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HAPO 2014
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O R G A N I Z AT I O N A L C O M M I T M E N T
BE IN THE MOMENT
We commit to listening to our
members to clearly understand
what’s needed and to respond
efficiently and professionally
every time.
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6 2 ND A N N U A L R E P O R T
HAPO 2014
O R D E R O F B U S I N E S S / 6 2 ND A N N U A L M E E T I N G
W E D N E S D A Y, A P R I L 2 2 n d , 2 0 1 5
1. Call to Order – William Tanner
2. Reading of Minutes, 61 st Annual Meeting – Ken Bays
3. A Message from HAPO Leadership – David Schulz & William Tanner
4. Supervisory Committee Report – Darrel Stafek
5. Unfinished Business – William Tanner
6. New Business – William Tanner
A. Other New Business
8. Door Prize Drawing – Crystal Contreras, Annie Bixler & Carlo Chavez
HAPO 2014
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6 2 ND A N N U A L R E P O R T
HAPO 2014
THE OFFICIAL SPONSOR OF SUMMER
Since trademarking the “Official Sponsor of Summer®” in 2009,
HAPO Community Credit Union has brought several major events to the
Tri-City, Yakima, Sunnyside, Walla Walla and Hermiston communities.
However, in 2014, we took “The Official Sponsor of Summer®” to an
entirely new level by sponsoring the Tri-City Water Follies Unlimited
Hydroplane race – the HAPO Columbia Cup. This iconic Tri-City Summer
event takes place the last full weekend in July, and has since 1966.
A glance at the economic impact of the HAPO Columbia Cup and
HAPO “Over the River” Air Show in our community:
- The HAPO Columbia Cup and HAPO “Over the River” Air Show
bring in approximately $2,250,000 of visitor spending in our
community
- Weekend attendance is 65,000 – 70,000 fans
- Approximately 6,500 rooms at area hotels and motels during the
weekend
Capturing the title sponsorship of the most recognized summer event
in the Tri-City community continues to solidify HAPO as “The Official
Sponsor of Summer®.” The HAPO Columbia Cup and HAPO “Over
the River” Air Show were a great success in 2014. We encourage
families and loyal race fans to join us for this thrilling weekend on the
Columbia River. HAPO is dedicated to making the HAPO Columbia Cup
and “Over the River” Air Show family-friendly for all to enjoy.
Throughout 2014, HAPO Community Credit Union remained
committed to bringing quality events for families to our communities.
Whether it was sponsoring the Hot Shots 3-on-3 tournament in Yakima
during the Summer or Kadlec 4 Kids-A-Thon in the Tri-Cities during the
Fall, we’re committed to enriching the lives of our neighbors, family
and friends.
In addition to the many events we sponsor during the year, HAPO
employees make it their priority to give back to a variety of charities
and causes around them. Between volunteering their free time
and donating their expertise, HAPO employees gave back in 2014.
They gave their time to raise funds for families during the holidays,
volunteered for Junior Achievement, donated a helping hand to
prepare for the Run for Ribbons race, gave blood at one of our many
blood drives for the Red Cross and more.
Throughout the year, HAPO works with many partner organizations to
make it happen. We’re humbled by the incredible outreach within our
community and the number of organizations we partner with to make
our community a better place to live!
