headwinds ANNUAL REPORT 2020
A YEAR LIKE NO OTHER
Going Virtual...Business Continuity
A NEW BRAND IDENTITY
Four Keys to the New VolCorp Logo
INSTRUMENTS FOR SUCCESS
Symphony: VolCorp’s New CUSO
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TABLE OF CONTENTS
MEMBERS’ CONFIRMATION
Results from our 2020 Member Survey
OUR MISSION
Passionate about our service to you
YOUR TRUSTED STRATEGIC PARTNER
Corporate Reports, Senior Leadership Team, Board of Directors, Supervisory Committee
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GOING VIRTUAL In a year like no other, VolCorp’s 2020 Annual Meeting was chased off the stage and onto the big screen and the Forum was replaced with our first-ever virtual Educational Summit, Insight 2020. While we missed being able to network and fellowship among friends, we did still have the benefit of some fantastic speakers in the Summit and a great educational opportunity for all who logged in for the event. Thank you to all who supported the events through your a endance.
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BUSINESS CONTINUITY Business continuity is about having a plan to deal with difficult situations, so an organization can continue to function with as li le disruption as possible. On March 13, 2020, a difficult situation known as COVID-19 required VolCorp to implement its business continuity plan (BCP). And we were ready. Hours of planning, facilitated by our Enterprise Risk Management (ERM) team, enabled VolCorp staff to easily transition from their office space to their home office. Within an hour or so, VolCorp employees were logged into their work computers via the Virtual Private Network (VPN) and resumed their workday. On December 25, 2020, another complex set of circumstances arose when an individual detonated a bomb near the Nashville AT&T central office, causing communication blackouts in the region. Again, VolCorp’s BCP was invoked. VolCorp staff began meeting via conference calls that Christmas morning. When VolCorp opened for business on Monday, December 28, members were able to conduct business in a normal fashion.
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A NEW BRAND IDENTITY Your brand identity is the soul of who you are as an organization. These words represent something much larger than a single product or service. We connect with words – through meaning, through the way we hear them, to the way we envision them and pair them with imagery. While working with the design agency, we identified four key words about VolCorp: Leader: We are financial and investment services experts who bring 40 years of merited authority as a trusted voice within the credit union industry. Forward-Thinking: We stay grounded and consistent as an established financial services co-op by pu ing the needs of our members first, with eyes boldly focused toward the future. Friendly: We celebrate a warm, genuine approach to member service by balancing professional services with an enjoyable experience through our amiable disposition. Confident: We embrace our strong legacy as an experienced strategic partner because it allows us to provide the very best financial solutions to our members.
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SYMPHONY – VOLCORP’S NEW CUSO Credit unions rely on consulting services from third-party providers to increase profitability and elevate performance efficiently and effectively. Symphony, LLC has access to experience and expertise that comes from thousands of hours spent working with financial institutions. The combination of this experience and expertise will offer clients actionable insights and an independent perspective that is unrivaled in the industry.
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EXTREMELY LIKELY 90.00%
HOW LIKELY ARE YOU TO RECOMMEND VOLCORP TO OTHER CREDIT UNIONS? SOMEWHAT LIKELY 8.89%
98.89% LIKELY
STRONGLY AGREE 88.89%
98.89% AGREE
I CAN ALWAYS TRUST VOLCORP.
SOMEWHAT AGREE 10.00%
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STRONGLY AGREE 86.67%
DOING BUSINESS WITH VOLCORP IS EASY.
96.67% AGREE
SOMEWHAT AGREE 10.00%
VERY SATISFIED 88.89%
HOW SATISFIED ARE YOU WITH YOUR RELATIONSHIP WITH VOLCORP?
