planned!
Operationally this past year, we instituted two key changes to reduce risk for our members and the
Credit Union. First, online banking users were asked to update access codes with increases in length and
complexity for their protection, and will be required to regularly do so in the future. Second, we adopted
specialized software to assist in managing member fraud and potential risks to the Credit Union.
Our community spirit was stronger than ever in 2012. Together our employees participated in the Cancer
Relay for Life, Ocasio’s Thanksgiving Turkey Brigade, Community Meals, the Santa Day Parade, and more.
We hosted our very first “We Love Santa Party” that was a huge success with hundreds of children and
families enjoying games, contests, activities, and a visit from Santa himself at our Corporate Office in
Lawrence. We plan to make it even bigger in 2013!
Our 12th Annual Charity Golf Tournament was also a great success thanks to our members, staff, and
business partners. From our Tournament and other special fundraisers, we donated $30,000 to Emmaus,
Inc. and $17,500 to the Merrimack Valley YMCA to help assist them in carrying out their missions to serve
those in need in the Merrimack Valley. We also supported many other local community events, schools,
non-profits, civil service organizations, chambers, social service agencies, athletic programs, and charities
through various sponsorships and donations.
An eventful year concluded with the merger of Merrimack College Federal Credit Union on December 1st,
2012. We’re very excited to welcome our new Merrimack College members to Merrimack Valley, and we
look forward to serving their financial needs for many years to come. We believe this new partnership will
be a benefit to all of our Credit Union members.
Finally, long serving Director and Secretary Maureen L. Klein retired from the Board of Directors after
25 years of service. We thank her for her dedication and commitment to the Credit Union and wish her
well in her retirement. We would also like to thank our entire Board of Directors, our loyal members,
management team, and staff for another successful year. We’re building a better future together…with
your best interest at heart.
Alexander R. Oski
Chairman
Peter J. Matthews, Jr.
President/CEO
* In 2009 the National Credit Union Administration began assessing an additional annual expense to all credit unions to fund the National Credit Union Share Insurance Fund. We
expect this assessment to continue for a number of years and vary in amount. In 2012, the Credit Union was required to pay $385,553 for the special assessment.
Supervisory Committee Report
The Supervisory Committee is tasked with maintaining oversight
of the Credit Union’s financial and operational activities. Its basic
regulatory requirements are to obtain an annual opinion audit and
perform a verification of members’ accounts at least every two years.
In addition, the Supervisory Committee oversees and coordinates the
Internal Auditing activity within the Credit Union.
Union policies and procedures, National Credit Union Administration
and other Federal regulations. These audits were performed across
a wide range of operational activities which are critical to financial
stability and protection of members’ interests. Audits conducted and
the associated corrective actions implemented by Management met
these objectives.
On an ongoing basis, various financial, lending and operational audits
are conducted by Internal Audit to ensure the Credit Union is properly
accounting for operations and is operating in compliance with
internal policies and various Federal regulations. As the Board and
Management continue to develop new policies and introduce new
products, it is the Supervisory Committee’s responsibility to ensure
proper internal controls are established and the Credit Union’s safety
and soundness are not compromised.
The Supervisory Committee engages the CPA firm of McGladrey &
Pullen for annual opinion audits and verification of members accounts.
The most recent audit was for the year ending December 31, 2012.
McGladrey & Pullen has issued an opinion that the audited financial
statements present fairly, in all material respects, the financial position
of the Merrimack Valley Federal Credit Union as of December 31, 2012
and the results of its operations and its cash flows for the year ended,
in conformity with accounting principles generally accepted in the
United States of America.