In 2014 we supported the following organizations and events:
®
THE OFFICIAL SPONSOR OF
SUMMER® EVENTS
• HAPO Columbia Cup
• HAPO “Over the River”
Air Show
• Live @ 5 Summer
Concert Series
• Cool Desert Nights
• River of Fire Festival
• Grand Old 4th of July
Parade
• Free Ice Cream Fridays
• Yakima Cinco de Mayo
Fiesta
• Gap2Gap Dash
• Yakima 4th of July
• Hot Shots 3-on-3
Basketball Tournament
• Sunnyside Cinco de Mayo
Fiesta
• National Night Out
• Miss Sunnyside 5k Sun Run
• Hermiston Family Funfest
• Takin’ it to the Streets
3-on-3 Basketball
Tournament
• Relay for Life
• Walla Walla Sweets
Baseball
SPONSORSHIPS,
DONATIONS AND EVENTS
• Tri-Cities Cancer Center
• CBC Foundation
• Kadlec Foundation
• MESA
• Kadlec 4 Kids-a-Thon
• Run for Ribbons
• The Arc of Tri-Cities
• Please Don’t Quit
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Foundation
After School Matters
Junior Achievement
Girl Scouts Leadership
Kennewick Man &
Woman of the Year
Tri-Citian of the Year
Real Heroes Breakfast
Gourmet Gala March of Dimes
Martin Luther King Jr.
Jazz Event
Faith Assembly Missions
Sponsor
First Night Tri-Cities
12 Days of Giving Red Cross
Hermiston Festival of Trees
Sunnyside Festival of Trees
Sunnyside Chamber
Awards Dinner
Cuisine de Vin
Coats for Kids
Toys for Kids
Habitat for Humanity
Kadlec Foundation
Golf Classic
The Arc of Tri-Cities
Golf Tournament
Tri-Cities Cancer Center
Golf Tournament
Eerkes Memorial Golf
Tournament
TCRCC Golf Classic
CI Golf Challenge
and Gala
• ALS Ice Bucket Challenge
• Fall Fest
HAPO 2014
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F I N A N C I A L S TAT E M E N T S
C OMPAR ATIV E BALANCE SHEETS*
As of December 31, 2014 and 2013
A S SETS
Cash and Cash Equivalents
Investments – Net
Loans to Members – Net
NCUSIF Deposit
Land and Buildings – Net of Depreciation
Furniture and Equipment – Net of Depreciation
Other Assets
TO TAL ASSETS
L I A B IL ITIES, DEPOSI TS & MEMBERS’ EQUI TY
Liabilities
Borrowed Funds
Accrued and Other Liabilities
Deposits
Savings Accounts
Checking Accounts
Money Market Accounts
Certificates of Deposit
IRA Accounts
Members’ Equity
Retained Earnings
Other Comprehensive Income
ASSETS (in millions)
4
2010
2011
2012
6 2 ND A N N U A L R E P O R T
2013
2013
$79,414,319
2,414,783
1,047,911,915
10,675,370
51,489,722
9,086,647
37,538,895
$52,598,504
927,740
1,083,097,918
10,224,987
52,893,750
10,241,978
34,834,790
$1,238,531,651
$1,244,819,667
–
$19,682,538
19,682,538
$50,000,000
19,538,051
69,538,051
244,282,395
136,907,104
282,284,840
446,450,790
11,809,728
1,121,734,857
220,040,071
125,968,478
267,586,473
461,294,356
11,241,748
1,086,131,126
96,337,330
(7,186,840 )
89,150,490
104,598,450
(7,484,194)
97,114,256
TO TAL L IAB IL ITI ES & MEMBERS’ EQUI TY
$1300
$1250
$1200
$1150
$1100
$1050
$1000
$950
$900
$850
$800
$750
$700
$ 0
2014
MEMBER LOANS (in millions)
2014
HAPO 2014
$1200
$1150
$1100
$1050
$1000
$950
$900
$850
$800
$750
$700
$650
$600
$ 0
$1,244,819,667
$1,238,531,651
2010
2011
2012
2013
2014
MEMBER DEPOSITS (in millions)
$1200
$1150
$1100
$1050
$1000
$950
$900
$850
$800
$750
$700
$650
$600
$ 0
2010
2011
2012
2013
2014
S TATEMENTS O F OPERATI ON*
For the years ended December 31, 2014 and 2013
O P ER ATING INC OME
Interest on Member Loans
Income from Investments
Member Dividends
Interest on Borrowed Funds
Net Interest Income
Provision for Loan Losses
Other Operating Income
Total Operating Income
O P ER ATING EX PE NSES
Employee Costs
Facilities Costs
Operational Costs
Marketing and Community Giving
Loan Servicing
Professional/Outside Services
NCUA Assessments
Other Operating Expenses
Total Operating Expenses
Net Operating Income
$48,590,979
169,999
(6,751,399 )
(234,643 )
41,774,936
(4,748,292)