100% SATISFIED
SOMEWHAT SATISFIED 11.11%
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MEMBER SERVICES ACH Services ACH Se lement ACH Receipt ACH Origination ACH Returns ACH Contingency
ALM Services ALM Report Packages Expert Consulting ALM & Investment Training
Cash Services FRB Coin & Currency Cash Vault Program
Consulting Services ACH Risk Assessment BSA Audits Strategic Planning Charter Expansion and Conversion
Design Services Logo Design Print Design Specialty Design Newsle er Design Web Design Web Hosting and Maintenance
Electronic Funds Transfer Services Domestic and International Wire Transfers Tele-Transfers and Electronic Debit Transfers
International Services Foreign Currency International Wires U.S. Dollar International Wires FedGlobal International ACH Transfers Foreign Item Processing International Cash Le ers International Collection Items
Investment Services Brokerage Services SimpliCD Corporate Accounts
V-Portfolio Online Trading Portfolio Analytics and Bond Accounting
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Item Processing Services Member Share Dra s Corporate Share Dra s Money Orders Cashier’s Dra s Check Collection X9 Check Collection Check Collection Returns Paper Item Processing of Deposit Return Items Image Delivery of Deposit Return Items Early Notice of Check Collection Returns
Loans and Liquidity Services Line of Credit Term Loans Unsecured Short-Term Loans Le ers of Credit SimpliCD Issuance Central Liquidity Facility CU Business Group Loan Participation - LoanStreet®
Safekeeping Symphony LLC Strategic Partnerships Bill Pay Card@Once CU Business Group Current Expected Credit Losses Compliance I-Care Sallie Mae Student Loan Program Zogo
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CHAIRMAN & PRESIDENT’S REPORT
JOHN JACOWAY Board Chairman
What a year it was. Without a doubt, we all heard words like “unprecedented” and “pivot” more frequently than ever before. But, those words also, perhaps, carried more meaning than ever before. This was especially true given there were three events which put VolCorp’s Business Continuity Plans (BCP) to the test as Nashville was faced with outbreak of tornadoes, the pandemic, and the Christmas Day bombing. In addition to that, we, like everyone else, watched the country deal with the implications of racial and political unrest, a hardhit economy, interest rates bo oming out, and the allimportant unknown related to everything going on around us. The year was definitely “unprecedented” and it definitely required an inordinate amount of “pivoting”. But, through it all, we are thrilled to report VolCorp’s business continuity planning and its resolve stood the test and members experienced very li le, if any, disruption of service. For VolCorp, 2020 was really a year of focusing on BCP and maintaining an unwavering forward moving posture. Our BCP was tested early and o en. The tornadoes were a near miss in early March as they took a path about 500 yards from our building. So, while they had the potential to cause great damage to VolCorp, they merely put the initial phases of our BCP to the test as we hustled to make sure our building, systems, and most importantly, staff were all ok and accounted for. Thankfully, all were.
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Less than two short weeks later is when everything really changed as the pandemic hit levels resulting in all staff being sent home (March 13th) for a mandatory work-from-home environment. In rapid fashion, we were able to deploy all staff to work from home and to do so such that it resulted in members reporting back that they would not even know staff was working from home if we had not told them. While the whole world faced this pandemic and had to pivot together, it was paramount VolCorp do its part to ensure seamless support of our members. And then came Christmas morning. The bombing in downtown Nashville shook us all, and, once again, tested our BCP. From the time we heard of the news on Christmas Day until we opened for business on the following Monday, we successfully rerouted all services to operate through our contingency site and then back again when AT&T had the repairs in place for us to do so over the course of just the weekend. Hats off to VolCorp’s IT Staff for moving in both directions in rapid fashion over that tumultuous weekend.
JEFF MERRY President and Chief Executive Officer
The takeaway from this recap of events is not that VolCorp experienced something others did not or handled it any be er or any differently than anyone else. Continued...
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Chairman & President’s Report Continued... The takeaway is this: life threw 3 extraordinary circumstances at us in a short period of time and we were able to continue to serve our credit unions at a high level and without disruption.
