2015 Annual Report
PRESIDENT’S REPORT As a credit union, we are owned by the members who bank with us. That’s you! It’s our mission to empower your financial life by providing solutions that meet your specific needs. Therefore, it’s vital that we know what you need and how we’re meeting those needs. That’s why we greatly appreciate the feedback you provide in our monthly email surveys. I’m happy to report that during 2015 we averaged 92% in the areas of friendliness, accuracy, knowledge, professionalism, and efficiency. I wanted to share a few comments as I think these members have captured the essence of who we are: “Your staff is exceptional. From the manner in which they answer the phone to the last word at the end of the conversation. I have never received such great care and understanding ever.” “Your employee was exceedingly thorough and detailed in a long (30 min.) phone call with me, where he explained multiple issues to me, assisted me with my application for a small line of credit and car loan, and taught me about many subtleties of checking and savings accounts, credit, credit scores, and more. Many thanks!”
I agree that we have an exceptional staff! During the past year, they worked together to clearly define the values they want to live by and deliver to you every day: - Service - Passion - Empathy - Integrity - Community - Opportunity Their hard work in serving you garnered being named the Federal Credit Union of the Year by the National Association of Federal Credit Unions (among credit unions with assets of $250 million or less). In addition, Amy Thomas, VP of People and Culture, was selected as the Credit Union Professional of the Year by NAFCU. We were humbled by the recognition from our peers and our community. Cover Photo: The annual Arlington Police, Fire & Sheriff 9-11 Memorial 5k Run. Page 2
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Inspired by our core values and purpose of serving the Arlington community, we decided to have a little fun proclaiming our commitment to you during the summer. Did you see us in our colorful NotABank.org t-shirts proclaiming: “We are not a bank. We are so much more� at local eateries? Our message must have resonated with the community. We experienced a 10% increase in new members and near record loan growth in home equity loans and mortgages as compared to the same time last year.
In an effort to spread the word on how the Credit Union is different, employees visited various Arlington eateries in their NotABank.org t-shirts during the summer.
We continue to be very active in the community through volunteering, supporting local non-profits, and providing financial education. Our efforts are listed later in the Annual Report. We also committed more resources to our mortgage lending and small business lending programs. I want to thank our dedicated volunteer Board of Directors and our committed and passionate staff. On behalf of everyone who serves you, we look forward to continuing our efforts in creating opportunities for you and making a difference in the community we love, Arlington. Karen Rosales President & CEO Empowering members financial lives
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CHAIRMAN’S REPORT Once again your Credit Union has produced very positive financial results, added enhanced products and services to meet your needs, and hired and retained employees who strive to offer you remarkable service with every interaction. As the demand for technology in all aspects of our lives continues to grow, so does our commitment to meet your demands and keep your finances safe. Here are a few of our investments this past year: • Ongoing enhancements to our Mobile App, which saw an increase in users and a 178% increase in transactions • Implementation of Mobile Deposit, which debuted during the first quarter, and had 1,257 deposits by the end of the year • The ability to transfer your loan payment from other financial institutions (via ACH debit origination) in a secure, electronic format • Access to Apple Pay with tokenized encryption which safeguards transactions when using Apple products • Re-issued credit cards to include an EMV chip which makes it harder for thieves to steal your card information at stores • Implementation of advanced fraud technology to reduce the threat of check fraud • Upgraded and hardened IT systems in response to ever-increasing threats by revamping data backup and recovery systems, disaster recovery/business continuity enhancements, and increased staff security awareness training Jim Wilmot with Riley and Chris • Seven percent decrease in debit Sundlof with Hank support Doorways Howl-O-Ween Walk in October. and credit card fraud claims
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As noted in the Treasurer’s Report, we had a strong lending year which was supported by new product offerings and increased communication utilizing email. You also took advantage of electronic document signing which saves time you no longer need to drive to a branch to apply for or close on a loan. Over 90% of loan closings for auto and personal loans occurred electronically! We also introduced the following new opportunities for your lending needs: • Auto Flex offers the perks of leasing (without the hassles of leasing) combined with the flexibility of traditional auto financing and lower payment options • Investment property financing options for individuals as well as small business owners • Credit card limits were increased for qualified members by nearly $2,300 on average or $4.4 million overall • Fast Cash loan (similar to our popular Holiday Dough) is now available year round On behalf of the Board of Directors, we are grateful you have elected us to ensure the Credit Union is a strong and vital partner in your financial well-being. We also recognize the responsibility we have in serving the Arlington community from which we draw our membership. We will continue our emphasis on growth, financial soundness, community impact, and remarkable service. Thank you for your continued support. Daniel Murray Chair, Board of Directors
Board of Directors Chair: Dan Murray Vice Chair: Beverly Hawkins Secretary: Court Curneen Treasurer: Luis Araya Director: Lisa Moore Director: Steve Halkyard Director: Suzanne Harvey Jose Ramos and Miguel Molina participate in the annual Latinoamerican Festival held at Kenmore Middle.