16,120,600
53,147,244
$50,076,231
63,993
(6,929,247 )
(244,278 )
42,966,699
(5,035,474 )
14,593,135
52,524,360
23,828,613
3,459,191
9,590,283
1,296,290
2,525,860
1,548,482
–
1,999,984
44,248,703
8,898,541
22,897,190
3,529,520
9,296,236
1,222,751
2,265,817
1,550,529
818,000
1,149,672
42,729,715
9,794,645
(637,421)
444,324
NON-O PER ATING I NCOME (LOSS)
NET INCOME
$8,261,120
DISTRIBUTION OF 2014 INCOME
Retained
Earnings
13%
2013
2014
Members
18%
Operating
Expenses
69%
DISCLOSURE TO MEMBERSHIP: BOARD OF DIRECTORS COMPENSATION SCHEDULE
As permitted by law and the Credit Union’s Bylaws,
HAPO provides reasonable compensation to the
Board of Directors for their service to the Credit
Union. An annual stipend is payable in quarterly
installments in recognition of the education and
time requirements that are necessary and expected
of board members, who set the general direction
and control of the Credit Union.
Compensation Schedule for 2015
As required by law, the members of the Credit
Union shall be informed of the compensation
provided to Directors.
Compensation Paid in 2014
(September-December)
Compensation Plan. The annual stipend ranges
between $15,000 and $20,000 for Board Members and is based on leadership positions held.
* The accompanying financial
statements are unaudited.
$10,238,969
Director & Board Chair .................................. $20,000
Director & Board Secretary ............................ $18,000
Director & Supervisory Committee Member.... $16,000
Director ........................................................ $15,000
William Tanner .............................................. $20,000
Ken Bays ....................................................... $18,000
Bill Tyler ........................................................ $15,000
William Clarke .............................................. $15,000
Ken Gale ...................................................... $15,000
Ken Hohenberg ............................................ $15,000
Rich Cummins .............................................. $15,000
William Tanner ................................................ $6,666
Ken Bays ......................................................... $6,000
Bill Tyler .......................................................... $5,000
William Clarke ................................................ $5,000
Ken Gale ........................................................ $5,000
Ken Hohenberg .............................................. $5,000
Rich Cummins ................................................ $5,000
HAPO 2014
6 2 ND A N N U A L R E P O R T
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MINUTES OF THE 61
ST
ANNUAL MEETING
AP RIL 17 T H , 2 01 4
The 61st Annual Meeting of HAPO Community Credit Union was
called to order by Chairman of the Board, William Tanner at 6:30pm,
Thursday, April 17, 2014, in the Richland High School’s cafeteria.
There were 43 members present.
William Tanner asked if there were any corrections to be made to the
minutes of the 60th Annual Meeting. As there were no corrections,
it was moved and seconded to dispense with the reading of the
minutes and to accept them as printed. The motion carried.
Board Chairman William Tanner introduced the Board of Directors
and delivered the “Chairman’s Message” which included recognition
of our ongoing efforts to work closely with our State and National
Regulators to demonstrate our continued tradition of financial
strength, safety and soundness.
Mr. Schulz, President and CEO of HAPO Community Credit Union,
thanked all in attendance and delivered the “President’s Message” to
the membership. This included an update and report of meeting or
exceeding all financial goals of 2013.
