2018 IHMVCU Annual Report

ANNUAL ‘18 REPORT

Move Up with us.

What does it mean to Move Up on your financial journey? It’s finding a friend to guide you on the way to success – whatever that looks like to you. We know financial success is different for everyone. And for your credit union, success in 2018 looked a little something like this. . .

1 ANNUAL REPORT | 2018

We became Pathfinders for 16,567 folks in 2018, bringing our total membership to

128,234 IHMVCU MEMBERS

We broke ground on our new

HEADQUARTERS OPENING IN 2020 In April, we broke ground on our new 90,000 square-foot headquarters, located at 2500 River Drive in Moline, and celebrated the installation of one of the final steel beams in August. Since construction started, more than 500 individual construction tradespeople have contributed to this project with 54,700 safe hours logged. The building is scheduled to open in early 2020.

90,000 sq. ft.

500 tradespeople 54,700 safe hours logged

3 ANNUAL REPORT | 2018

Our Member Advantage Program

SAVED MEMBERS $127,858 Members saved big on baseball tickets, hockey games, museums, concerts, swimming pools, haunted houses and so much more!

5 ANNUAL REPORT | 2018

4,300 lbs.

SENSITIVE DOCUMENTS SHREDDED You kept it safe and secure at our 2018 shred event.

Members brought in 4,300 pounds of sensitive documents to be shredded. That’s a 44% increase from 2017!

2,856

IHMVCU FROSTED COOKIES Together in 2018 we ate 2,856 frosted IHMVCU cookies (down from the 3,480 in 2017, but our waistline needed it), and drank 1,000 cups of hot chocolate at the Festival of Trees parade. And we won’t talk about the 253 pounds of candy you collected at community parades and events.

$60

MILL

We got you moving with $

7 ANNUAL REPORT | 2018

02 LION

$602,297,072 in loans.

1,006

HOME BUYERS Over 1,000 members found homes through IHMVCU, totaling $137,923,820 in mortgages in 2018.

19,511

PEOPLE HIT THE ROAD IHMVCU put nearly 20,000 people into their new autos.

394

SMALL BUSINESSES FUNDED IHMVCU funded 394 small business looking for financing, totaling $35,628,025.

We expanded our field of membership by adding seven new counties. Membership is now open to people who live and work in 49 counties, stretching from Des Moines to the western suburbs of Chicago; and from the northern counties of Illinois to Bloomington-Normal.

Polk

Jasper

Poweshiek

D

Benton

Linn

Iowa

Johnso

Washington

Hen

Le We have EXPANDED our field of

MEMBERSHIP

BY ADDING 7 NEW COUNTIES

9 ANNUAL REPORT | 2018

Delaware

Dubuque

McHenry

Jo Daviess

Jackson

Jones

n

Ogle

Carroll

Clinton

Cedar

on

Lee

Whiteside

Scott Muscatine Rock Island

Putnam

Stark n

erso

Marshall

Knox Warren

Peoria

nd

Des Moines

LaSalle

Woodford

He

ee

Bureau

Mercer

Louisa

nry

Henry

DeKalb Kane

Hancock

McDonough

Schuyler

Fulton

Tazewell

McLean DeWitt

DuPage

YOU SPENT YOUR MONEY YOUR WAY 11 ANNUAL REPORT | 2018

18,526,483 DEBIT CARD TRANSACTIONS

We’re talking

$415,434,318

in purchases.

1,868,668 CREDIT CARD TRANSACTIONS Totaling

$105,137,410

7,622

MEMBERS ENROLLED IN GOOGLE PAY, SAMSUNG PAY OR APPLE PAY with an IHMVCU debit or credit card.

Can we call this...

THE YEAR OF THE GIANT CHECK?

Giving away giant checks never gets old for us – whether supporting a deserving cause like Maddie’s Closet, surprising our top Cash for Class Scholarship winners during “fake” interviews or showing up unannounced to award $10,000 to our Make My Mortgage Payment Sweepstakes winner. It’s hugely satisfying knowing we’ve made a difference in our members’ lives.

13 ANNUAL REPORT | 2018

We contributed $184,283 in donations and sponsorships.

On a corporate level, we contributed to organizations like: Big Brothers Big Sisters

Putnam Museum

Boys & Girls Club

River Bend Foodbank

Galesburg Booster Club

TEDxDavenport

WQPT

United Way

It was an honor to support the USO of Illinois and nearly

54,000 QUAD CITY MILITARY SERVICE MEMBERS AND THEIR FAMILIES

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1,100 HOT DOGS

Team IHMVCU served 1,100 hot dogs at their monthly Frank n’Fridays, boxed up 100 care packages to send overseas, and gave military spouses and kids a night out.

