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Management Report
A Year in Review
What’s new?
As we officially close our 65th anniversary year, a bit of
nostalgia fills our hearts knowing that our success couldn’t
have been achieved without our member’s loyalty and trust
as well as the hard work and dedication of our volunteers
and staff. In 2015, we stood strong with 204 million in assets and just under 5,000 members. Once again, our financial stability allowed us to give back to our member-owners, during our 65th anniversary year, a 6.5% year-end
dividend bonus totaling $294,728.00 as a special reward
for doing business with us. This represents an average of
approximately $60 per member! If you have a mortgage
with the Credit Union, however, the bonus would be much
more because it is calculated based on both loan interest
paid and share dividends earned. This is a reminder that
the more you utilize our products and services, the bigger
your bonus will be at the end of the year. Please keep this
in mind when you evaluate where to best finance your next
loan or deposit your savings.
We completed our newly expanded Columbia Plaza
branch, which provides us more space for our staff to
properly provide efficient and quality member services to
a growing membership. This 1800 square foot expansion
will include a conference room, which will provide us with
the ability to hold more frequent member educational and
staff training sessions in a convenient and comfortable setting. By having the right resources, talented staff, and technological tools to serve our members, we will be able to
meet your financial needs more efficiently while improving
productivity.
Although we have transformed to a full-service financial institution serving a diverse group of members located in 73
countries, our differentiating factor is our ability to serve
you in a way that makes you feel like family. Our goal is to
provide a memorable member experience through easy
and convenient access to our products and services at all
touch points. Through this experience we hope to help
build trust, confidence, awareness, and a cultivation of lifetime value that will consistently exceed your expectations.
However, we cannot achieve the ideal member experience without the appropriate resources; both human and
capital. You will therefore notice some upcoming changes
in 2016 which will demonstrate our commitment to delivering this member experience by enhancing our abilities
to serve our member’s financial needs.
One of the more specific areas in which we are focusing
on improving your member experience is in the mortgage
processing area. We reacted to your comments regarding
your mortgage experiences. We are fully committed to being there with you each step of the way to provide guidance through the intimidating process of purchasing your
first home or even refinancing a current home, so that you
have a smooth experience. We now have, on the credit
union staff, a Mortgage Loan Originator who is solely dedicated to serving our members. Our staff’s commitment is
not only to help you find the mortgage program that best
fits your individual financial needs, it’s much more than
that! It is to ensure that you are educated about the home
buying process, provided with all the details, and most of
all, are relieved of that common feeling that you are signing your life away when you purchase that dream home.
Our goal is to make the home buying experience memorable in a way that demonstrates why we are the best
financial services provider for you, and most importantly,
your family members and PAHO/WHO co-workers. Our
newly launched first time home-buyers program allows
many of you, who are starting to build credit by either just
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2015 Annual Report
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Management Report
beginning your professional life or relocating to the United States, to purchase a home with a minimal down payment requirement, no private mortgage insurance, and
even a credit reimbursement at closing. Furthermore, with
our Home Advantage realty service, you can search for a
home, find a participating program real estate agent, and
even receive a rebate at the end of the transaction.
In November 2015, we reissued over 1,500 EMV Chip enhanced debit cards to members residing outside of the
United States. Following this initial card reissue, as your
debit cards expire, you will receive a new EMV enhanced
card. These new cards offer an increased layer of fraud
protection and are becoming more commonly accepted
in the United States.
You asked for it and we delivered! In May 2016, we will
introduce our new PAHO/WHO FCU Rewards World MasterCard®, a credit card that earns you points for every purchase. Its Rewards are among the best in the industry. We
are so excited about this card that we would like to invite
you to compare the benefits and value of this card with
any other credit card you have. Approved applicants will
also enjoy additional benefits such as ID Theft Protection,
Extended Warranty, Concierge Services, and much more.
This new EMV chip enhanced credit card is offered in addition to our current Platinum MasterCard® program.
In 2015, we also focused on increasing credit union awareness within the PAHO/WHO community; including those
who have already retired. We have collaborated and supported various PAHO sponsored events reinforcing our
strong 65 year partnership. The financial wellness seminars that we held during the 2015 PAHO Wellness Week
demonstrated our commitment to improving the overall
health of PAHO/WHO staff. In addition, we attended and
sponsored several PAHO Association of Former Staff Mem-
bers (AFSM) events in order to strengthen our relationship
with those individuals who dedicated so many years to
both PAHO/WHO and the credit union. This means that
even though you may be retired and never had an account
with the credit union, it’s never too late to join – and your
membership lasts a lifetime! Lastly, we continue to present
financial education seminars on topics that include credit
reports, budgeting, saving for retirement, and home purchasing, so please take advantage of them and join us. We
are also open to suggestions, so if there’s a financial topic you would like information on, contact our staff and we
would be happy to arrange it.