For VolCorp, 2020 was
From that, we hope you can find great comfort as we all continue to operate through a great deal of unknown. VolCorp’s ability to do this is
really a year of focusing
critical when serving over 330 credit unions of all sizes in nearly 20 states across the country. For that, we thank the entire staff and volunteers for a job very well done.
on Business Continuity Another point of emphasis highlighting 2020 was VolCorp’s ability to maintain a forward
and maintaining an
moving posture. The focus on the foundation of VolCorp over the last couple of years proved to be key
unwavering forward
to performance during this year. Pursuit of VolCorp’s strategic plan experienced li le slow down, if any, in most major initiatives as was
moving posture.
evidenced in the year-end announcement of the new CUSO, Symphony, LLC., and the roll out of the first stages of a rebranding campaign and new member invoices, just the beginning of many more things to follow. These advancements are evidence of VolCorp’s relentless determination to build a member experience for you that is unparalleled anywhere else. We are taking something that is great and making it really great. Critical steps to that end began in 2020 and will continue to roll out as we move forward. Our team is commi ed to this and was unwavering in 2020. As we do every year, we look to your feedback to get an idea of how we are doing from the most
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important perspective, our members. And again, we are proud of what we heard and gladly report some of the highlights back to you. The biggest takeaways from this year’s member survey to indicate how we are doing, which are staples we ask about annually, were the percentage of respondents who indicated they view VolCorp as a Trusted Strategic Partner (96%), who feel VolCorp stays true to its mission and values (98%), who feel VolCorp always operates with integrity (99%), and who are likely to recommend VolCorp to another credit union (99%). Overall satisfaction scores were 4.89 on a 5.00 scale. We are grateful for your affirmation and looking forward to earning that again this year. We love what we do at VolCorp and we love doing it for the credit unions who humble us with that opportunity. We are constantly looking at how to do it be er and in 2020, we did. Further, in 2021, we look to build upon that
STRONGLY AGREE 92.00%
momentum and make it even be er, yet again. We are passionate about our service to you, honored you trust us to provide it, and excited about what we can do for you today, tomorrow, and
99.00% AGREE
VOLCORP IS COMMITTED TO OPERATING WITH INTEGRITY.
well beyond. Respectfully submi ed.
SOMEWHAT AGREE 7.00%
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VolCorp’s mission is to inspire credit unions to reach new heights by providing dynamic payment solutions, custom investment services, and unparalleled member service. A cornerstone of this mission is providing liquidity solutions,
TREASURER’S REPORT
relevant service offerings, and a safe haven for member deposits. While the challenges of 2020 didn’t change VolCorp’s mission, it did introduce new opportunities to serve this mission. VolCorp worked with the NCUA and other credit unions to support the CARES Act provision that provided more accessibility to the Central Liquidity Facility (CLF) and expanded the CLF’s borrowing authority. We continually enhanced platforms such as V-Portfolio and Safekeeping during a time when member investment activity increased. Our reliable cash vault program was ready to accommodate
RON SMITH Treasurer Enbright Credit Union
fluctuations in your members’ cash needs. VolCorp’s wholly-owned CUSO, Symphony LLC, was founded at a time when the value in risk and business continuity management was clearly evident. Finally, VolCorp’s long-term commitment to balancing competitive rates and fees with the need to maintain an appropriate capital position was rewarded when unprecedented amounts of governmental stimulus flowed into the credit union system.
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Financial performance depicts 2020 as a sound year for your corporate. Despite the historically low interest rate environment, positive earnings each month continued to increase member capital. Net income for the year totaled $3.75 million. At December 31, 2020 the retained earnings ratio of 1.91% sat well above the regulatory requirement of 0.45%. NCUA regulations consider a Tier 1 capital ratio of 4% “adequately capitalized”, while 5% or greater is “well capitalized”. Despite bal-
Despite the historically
ance sheet growth stemming from governmental stimulus, at year-end VolCorp’s Tier 1 capital ratio remained well capitalized at 5.13%.
low interest rate
VolCorp’s ALCO meets monthly overseeing assetliability management, investments, and credit risk. The commi ee monitors corporate liquidity in
environment, positive
order to ensure funds are available when our members need them, while at the same time allowing earnings and growth opportuni-
earnings each month
ties for both the corporate and member credit unions. During the dynamic year, VolCorp maintained a strong cash position, a high
continued to increase
credit quality securities portfolio heavily weighted with floating rate instruments, and maintained access to multiple
member capital.
lines of credit. A review of the audited financial statements indicates internal operations are sound. VolCorp is well-positioned to serve members in 2021 and for many years to come.