YOU CAME TO SEE US A LOT...

Together we completed

2,003,018 IN-BRANCH TRANSACTIONS

17 ANNUAL REPORT | 2018

8

BUT YOU ALSO BANKED ON YOUR OWN TIME...

53,876

USED ONLINE BRANCH TO ACCESS THEIR FINANCES

40,712

USED IHMVCU MOBILE APP FOR ON-THE-G0 BANKING That’s 6,406 more mobile app users than in 2017!

125,630

CHECKS WERE DEPOSITED WITH THE MOBILE APP Totaling $41,190,417! A 35% increase in users from 2017.

YOU HAD SOME NICE THINGS TO SAY ABOUT US...

I have followed Sherry H. through 6 locations. She is smart, compassionate and caring. She has helped my wife and I buy 3 homes, countless cars and campers. She recently helped my nephew buy his first home! I know we are not her only customer, but she makes us feel like it. At IHMVCU, you’re family!

SHANE D.

I LOVE the ne w Rock Island Branch drive u p kiosks! Wha t a cool and tec hy new additio n!

They really do enhance your customer’s ex perience! Nev er belonged to a nother bank a nd never had a re ason to switch !

Thanks IHMVC U!!

M EG L.

19 ANNUAL REPORT | 2018

We were trying to buy a new vehicle and nobody else would consider us.

IHMVCU has gone above and beyond to help us. We were trying to buy a vehicle and nobody else would consider us, but you saw a member who needed a chance. IHMVCU got us in to a nice vehicle with fair terms and then when I went through a rough financial situation, I was helped in many ways by the kind and knowledgeable staff there. I made a lot of bad financial decisions when I was younger, and IHMVCU looked past that and gave us a chance. I feel like I’m a person, not just an account.

JAMES M.

...within five minutes my loan was being processed.

I needed a loan to consolidate two very high interest loans. I filled out an application online, within minutes I received a phone call from Jeremy W., within five minutes my loan was being processed. 20 minutes later this gentleman called back and I had the loan. This process was quick and easy, I got him the loan information from the two loans and signed my name on my new loan online, this new loan saves me $451 a month.

Thank you so much for helping me. I have banked with IHMVCU for years, and I will be forever grateful.

ANNETTE F.

Statement of Financial Income

REPORT

Balance Sheet ASSETS

2018

2017

$1,123,856,846

$1,047,177,899

$3,570,914

$5,120,600

$(11,899,173)

$(7,576,069)

$47,570,413

$64,122,896

$93,572,356

$93,920,262

$3,291,244

$2,814,805

$300,000

$300,000

$2,695,287

$2,706,010

$17,923,669

$15,168,357

$10,072,415

$9,150,924

$48,288,523

$33,528,740

$1,339,242,494

$1,266,434,424

2018

2017

$760,677,367

$733,882,252

$386,490,590

$337,538,881

$342,917

$257,789

$78,041,486

$90,948,158

$1,225,552,360

$1,162,627,080

$18,545,372

$18,545,372

$800,000

$1,000,000

$83,374,875

$74,434,526

Other Reserves

$(164,245)

$887,097

YTD Net Income

$11,134,132

$8,940,349

$113,690,134

$103,807,344

$1,339,242,494

$1,266,434,424

Loans to Members Accrued Interest Reserve for Loan Loss Cash Government Securities Other Investments Investments in Alloya Corporate CU

Furniture & Fixtures (net of depreciation) Building & Land (net of depreciation) NCUA Insurance Fund Other Assets TOTAL ASSETS

LIABILITIES & MEMBER EQUITY Shares of Members Term Deposits Accrued Certificate Dividends Payable Other Liabilities TOTAL LIABILITIES AND SHARES Regular Reserve Secondary Capital Undivided Earnings

TOTAL MEMBERS EQUITY TOTAL LIABILITIES, SHARES AND MEMBERS EQUITY

21 ANNUAL REPORT | 2018

Income Statement INCOME Interest on Member Loans Interest on Investments Other Income TOTAL INCOME

EXPENSES Dividend and Interest Expense Other Expenses TOTAL EXPENSES NET INCOME

2018

2017

$56,350,717

$44,303,304

$2,233,597

$2,826,542

$27,705,020

$22,983,732

$86,289,334

$70,113,578

2018

2017

$11,546,019

$8,896,199

$63,609,182

$52,277,030

$75,155,202

$61,173,299

$11,134,132

$8,940,349

REPORT

President & Chairperson’s

Tremendous growth and exciting change in 2018 The past year was filled with exciting changes for your credit union!

