2014 - SRP Federal Credit Union

Following the 2014 SRP Federal Credit Union meeting I was elected by the Board of Directors to the position of Chair. For
the past 16 years I have served on the Board and during most of that time held the position of Vice Chair. I succeed Bruce
Burns who stepped down as Chair after guiding the Board for the past 25 years. He remains on the Board and assumes the
title Chairman Emeritus.
Under Bruce’s outstanding leadership our Credit Union experienced significant growth both in members and assets. He led
the Board through many important, sometimes tough, decisions. During his tenure the credit union grew from $158 million
in assets to over $694 million and increased membership by 300% to almost 104,000 members. SRP’s branch network
expanded from one to sixteen and into Georgia to better serve members where they live not where they work. On behalf
of our members, Board and staff I would express our deep appreciation for his dedicated service and leadership through
the years and look forward to his mentoring as we move into the future.
As SRP moves into 2015 economic conditions continue to improve both locally and nationally. The economy as a whole
is getting stronger while inflation remains in check. The Federal Reserve continued to maintain low interest rates during
2014 and the same is expected for 2015. Interest rates will increase sometime in the future, however even the most savvy
economic observers cannot agree on exactly when this will occur. SRP has been able to successfully navigate through this
difficult economic environment and is well positioned going forward.
The past year was good for SRP and hopefully its members. Our capital position continues to strengthen, but never at the
expense of safety and soundness. We are now serving more than 100,000 members in the CSRA with a competitive array
of financial services, offering significant value to our members. It is important to note that we are carefully managing growth
in order to maintain a sound capital base protecting our members’ assets and remaining a viable financial institution.
We as a nation are putting the effects of the Great Recession behind us. For the past few years all credit unions dealt
with closer scrutiny from the NCUA, our Federal regulator, as they imposed strict rules to ensure financial soundness. All
credit unions were required to contribute to the corporate share insurance fund to rebuild the deposit insurance program.
Although credit unions remained strong during the financial crisis and were not the cause of the Great Recession, NCUA
was determined to act decisively to instill confidence in the industry. I am happy to report that there was no corporate share
insurance assessment for 2014 and we do not expect one for 2015.
Although the problems associated with the financial downturn appear to be behind us, regulations and compliance continue
to increase and pose a substantial burden to our Credit Union. We deploy significant resources to comply with the varied
regulations and mandated requirements.
Cyber crime is a big concern, and will remain a critical issue during 2015 and on in the future. Cyber criminals are
continuously probing all businesses searching for weaknesses to be exploited. Financial institutions are an obvious prime
target. SRP works diligently to protect our members’ personal information and will remain vigilant in guarding against
breaches. SRP maintains strong safeguards against data security intrusions and other forms of cyber crime. Our
safeguards include: regular cyber security and IT audits; strong firewalls; and redundant systems and backup.
However, most of the data problems occur at the merchant level such as Target, Home Depot and UPS. Other than reputation risk these vendors do not suffer a penalty when data in their possession is compromised. SRP Federal Credit Union
along with other financial institutions, both directly and through NAFCU, our trade organization, is pushing Congress for
action to strengthen the laws covering responsibility for data security and breaches.
As we enter 2015 one of our major focuses will be to establish SRP as a major player in the Real Estate Loan Market. Although we have been making these loans for many years, we never have had a full array of products for you our members.
We now have the ability to handle all types of loan requests including VA, FHA, USDA, and conventional loans. We have
developed and staffed a complete business unit to offer and deliver the best available loan products and service to you.
SRP is very proud of its staff and considers them the key to the Credit Union’s success. They are professional, well trained
and committed to providing the best service possible to you our members. Your Credit Union is a good corporate citizen
throughout the CSRA and is actively engaged in many local community activities.
Finally, the most important component of SRP Federal Credit Union’s success is you the member. You, the member, are
the reason the Credit Union exists. All decisions, planning, products and other considerations are made with your interest
as the first and primary concern. The Board of Directors is committed to represent you and setting policies that will
Roy Geiselhart, Chairman
BOARD OF
DIRECTORS
EXECUTIVE
COMMITTEE
L to R: Roy Geiselhart, Chairman, Sandra DeVoe Bland, Vice Chairman,
Larry Laughlin, Treasurer, Larry Pridemore, Secretary
Sandra DeVoe Bland,
Chairman
FINANCE
FACILITIES
COMMITTEE
COMMITTEE
Chuck Goergen
L to R: Larry Laughlin, Chairman, Bruce Burns
Goldie Randle, Mary Thomas
L to R: Larry Pridemore, Chairman, Melinda Brinkley,
Lonnie Gordon, Louisiana Sanders
MEMBER
RELATIONS
COMMITTEE
Roy Geiselhart
2014 was truly a remarkable year for your Credit Union and I hope by
connection a good year for you also. In 2014, SRP Federal Credit Union
made $151,512,659.52 in consumer loans. Never in our history have we
had such a successful year. We made loans to over 13,000 people.