Darrell Stafek, Chairman of the Supervisory Committee, introduced
the members of the Supervisory Committee and read the Supervisory
Committee Report and Nominating Committee Report. The
Statement of Nomination and Declaration of General Consent was
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HAPO 2014
read. Three Supervisor Committee members were re-appointed:
David Beach to a three year term to expire in April 2017; Bill Phillips to
a two year term to expire in April 2016 and; Roy Renner to a one year
term to expire in April 2015. Supervisory Committee Chairman Darrel
Stafek was not up for re-election and the current term is to expire
April 2015.
Three Board of Directors were nominated, approved and re-appointed
for new terms; Ken Bays, Bill Clarke and Rich Cummings all to serve a
new three year term to expire in April 2017.
Chairman Tanner asked if there was any unfinished business or any
new business and there was none. Mr. Tanner turned the floor over
to Mr. Schulz to answer questions from the members and concluded
by introducing Crystal Contreras and Silvia Idrovo for the drawing of
door prizes.
It was moved and seconded that the meeting be adjourned. The
motion carried and the meeting was adjourned at 7:15pm.
William Tanner
Chairman
A MESSAGE FROM HAPO LEADERSHIP
Vision. Being able to look down the road and predict one year, or
five years, or even longer for an organization and then being able
to come up with a viable, strategic plan is both a talent and an
art form. The leadership of HAPO, which encompasses its Board
of Directors and the Top Management, which includes its CEO,
Executive Vice President and several Senior Vice Presidents has been
uniquely challenged this past year. Our leadership has maintained a
long standing vision for robust annual growth for the credit union.
Continual quality growth is an important element to the health and
survivability for any company. In our case, competition has always
been fierce for deposit dollars and for a proportionate market share
for lending those dollars out. Historically, it has been competitors
who have influenced our vision more so than many other external
factors. Today, while competitors continue to influence our vision,
all financial institutions are attempting to predict and brace for the
ever increasing anticipation of a rising interest rate environment and
its potential impact. It was this dominating force which caused us
to temporarily halt our otherwise abundant growth for the 2014
calendar year. If we were to sum up 2014 in one word it might
be “preparation”. How well we prepare ourselves today for the
unknowns of tomorrow is most assuredly at the forefront of our
State and National Examiner’s annual visits. Our Leadership must
continue to demonstrate, year in and year out, that our vision is wellthought out and our ability to carry out that vision is well-executed.
Each year brings with it a whole host of new challenges as well as
opportunities to examine. As the Leadership of the credit union
continues to refine its vision for the future and balance it against
a wide variety of conditions and constraints, we will continue to
evaluate what makes the most sense for our credit union, which may
include a short term sacrifice in growth for the assurance of longer
term safety and soundness. One role of our Leadership is to preserve
the organization, not only for the next five years, but for much, much
longer. What is the vision for HAPO in that future? Each year we get
the chance to answer that question.
With 2014 well behind us and with over a quarter of 2015 already
gone, it is both interesting and a little saddening to be reminded
how quickly time continues to pass us by. So many of the things that
made up the larger vision for 2014, whether fulfilled or not, have
long come and gone. Even as the Leadership attempts to predict 2015
or further, our central purpose of existing is to provide our members
with a place to safely keep their money at a fair rate of return and the
opportunity to obtain affordable loans, which help improve the quality
of life of our members and that of their families.
HAPO continues to prosper, in a traditional sense, with an ever
increasing number of new members, new products and technologies
and its community involvement. In other words, our credit union
continues to flourish with its ability to meet the needs of our members
with a top-notched staff who are ready to show you their genuine
interest in providing the best service possible.
We are honored to have the responsibility of bringing together a
vision for HAPO. Our Leadership team has worked together now
for a number of years. In fact, one of our greatest strengths is the
teamwork of leadership for the ultimate benefit of our members.
Once again, on behalf of the entire Board of Directors, Executive
Management and entire HAPO staff, we thank you for your continued
loyalty and support of our great credit union. After all, collectively,
we all are the credit union.