Strong membership growth, record dollars put to work in loans to our members, receiving approval to serve more members in new areas, launching our new Interactive Teller Machines (ITMs), breaking ground on a new headquarters and looking for new innovative ways to add value to your membership all marked big changes during 2018.

The beauty about change is that it’s constant; it’s always happening.

Another thing that’s constant – our dedication to improving the financial health of our members and the communities we serve. It was a commitment we started in 1934, and it’s the driving force behind all we do.

Because of you and the trust you place in us, we continue to experience tremendous growth. In the past year, we welcomed more than 16,000 new members, bringing our total to just under 130,000. We put $602 million dollars to work in loans for you. Our field of membership now stretches from Des Moines to the western suburbs of Chicago; and from the northern counties of Illinois to Bloomington-Normal. That’s 49 counties with a population of 4.6 million potential members.

But our growth is more than new members, loans and an expanded field of membership – it’s giving back to members. You saved $127,858 on baseball and hockey games, museums, local pools, festivals and more thanks to our Member Advantage program.

That’s just a small part of the $1,162,567 you got back through rebates, rewards and incentives, and the $10,676,567 we paid out in dividends.

As stewards of your credit union, we make every effort to balance your needs with the cost of doing business. It’s about providing longterm value and sustainability, and sometimes that means making

23 ANNUAL REPORT | 2018

tough choices. We made the difficult decision to close our Burlington, Monmouth and Prophetstown branches. It’s been our privilege to be a part of these communities.

Our continued commitment to people is what defines us, not just buildings.

Our recent investments in personnel, the new ITMs, the remodeling of our Rock Island branch and opening a new, modern financial center on Moline’s Avenue of the Cities is a testament to this.

With our ITMs, you still get the same great face-to-face service when you deposit a check, make a payment or transfer some cash; you just get a couple more minutes back in your busy schedule. The ITMs aren’t taking jobs away, in fact, we’re adding staff so we can extend our drive-up hours from 7 a.m. – 7 p.m. in Rock Island and in Moline on Avenue of the Cities. Why? Because you want, and need, to bank on your time, when it’s convenient for you.

Team IHMVCU is nearly 400 people strong, working hard to provide you exceptional, caring service in person, on the phone, via video, and behind the scenes. Our new headquarters, expected to open in 2020, will provide us the much-needed space and infrastructure to support you on your financial journey. We also hope it becomes a central location for recruiting and retaining Quad Cities talent. We’re proud to make this investment in the Quad Cities.

As you proceed on your financial journey, know that we’re in it together.

We’re committed to helping you reduce your financial stress and find your financial success – whether it’s through a car loan to get you to work, a savings plan to help you meet your goals, or just a conversation that helps you better understand your financial situation.

At IHMVCU, being your Pathfinder, your trusted financial partner, is more than just words – it’s part of our DNA. It’s doing the right thing for our members, our employees and our communities. We look forward to navigating the path to financial success with you in the next year and beyond.

BRIAN LAUFENBERG President & CEO

TOM TERRONEZ Board of Directors, Chair

REPORT

Supervisory Committee

Annual audit reinforces IHMVCU’s financial health The Supervisory Committee is an independent auditing committee that evaluates the soundness of IHMVCU’s operations and activities, ensuring management’s sound internal controls and adherence to best practices in accounting policy and procedure.

The committee meets regularly to ensure that members’ funds and interests are protected. By closely monitoring industry trends, we confirm compliance with regulations, policies, and procedures as well as the reliability of financial records. At the request of the Board of Directors, members of the Supervisory Committee also serve on other standing and special committees.

An independent accounting firm is retained by the committee to perform annual financial audits and issue certified statements as it relates to IHMVCU’s overall financial condition.

Based on the results of the 2018 annual audit performed by certified public accountants CliftonLarsonAllen LLP, as well as audits conducted by the National Credit Union Administration and the Department of Financial Institutions, we conclude that IHMVCU has adequate financial controls and is financially sound.

Respectfully submitted,

JEFF CARR Supervisory Committee, Chair

25 ANNUAL REPORT | 2018

Board of Directors TOM TERRONEZ Chair AJAY SINGH Vice Chair SAM KUPRESIN Secretary/Treasurer JEFF CARR TIM CONSIDINE MEGAN EARLY CHIP IRWIN TOM KALE, JR. LARRY WIEMERS

Supervisory Committee

WE’RE COMMITTED TO HOLDING IHMVCU TO THE HIGHEST STANDARDS.

JEFF CARR Chair TOM KALE, JR. Secretary KRISTIN GLASS CHIP IRWIN MELISSA PEPPER

Federally Insured by NCUA | Equal Housing Opportunity | NMLS 463074