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TREASURER’S REPORT We had another strong financial performance in 2015. Our assets grew to $239 million or an increase of $16 million over 2014. We ended the year with $1,770,289 in net income or a very slight decrease of $12,279 compared to 2014. Compared to credit unions of similar size, we were in the top 20th percentile in terms of asset growth and net earnings. We experienced another year of membership growth with 739 net new members joining, bringing our membership to 19,484 or 3.94% growth over 2014. Our capital ratio increased to 9.35%, well above our regulator’s requirement of 7% for a “well capitalized” financial institution. This ratio measures the financial strength of a credit union by comparing the amount of earnings held in reserve to safeguard against economic downturns versus total assets.
Employees volunteer at the Water Station for the Credit Union Cherry Blossom Ten Mile Run.
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One of our goals is to provide affordable credit to you and is the primary reason we exist. We accomplished this goal by lending over 80% of our deposits back to you as compared to only 62% by our peer credit unions. We ended the year with $192,838,324 in loans or an increase of $18.78 million over 2014. This represents nearly an 11% increase. This is also the first time we ended the year with an increase in net balances in every loan category: mortgages, home equity, auto, personal, credit cards, and business loans. Our success in meeting your lending needs must also be weighed against the inherent risks of lending. We measure this risk through average delinquency ratio and net charged-off loans. Our goal is to average .88% or lower for the year for average delinquency ratio and we surpassed the goal at .62%. Our goal for net charged-off loans is to average .32% or lower. We also surpassed this goal at .28%. This indicates that we are managing risk well. As the financial steward of your Credit Union, I thank you for your continued support of the only financial cooperative dedicated solely to serving the Arlington community and thank our volunteers and staff for their continued hard work. Luis Araya Treasurer
Financial Statement as of December 31, 2015. Income Interest on Loans Income from Investments Total Interest Income Other Non-Interest Income Total Income Total Dividend Expense Salaries & Benefits Other Operating Expenses Provision for Loan Loss Expense Total Expenses & Losses Net Income
Empowering members financial lives
$ $ $ $ $
Expense
9,363,008 108,558 9,471,566 4,392,684 13,864,250 $ 691,954 $ 5,476,016 $ 5,581,491 344,50 $ $ 12,093,961
$
1,770,289
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SUPERVISORY COMMITTEE REPORT The Supervisory Committee is appointed by the Board of Directors to monitor the effectiveness of internal control systems; confirm adherence to established policies, procedures and regulations; review member feedback; and arrange for an annual audit of the Financial Statements. Your Committee members for 2015-2016 were Max Montague, Stephen Vu, and Eunita Winkey. For 2015, the Committee engaged the CPA firm of Orth, Chakler, Murnane & Company to perform an annual audit in accordance with generally accepted auditing standards. Our CPAs found that our financial statements fairly represent the financial condition of the Credit Union in conformity with generally accepted accounting principles. Other firms were engaged to assess the Credit Union’s information security and to determine compliance with various regulations. After reviewing the various audit reports, reviews and assessments, the Supervisory Committee finds that management and staff are handling the operations of the Credit Union professionally, accurately, and within all regulations and guidelines. The Committee commends the Board of Directors, Management and staff for their diligence in maintaining the financial stability and integrity of your Credit Union. Max Montague Chair, Supervisory Committee Supervisory Committee Chair: Max Montague Member: Stephen Vu Member: Eunita Winkey