What caused this, I genuinely do not know. I would like to think it was some
spectacular idea of the staff, but I know better than that. It was the positive
efforts by you, our member, and your pent-up desires developed as you
worked through the great recession. I am thankful that SRP Federal Credit
Union was able to play a small part in your buying decisions. With your
continued trust in us and the efforts of our dedicated staff, I know that we can
produce another great year in 2015.
The safety of your credit union is the guiding principle in all decisions and
actions we take. I am proud to report the ultimate indicator of safety, the
capital to asset ratio, increased in 2014, even though our assets, which is the
denominator in the calculation, increased. Regulatory pressures increase
each day and more and more focus is required to ensure we comply with
each and every regulation and best practice. These things all have costs and
must be met in the day to day operation of your credit union.
As you are well aware the interest rate environment for the past several
years has been at record lows for a record period of time. The direct impact
to you is lower dividend rates and lower borrowing rates, one detrimental
to you and one beneficial to you. Your credit union feels the same pains as
we have been forced to invest much more money in investments having a
much lower return, than investing in loans to you our members which is our
Ed Templeton,
historical business model.
President
In 2014 we recognized that we were not a fully engaged player in the Real
Estate Loan Market. Consequently, we have not offered you, our members,
the products you want and deserve. We recognized our weakness and
developed a plan and have begun assembling the staff that will enable us to
bring world class residential loan products to you in 2015 and going forward.
We now offer VA, FHA, USDA, conventional, non-conforming and home
equity loan products. Since we enacted the plan late last fall we have seen
a significant improvement in our mortgage loan operation and look forward to
your increased awareness and use.
From Top: Ed Templeton, President,
Faith Ann Borst, VP of Lending,
Clifford Rushton, VP of Information Technology,
Woody Shuler, VP of Finance,
Steve Wilson, VP of Branches,
Jean Roper, VP of Business Services,
Ed Presnell, VP of Administrative Services
But, you know 2014 is in the rearview mirror now and 2015 lies ahead of
us. What will the economy do nationally and in our local market? The
CSRA area has the good fortune to have a nicely diversified employment
base. SRNS, the medical community and Fort Gordon, all present great
opportunities for our communities and you, our member. The most talked
about, currently, is the new Cyber Command at Fort Gordon. We look
forward to supporting you, our members, as you prosper in our robust
economic climate.
In conclusion, I would like to acknowledge and personally thank our staff.
Dedicated and committed to providing world class service to you. Being
human means we make human mistakes. We acknowledge our mistakes
and we learn from them. Our staff is committed to providing you professional
and personal service and I am so proud of each one of them.
Ed Templeton, President
PRESIDENT
& VP’S
SUPERVISORY
COMMITTEE
Terry Meeks,
Chairman
Edie Corley-Stone
Mark Utley
The Supervisory Committee’s mission is to ensure that the credit union’s operations conform to the Federal Credit Union Act and the rules and regulations of the
National Credit Union Administration (NCUA) and follows generally accepted accounting rules (GAP). The Committee’s responsibilities include ensuring all audits,
account verifications, and acceptable business and accounting practices are followed. The Committee responds to all member complaints forwarded through the NCUA.
We engaged Orth, Chalker, Murnane & Co., CPAs as our external auditors this past year. Their latest findings dated July 31, 2014 for the year ended March 31, 2014,
reported no areas of concern with the credit union’s financial reports or internal controls.
The yearly NCUA examination was performed on February 28, 2014 for the period ending December 31, 2013. From their review of financial statements, federal
regulations, and internal controls, the NCUA found no material problems in any areas of the credit union’s operations.
SRPFCU believes in safety first with our members’ data. The Pivot Group was hired this past year to review the credit union’s information technology security controls
and programs. They performed internal and external intrusion tests. They report no findings with the credit union’s data security.
The Supervisory Committee appreciates the dedicated work of the internal audit staff along with the rest of the employees of the credit union in maintaining SRPFCU’s
clean bill of health.