William Tanner
Chairman
David M. Schulz
President/CEO
HAPO 2014
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SUPERVISORY COMMITTEE REPORT
In accordance with the Washington State Credit Union Act and the
rules and regulations of the National Credit Union Administration
(NCUA), the Supervisory Committee is required to “Perform or
arrange for a complete annual audit of the credit union and a
verification of members’ accounts.” To satisfy these requirements
the Supervisory Committee contracted with our certified public
accounting firm, Moss Adams, LLP, to perform an audit of our
financial statements.
The Supervisory Committee also approves the annual comprehensive
internal audit plan and regularly meets with the credit union’s Vice
President of Internal Audit regarding the results of the activities of the
Internal Audit Department.
As a result of the audit, Moss Adams, LLP issued an Independent
Accountants’ Report of the credit union’s financial statements as of
and for the fiscal year ended June 30, 2014. Their report included an
unqualified opinion that those financial statements presented fairly,
in all material respects, the credit union’s financial position as of June
30, 2014 and the results of its operations and its cash flows for the
year then ended, in accordance with accounting principles generally
accepted in the United States of America.
As Chairman of the Supervisory Committee during 2014, I wish
to thank the other Committee members for their many hours of
volunteer service during the past year, as well as HAPO’s staff and
management for their assistance.
The Supervisory Committee is here to serve as the oversight arm of
the credit union. Members may contact the Committee confidentially
or they may directly contact any of the Committee members.
Respectfully submitted,
Darrel Stafek
Chairman
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HAPO 2014
OFFICIALS
BOARD OF DIRECTO RS
William Tanner – Chairman
William Tyler – Vice-Chairman
Ken Bays – Secretary
Ken Gale – Treasurer
William Clarke – Director
Ken Hohenberg – Director
Rich Cummins – Director
SUP ERVISORY C O M M I TTEE
Darrel Stafek – Chairman
David Beach
Bill Phillips
Roy Renner
NO M I N AT I N G C O MMI T T E E
Darrel Stafek – Chairman
Leonard Davis
David Beach
EXECUT I V E S TA F F
David Schulz – President / CEO
Steve Anderson – EVP / COO
John Schnellbach – SVP / CFO
Carolyn O’Niel – SVP / CDO
HAPO 2014
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MAIN LINE
509.943.5676
MORT GAGE
DIVISION
509.946.2044
w w w. H A P O . o r g
LOCATIONS IN WASHINGTON & OREGON
For hours and maps to all our branches, please visit www.hapo.org
RICHLAND - MAIN BRANCH
601 Williams Blvd.
Richland, WA 99354
YAKIMA - CASTLEVALE
903 Seattle Slew Run
Yakima, WA 98908
RICHLAND MEADOW SPRINGS
631 Gage Blvd.
Richland, WA 99352
YAKIMA - TERRACE HEIGHTS
3001 Stonewood Ct.
Yakima, WA 98901
RICHLAND - QUEENSGATE
3034 Duportail St.
Richland, WA 99352
KENNEWICK - UNION ST.
4 North Union
Kennewick, WA 99336
KENNEWICK - SOUTHRIDGE
4851 W. Hildebrand Blvd.
Kennewick, WA 99336
KENNEWICK HAPO BUSINESS COMPLEX
7601 W. Clearwater Ave.
Kennewick, WA 99336
PASCO - BY THE AIRPORT
2701 North 20th Ave.
Pasco, WA 99301
PASCO - WEST PASCO / RD 68
4902 Road 68
Pasco, WA 99301
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YAKIMA - NOB HILL
6401 W. Nob Hill Blvd.
Yakima, WA 98908
SUNNYSIDE - DOWNTOWN
322 South 6th Street
Sunnyside, WA 98944
HERMISTON
1905 N. 1st Street
Hermiston, OR 97838
WALLA WALLA COLLEGE PLACE
2376 Taumarson Rd.
Walla Walla, WA 99324