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The focus of the Supervisory Commi ee is to oversee management practices and policies, safeguard member assets, and ensure that VolCorp’s financial reporting objectives are
SUPERVISORY COMMITTEE’S REPORT
met. To administer these responsibilities the Commi ee must establish audits, inspect or cause to be inspected the securities portfolio, cash and other accounts of VolCorp, to inspect or cause to be inspected the internal controls over financial reporting, to opine on the financial statements at the end of the fiscal year and to cause a full report of these audits to be made to the Board. In accordance with these responsibilities, the independent accounting
RICK MIKELS Committee Chairman Tennessee Members 1st Federal Credit Union
firm of Carr, Riggs & Ingram, LLC was engaged to perform VolCorp’s annual audit. Their le er renders an “unmodified” opinion on the consolidated financial statements of Volunteer Corporate Credit Union as of December 31, 2020, and the year then ended. Mr. Phillip Reynolds, CPA, CIA, was engaged by the Commi ee to perform the internal audit function for VolCorp during 2020. All audits and their recommendations were reported to the Supervisory Commi ee. Information Security reports were provided to the Commi ee monthly by Mr. Tyler McNair, Director, Enterprise Risk.
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Based on the results of the internal audits, security reports, external audit and the joint examination by Tennessee Department of Financial Institutions and the National Credit Union Administration conducted during fiscal 2020, the Commi ee believes
COMMITTEE MEMBERS:
that it has properly represented the interests of the membership and its responsibilities to
RICK MIKELS Committee Chairman Tennessee Members 1st Federal Credit Union
VolCorp. The Commi ee would like to com-
KAREN WOODALL Veritas Federal Credit Union
mend the board of directors, management and staff for their support and
SUSAN TANT Healthcare Services Credit Union
commitment to the audit and review process and for their continuing dedication of services to member credit unions.
NICK ARVON West Virginia Federal Credit Union JOHN MERRITT Enrichment Federal Credit Union
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2020 S LEADERS
PHILLIP COCHRAN Chief Investment Officer Series 7 & 63
JEFF DATO EVP and Chief Operating Officer
JEFF M
Preside Chief Execu
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SENIOR HIP TEAM
CHRISTINA ADKISON Chief Experience Officer
JUSTIN HOLT Chief Financial Officer
MERRY
ent and utive Officer
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2020 B OF DIRE RICK MIKELS Tennessee Members 1st Federal Credit Union
DEBBIE JONES UT Federal Credit Union
JOHN JA
Chair Southeast Credit
TODD SWIMS Vice-Chairman Leaders Credit Union
RON SMITH
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Treasurer Enbright Credit Union ANNUALREPORT2020
BOARD ECTORS BRIAN TROTTER EPB Employees Credit Union
JUDY HESTER Northern KY Educators’ Federal Credit Union
ACOWAY
rman t Financial Union
SANDY YOCUM Strip Steel Community Federal Credit Union
MIKE COOPER Secretary AllWealth Federal Credit Union HEADWINDS
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ADDRESS 2460 Atrium Way Nashville, TN 37214
ONLINE volcorp.org vportfolio.volcorp.org v-portfolio.org volcorpdesign.org
NUMBERS (615) 232-7900 (800) 470-3444 After Hours: (615) 232-7977 Operations Fax: (615) 232-7979
EXTENSIONS 1 - Member Services/Operations/Item Processing/ACH 2 - Investment Sales 3 - Marketing and Business Development 4 - Administration and President’s Office 6 - Dial by Name Directory 8 - Symphony CUSO 0 - Operator
HOURS Monday, Tuesday, Wednesday and Friday: 7:30 a.m. to 4:30 p.m. (Central time). Thursday: 8:30 a.m. to 4:30 p.m. (Central time).
Our Member Services Department closes at 4:15 p.m. (Central time) each day. Office closings are coordinated with the Federal Reserve Bank holiday schedule.
NCUA
Savings Federally Insured to at least $250,000. NCUA, a U.S. Government Agency.