As many of you may have realized, following the launch
of our new website in early 2015, we also revamped our
marketing efforts to create a brand that complements our
vision and mission. Our goal was to create a consistent
brand across all member accessible channels which is easily recognizable. Therefore, when you receive a postcard
in the mail or an eLert in your inbox, we want you to immediately know it’s coming from us! Our new website and
newly branded marketing efforts were also recognized by
the Maryland and DC Credit Union Association with the
designation of a 2016 Marketing Trailblazer Award in the
category of Best Special Project.
Down the Road
As technology continues to become more prevalent in our
daily lives, we are aware that your expectations of managing your finances in an almost instantaneous manner
will become the norm. We are therefore continuously improving our technology infrastructure to ensure that our
technological resources are continuously updated. We
also make protecting our member account information a
priority and realize that internet fraud makes us vulnerable
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Management Report
to cyber attacks. We continue to invest in the best possible
resources and tools to protect our member information
and to ensure that the way you access your accounts from
multiple channels is secured through various layers of
protection. Account and cyber fraud is often unavoidable;
however, you can minimize your risk of becoming a victim
by regularly checking your account balances and activity,
using complex passwords, changing your passwords regularly, not using public computers, and not responding to
emails or calls from unknown sources.
Although we are seeing some improvements in the global economy, we expect to see more modest and uneven
trends. The slowdown in the Chinese market in conjunction with lower commodity prices and the strain of emerging markets will continue to weigh down on global growth.
With the upcoming election in the USA and the talk of continuously rising interest rates, the housing and labor markets will strengthen. Oil prices have remained low, allowing oil supplies to keep up with demand. For those of you
that have considered purchasing or refinancing a home,
this is a great time to take advantage of low rates before
their anticipated interest rate rise later in the year.
of credit union membership with your family or co-workers
and encourage them to begin experiencing the rewarding
financial benefits that come with being a PAHO/WHO Federal Credit Union member-owner.
We appreciate your membership and look forward to continue serving you in the future.
Sincerely,
Luis Proaño
Chairman
Ricardo de la Torre
Treasurer
Miguel Boluda, Jr.
CEO
In closing
Our dedicated and experienced volunteer Board of Directors, leadership team, and operational staff will continue
to work together to deliver and implement competitive
products and services in the most effective and efficient
way possible. Whether you reside in the United States or
abroad, or are fully employed or retired, we know that your
diverse financial needs vary and we will make every effort
to exceed your expectations. We value your loyalty and
thank you for constantly serving as personal advocates of
our financial institution. We invite you to share the benefits
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2015 Annual Report
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2015 Financial Comparisons & Ratios
FINANCIAL PERFORMANCE COMPARISONS
2015
2014 CHANGE %
Assets
$204,627,779
$ 201,054,582
1.8%
Shares
$167,761,935
$ 164,629,541
1.9%
Loans, Net
$99,832,115
$96,962,468
3%
Reserves
$11,000,965
$11,000,965
0%
Undivided Earnings
$26,207,741
$
Gross Income
$6,017,599
$5,436,823
11%
Operational Expenses
$4,110,559
$3,662,319
12%
Provision For Loan
Losses Expense
$497,500
$128,000
289%
Interest Expense
$703,025
$609,426
15%
Net Income
$706,515
$
25,501,226
3%
1,037,078-32%
FINANCIAL RATIOS
20152014
Total Net Loans to Total Shares
Measures the level at which we lend out the member’s deposits
59.51%
58.90%
Total Net Loans to Total Assets
Measures the level of our lending within our membership
48.79%
48.23%
Net Worth to Total Assets
Measures retained earnings as determined under GAAP
18.18%
18.16%
0.35%
0.52%
Return on Average Assets
Measures net income in relation to average assets
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2015 Financial Comparisons & Ratios
ASSETS (in millions)
SHARES (in millions)
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2015 Financial Comparisons & Ratios
Net Worth (in millions)
DISTRIBUTION OF
GROSS INCOME
TOTAL: $6,017,599
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Report
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Supervisory Committee Report
The Supervisory Committee is an independent body
of volunteers appointed by the Board of Directors. The
role of the Supervisory Committee is to endeavor to
ensure the Credit Union’s ongoing financial stability
and operational soundness. The current makeup of the
PAHO/WHO FCU Supervisory Committee includes Silvia Schultz, Deanna Ner-Mardirossian, Gloria Morales,
Florencia Behrensen and myself. All federally chartered
credit unions are required to have a supervisory committee.