Terry Meeks, Chairman
2014.TreasurersReport_Layout 1 2/19/15 3:13 PM Page 1
COMPARATIVE BALANCE SHEET
The following financial statements present the financial position of SRP Federal Credit Union as of
December 31, 2014 and 2013 respectively, and the results of operations for the years then ended.
ASSETS
December 31
2014
2013
Increase / (Decrease)
$
%
Cash
Corporate Credit Union Investments
Investments
Loans, Net
Accrued Interest Receivable
P&E, Net
Share Insurance Capitalization
Other Assets
$ 49,857,728
$ 87,893,876
$ (38,036,148)
(43.28%)
512,317
4,966,306
(4,453,989)
(89.68%)
169,519,906
162,598,158
6,921,748)
4.26%)
391,609,172
334,194,542
57,414,630)
17.18%)
1,531,960
1,197,479
334,481)
27.93%)
31,522,480
32,780,215
(1,257,735)
(3.84%)
6,083,608
5,977,496
106,112)
1.78%)
41,229,891
24,476,847
16,753,044)
68.44%)
___________________________________________________________
TOTAL ASSETS
$691,867,062
$654,084,919
$37,782,143)
5.78%)
___________________________________________________________
LIABILITIES AND EQUITY
December 31
2014
2013
Increase / (Decrease)
$
%
Accounts Payable
Dividends Payable
Share Drafts
Shares
Share/IRA Certificates
Regular Reserve
Undivided Earnings
6,733,454
$ 6,252,359
$ 481,095)
7.69%)
20,462
23,555
(3,093)
(13.13%)
12.76%)
167,729,791
148,754,668
18,975,123)
324,849,759
298,963,590
25,886,169)
8.66%)
128,981,758
140,457,903
(11,476,145)
(8.17%)
–)
0.00%)
10,060,807
10,060,807
53,491,031
49,572,037
3,918,994)
7.91%)
___________________________________________________________
TOTAL LIABILITIES AND EQUITY
5.78%)
$691,867,062
$654,084,919
$37,782,143)
___________________________________________________________
$
2014.TreasurersReport_Layout 1 2/19/15 3:14 PM Page 2
COMPARATIVE INCOME STATEMENT
The following financial statements present the financial position of SRP Federal Credit Union as of
December 31, 2014 and 2013 respectively, and the results of operations for the years then ended.
OPERATING INCOME
December 31
2014
2013
Increase / (Decrease)
$
%
Interest on Loans
Income from Investments
4.40%)
$ 18,625,266)
$ 17,839,814)
$ 785,452)
1,327,726)
1,047,833)
279,893)
26.71%)
____________________________________________________
Earning Asset Income
Less: Dividend/Interest Expense
19,952,992)
18,887,647)
1,065,345)
5.64%)
1,540,360)
1,849,133)
(308,773)
(16.70%)
____________________________________________________
Net Interest Income
Other Income
OPERATING INCOME AFTER DIVIDENDS
18,412,632)
17,038,514)
1,374,118)
8.06%)
21,348,776)
20,459,909)
888,867)
4.34%)
____________________________________________________
$39,761,408)
$37,498,423)
$ 2,262,985)
6.03%)
OPERATING EXPENSE
December 31
Employee Compensation & Benefits
Occupancy & Equipment
Data Processing & Professional Services
NCUA Insurance and Assessments
Marketing & Promotion
Other Operating Expense
Total Operating Expense
Net Operating Income
Less Provision for Loan and Lease Losses
Non-Operating Items
CHANGE TO UNDIVIDED EARNINGS
Increase / (Decrease)
2014
2013
$
%
$ 17,611,603)
$ 16,246,798)
$ 1,364,805)
8.40%)
6,139,088)
5,979,203)
159,885)
2.67%)
4,126,309)
4,053,436)
72,873)
1.80%)
–)
478,200)
(478,200) (100.00%)
88.58%)
363,642)
192,827)
170,815)
4,065,068)
3,560,925)
504,143)
14.16%)
____________________________________________________
32,305,710)
30,511,389)
1,794,321)
5.88%)
____________________________________________________
7,455,698)
6,987,034)
468,664)
6.71%)
3,619,504)
1,829,087)
1,790,417)
97.89%)
82,800)
128,800)
(46,000)
(35.71%)
____________________________________________________
$ 3,918,994)
$ 5,286,747)
$(1,367,753) (25.87%)
____________________________________________________