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SUPPORTING OUR COMMUNITY Arlington Community FCU supported these community organizations during 2015: • • • • • • •
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• • • • • •
A-SPAN ACPD Charity Heroes Foundation Golf Tournament AFAC Animal Welfare League of Arlington Arlington County – Treasurer’s Office Decal Design Competition Arlington Police, Fire & Sheriff 9-11 Memorial 5K Run Arlington Public Schools - Dr. Martin Luther King, Jr. Literary & Visual Arts Contest - Latinoamerican Festival - Randolph Elementary School - Spanish Rolling “R” Contest - Wakefield High School - Yorktown High School Arlington Chamber of Commerce - Scholars Cup - Small Business Roundtable - Valor Awards Credit Union Cherry Blossom Ten Mile Run Doorways for Women and Families Edu-Futuro George Mason University Leadership Arlington Young Professionals Program Offender Aid and Restoration (OAR)
Alex String volunteers at the Water Station for the Credit Union Cherry Blossom Ten Mile Run. Page 9
Nyambo Anuluoha and Bryan Payne meet with Doug Myrick at the Fall Home Buying Expo at the Arlington Mill Community Center.
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COMMUNITY INVOLVEMENT Your Credit Union actively participated with community organizations including: • APAH - Summer Picnics • Arlington Chamber of Commerce - Small Business Roundtable - Community Action Committee - Governmental Affairs and Business Development Committee - Communication Council • Arlington Neighborhood Village - Finance Committee • Arlington Office of Economic Development • Arlington Public Schools - African American Read-In - Drew Elementary - College Night - New Teacher Orientation • Columbia Pike Revitalization Organization - Board of Directors • Edu-Futuro - Board of Directors • Leadership Arlington - Arlington’s Got Talent Committee - Board of Regents - Review Committee • NAFCU - Share Insurance Fund Oversight Committee • Nauck Civic Association
Employees get ready to volunteer for the annual Arlington Police, Fire & Sheriff 9-11 Memorial 5k Run. Empowering members financial lives
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FINANCIAL EDUCATION We are invested in our community and its financial wellbeing. We demonstrate this by offering free financial education. Listed below are groups and activities with whom we partnered: • Arlington County Senior Center • Arlington Education Association • Arlington Public Schools - Career Days - Color of Leadership Girls Conference - Economics Night - Kid’s Marketplace - Reality Store - Teen Chat - Young Men’s Conference • Future You Youth Forum • Home Buying Seminars • In-School Branches - Barcroft Elementary - Carlin Springs Elementary - Drew Elementary - Gunston Middle • Money Mastery - Arlington Employment Center • Marymonut University • Michigan State University - D.C. Campus
Previous credit union interns volunteer at the Washington Lee High’s Teen Chat. Page 11
In-School Branch student teller, Chris and teacher, Greg Taylor. Empowering members financial lives
LOCATIONS Ballston
4121 Wilson Blvd., #100 Arlington, VA 22203
Columbia Pike
5666 Columbia Pike Falls Church, VA 22041
Glebe Road
2130 N. Glebe Rd. Arlington, VA 22207
Mailing Address
P.O. Box 40070 Arlington, VA 22204
Contact
703.526.0200 ArlingtonCU.org acfcu@arlingtoncu.org
Interested in banking with us?
As Arlington’s community credit union, everyone who lives, works, worships, goes to school, volunteers, or does consistent business in Arlington can bank with us. As a member you’ll enjoy great benefits on everything from car loans to free checking. Those same perks can extend to your immediate family as well no matter where they live.
0416.DQ.300