Internal Audits conducted in 2012 evaluated the organization for
satisfactory documentation of and conformance with internal Credit
Supervisory Committee
Domenic P. Mazzocco, Chairman
Douglas R. Cokely
Peter A. Mills
Rodney A. Dauteuil, CIA, CFSA, CUCE,
Director of Internal Audit
Financial Results
2011 2012
ASSETS
Loans
$ 242,998,364
$235,013,532
Loan Loss Allowance (2,848,505) (2,652,504)
Notes Receivable
690,340
676,290
Net Loans
$ 240,840,199
2011 2012
OPERATING INCOME
Interest on Loans $ 10,759,883
$ 9,974,372
Income from Investments 3,799,460
3,661,670
Fees and Charges
2,756,528 2,944,281
Misc. Operating Income 1,398,379 2,749,856
$ 233,037,318
Total Operating Income Cash & Receivables
$
5,841,014
$ 5,000,928
Investments 177,532,532230,104,962
Accrued Income
445,593
449,999
Prepaid & Deferred Expenses
57,857
177,305
Fixed Assets (Net)
10,212,661
9,460,384
Other Assets
2,420,491
2,368,834
Deposit in NCUSIF
3,744,802
4,115,737
Total Assets
$ 441,095,150
$484,715,467
LIABILITIES AND EQUITY
Accounts Payable $
1,765,843
$ 1,952,548
Dividends Payable 328 287
Accrued Expenses -1,278,187 -1,487,721
Shares 393,669,737 434,004,563
Regular Reserve 8,302,779 9,234,084
Undivided Earnings 35,203,849 37,959,825
Equity Acquired from Merger 0 6,740
Unrealized Gain/Loss
on Investments 3,430,801 3,045,142
Total Liabilities and Equity
$ 441,095,150
OPERATING EXPENSES
Compensation $
Employee Benefits Travel & Conf Exp Association Dues Office Occupancy Exp Office Operation Exp Marketing Exp Loan Servicing Exp Prof.& Outside Services Prov. for Loan Losses Members’ Insurance NCUA Operating Fee Cash Over and Short Annual Meeting Expense Misc. Operating Exp 18,714,251 4,762,099 $
2,102,969 113,337 65,398 1,448,436 2,966,249 455,989 536,202 208,509 545,611 936,200 95,984 4,948 31,311 9,357 19,330,179
4,946,289
1,532,423
143,037
65,181
1,478,417
3,140,799
575,145
621,771
201,813
503,369
385,553
99,493
1,372
31,825
11,173
Total Operating Expense 14,282,598 13,737,660
Income Before Dividends Dividends Expense 4,431,652 2,782,272 5,592,519
2,836,543
NET OPERATING INCOME $
1,649,380 $
2,755,976
Actual Write-offs:
$
621,078
$
958,296
$ 484,715,467
Financial Results
Misc.
14%
Operating Income
Fees
15%
Loans$9,974,372
Investments$3,661,670
Fees$2,944,281
Misc.$2,749,856
Investments
19%
Shares
14%
Dividends Paid
Certificates$1,659,155
IRA Certificates
$766,585
Shares$410,803
Loans 52%
IRA Certificates
27%
Certificates
59%
IRA Shares 2%
IRA Certificates 11%
Deposit Accounts
Shares
$186,546,225
Certificates
$137,162,818
Share Draft
$54,284,046
IRA Certificates $47,669,972
IRA Shares
$8,341,502
Share Draft
12%
Certificates
32%
Shares 43%
Financial Results
Net Worth Ratio
12%
10%
8%
0%
9.74%
9.86%
9.93%
9.44%
10.55%
9.55%
9.65%
10.55%
11.03%
2%
10.38%
4%
9.98%
6%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Total Assets
$500,000,000
$450,000,000
$400,000,000
$350,000,000
$300,000,000
$484,715,467
$441,095,150
$421,703,997
$434,544,723
$391,836,487
$427,087,998
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Board of Directors
Alexander R. Oski, Board Chairman
Leon M. Pratt, Jr. 1st Vice Chairman
Michael M. Sayler, 2nd Vice Chairman
Mukesh Dave, Secretary
Augustine S. Longo, Jr. Treasurer
John J. McSweeney, Assistant Treasurer
Luis M. Barros
Marianne Fantini
Alison J. Gulubicki
Domenic Mazzocco
B. Robert Zingali
Catherine M. DeBurro, Associate
Ronald J. Guilmette, Associate
Federally insured by NCUA
$445,831,290
$50,000,000
$429,318,105
$100,000,000
$397,260,762
$152,000,000
$381,663,639
$200,000,000
$368,269,689
$250,000,000
Senior Management
Peter J. Matthews, Jr., CEO/President
Thomas Andrew, VP Lending
Donald Croteau, VP Finance & MIS
John J. Howard, VP Operations
Laura Wante, VP Human Resources
Management
Jay Caldwell, AVP Retail Lending
Jennifer Grenier-Spiecker, AVP Marketing
Richard Hanlon, AVP Business Lending
Anthony Marino, AVP Operations
Tracy Mermet, AVP Human Resources & Training
Michael Pliskaner, AVP MIS
Jan White, AVP Finance
Dale Dyer, Branch Manager
Carrie Fitzgerald, Branch Manager
Kellie Gallant, Member Service Supervisor
Karen Green, Branch Manager
Nikki Hill, Member Service Supervisor
Digna Jhonson, Branch Manager
Lisa Lewis, Collections Manager
Wendi Moreau, Branch Manager
Elizabeth Pearl, Branch Operations Supervisor
Marie Petroni, Member Service Supervisor
Bonnie Tardugno, Consumer Lending Supervisor
Brett Terry, Mortgage Manager
Kelly Tracy, Member Service Supervisor
Rebeca Urena, Call Center Manager
Lisa Williams, Member Service Supervisor
1.800.356.0067
www.merrimack-valley-fcu.org