In practice, the Committee’s primary task is to oversee
the work of internal and external auditors in their performance of the annual financial statement audit and
regular reviews of internal controls.
It is my pleasure to report that the CPA firm of Rowles
& Co completed an independent audit of the Credit
Union’s 2015 financial statements and gave an unqualified opinion on those statements. This is the best kind
of opinion to receive because it signifies that, in the auditors’ opinion, the financial statements are presented
fairly and are free of material misstatement.
Furthermore, I am pleased to report that the CPA firm
of Orth, Chakler, Murnane & Co carried out multiple reviews throughout 2015, which have served to strengthen internal controls and to ensure that the Credit Union
remains compliant with regulatory requirements.
The Supervisory Committee also exists to address
member complaints. If you have a concern regarding
your accounts or transactions, which has not been resolved to your satisfaction by Credit Union staff and
management, feel free to approach us in person or by
phone or e-mail. We will make our best effort to facilitate a resolution.
Tyson Kidder
Supervisory Committee
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Report of Independent Auditors
Supervisory Committee
PAHO/WHO Federal Credit Union
Washington, D.C.
Report of Independent Auditors on Summary Financial Statements
The accompanying summary financial statements, which comprise the summary balance sheets as of December
31, 2015 and 2014, and the summary statements of income for the years then ended, are derived from the audited financial statements of PAHO/WHO Federal Credit Union as of and for the years ended December 31, 2015
and 2014. We expressed an unmodified audit opinion on those audited financial statements in our report dated
April 21, 2016.
The summary financial statements do not contain the statements of comprehensive income, changes in members’ equity, cash flows, and all the disclosures required by accounting principles generally accepted in the
United States of America. Reading the summary financial statements, therefore, is not a substitute for reading
the audited financial statements of PAHO/WHO Federal Credit Union.
Management’s Responsibility for the Summary Financial Statements
Management is responsible for the preparation of the summary financial statements on the basis described in
Note 1 of PAHO/WHO Federal Credit Union’s audited financial statements.
Auditor’s Responsibility
Our responsibility is to express an opinion about whether the summary financial statements are consistent, in all
material respects, with the audited financial statements based on our procedures, which were conducted in accordance with auditing standards generally accepted in the United States of America. The procedures consisted
principally of comparing the summary financial statements with the related information in the audited financial
statements from which the summary financial statements have been derived, and evaluating whether the summary financial statements are prepared in accordance with the basis described in Note 1 of the audited financial
statements. We did not perform any audit procedures regarding the audited financial statements after the date
of our report on those financial statements.
Opinion
In our opinion, the summary financial statements of PAHO/WHO Federal Credit Union as of and for the years
ended December 31, 2015 and 2014, referred to above are consistent, in all material respects, with the audited
financial statements from which they have been derived, on the basis described in Note 1 of the audited financial statements.
Baltimore, Maryland
April 11, 2016
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Condensed Statements of Financial Condition
December 31, 2015 and 2014
ASSETS
2015
2014
$20,886,922
$13,730,984
Loans to members, net
99,832,115
96,962,468
Investment securities available for sale
61,112,612
64,093,303
Investment securities held to maturity
7,603,184
2,334,276
Certificates of deposit in other financial institutions
5,245,000
14,210,000
NCUSIF Deposit
1,322,073
1,333,721
Perpetual contributed capital
853,850
853,850
Accrued interest receivable
442,553
433,175
Loan receivable - split dollar policy
827,739
312,212
Credit Union owned life insurance
1,675,876
2,130,000
Property and equipment
1,298,080
967,133
531,025
-
2,996,750
3,693,460
$204,627,779
$201,054,582
Cash and cash equivalents
Foreclosed real estate
Prepaid expenses and other assets
TOTAL Assets
These summary financial statements do not constitute a complete presentation. The complete set of audited financial statements, including the
statements of comprehensive income, changes in members’ equity, and cash flows, and the notes to the financial statements, are available at the
Credit Union office during normal hours of operation.
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Condensed Statements of Financial Condition
December 31, 2015 and 2014
LIABILITIES AND MEMBERS’
EQUITY LIABILITIES
2015
2014
$167,761,935
$164,629,541
653,002
548,673
168,414,937
165,178,214
Regular reserves
11,000,965
11,000,965
Undivided earnings
26,207,741
25,501,226
419,012
480,297
Unrealized pension valuation
(1,414,876)
(1,106,120)
TOTAL Members’ equity
36,212,842
35,876,368
$204,627,779
$201,054,582
Members’ share accounts
Accrued expenses and other liabilities
TOTAL Liabilities
MEMBERS’ EQUITY
Accumulated other comprehensive income
Unrealized gain on investments
TOTAL Liabilities and
members’ equity
These summary financial statements do not constitute a complete presentation. The complete set of audited financial statements, including the
statements of comprehensive income, changes in members’ equity, and cash flows, and the notes to the financial statements, are available at the
Credit Union office during normal hours of operation.
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Condensed Statements of Income
Years Ended December 31, 2015 and 2014
INTEREST INCOME
Interest on loans
Interest on investments
TOTAL Interest income
2015
2014
$3,883,876
1,311,382
$3,662,126
1,168,225
5,195,258
4,830,351
INTEREST EXPENSE
Dividends on members’ shares
703,025
609,426
Net interest income
PROVISION FOR LOAN LOSSES
Net interest income after provision for loan losses
NON-INTEREST INCOME
Card services
Gain on disposition of foreclosed real estate
Other
TOTAL Non-Interest Income
NON-INTEREST EXPENSE
Compensation and benefits
Office occupancy
Office operations
Loan servicing
Professional and outside services
Other
TOTAL Non-interest expense
NET INCOME
4,492,233
4,220,925
497,500
128,000
3,994,733
4,092,925
299,116
-
523,225
280,684
60,683
265,105
822,341
606,472
1,896,115
262,244
465,386
214,906
951,310
320,598
1,564,654
219,569
427,047
171,646
930,974
348,429
4,110,559
3,662,319
$706,515
$ 1,037,078
These summary financial statements do not constitute a complete presentation. The complete set of audited financial statements, including the
statements of comprehensive income, changes in members’ equity, and cash flows, and the notes to the financial statements, are available at the
Credit Union office during normal hours of operation.
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Benefits of Banking with Us
No Monthly-Fee Checking
• Dividend-earning Checking
Banking Convenience Where
You Live, Work & Travel
Savings & Investments
• Over 30,000 Free ATMs nationwide
through CO-OP Network
• Savings Accounts
• Special Savings Accounts
• Certificates
• Individual Retirement Accounts
Affordable Loans & Refinancing
• CU Service Centers Shared Branching with
over 5,000 shared credit union
branches nationwide
• Vehicle Loans - Car Buying Service
• MasterCard® Platinum Credit Cards
• Higher Education Loans
• Personal Loans
• Mortgage Loans - Home Realty Service
• Home Equity Lines of Credit
• Recreational Vehicle Loans
• Overdraft Protection Lines of Credit
Additional Resources & Services
• Financial Counseling and Education
• Visa® Gift Cards
• Money Orders
• Wire Transfers
• Notary Public
24/7 Banking / Going Green
• Online Banking
• Mobile Banking
• Remote Deposit
• eStatements and ePay
• eLerts
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PAHO / WHO
Board of Directors
Executive Staff
Luis Proaño
Chairperson
Miguel Boluda, Jr.
Chief Executive Officer
Isabel Vigil
Vice Chairperson
Shaun Ghaffouri
Vice President of Finance
Ricardo de la Torre
Treasurer
Patricia V. Ilijic
Executive Vice President
Ana Maria Falquez
Secretary
Antonio Hernandez
Director
Araceli Iraheta
Director of Compliance
& Risk Management
Eduardo Kalivoda
Director
Christina Marsigli
Director
Marella Nardotti
Director of Marketing
& Administrative Services
Federico Ortiz
Director
Luis Velásquez
Director
Supervisory Committee
Tyson Kidder
Chairperson
Deanna Ner-Mardirossian Member
Gloria Morales
Member
Sylvia Schultz
Member
Florencia Behrensen
Member
Staff
Jairol Arias
Gisella Lanzone
Esteban Arze
Alberto Meneses
Soledad Casals
Monica Mora
Wilbur Gil Zark Lucas Puh
Yaribeth Hart
Belinda Vasquez
Mark Isquith
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Branch:
Columbia Plaza, 506 23rd Street, NW
8am to 3pm; M, T, Th & F
8am to 1:30pm; Wednesday
Website: www.PAHOfcu.org
E-Mail: FCU@PAHOwhofcu.org
Telephone: 202-974-3453
1-866-724-6328 (toll-free)
Fax: 202-659-4513
Mailing Address:
2112 F Street, NW, Suite 201
Washington, DC 20037-2761
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