2014 HUECU Annual Report
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Transcript of 2014 HUECU Annual Report
H A R V A R D U N I V E R S I T Y E M P L O Y E E S C R E D I T U N I O N
HARVARD U
NIV
ER
SIT
Y EM
PLOYEES CREDIT U
NIO
N 7
5T
H A
NN
IVERSARY
Celebrating years2 0 1 4 A N N U A L R E P O R T
75
Harvard University Employees Credit Union aspires
to be a trusted partner in our members’ financial lives. We
add value to membership by offering the best possible
price, the highest quality personal service, and sincere,
sound advice.
The Credit Union seeks to be known as a community
leader and to deepen its long standing commitment to
housing issues, green initiatives, financial literacy and
access to credit for low and moderate income borrowers.
The Credit Union works toward transformational growth
and change without relinquishing the core values we hold
today. We are a not-for-profit cooperative which exists
solely for the best interest of our members. We value
integrity and responsibility in all of our actions. We strive
to enhance our communities and create solutions for
social, environmental and economic issues.
OUR VISION
1939
1940’s 1950’s 1960’s
Credit Union founded June 26 on the top floor of Lehman Hall.
1940 First full-time employee hired at $100/month.
Auto loan limits raised to $800.
1941 HUECU offered Defense Bonds to help fund World War II.
1947 Converted from a Federal to State Charter.
1953 First Direct Deposit received.
1954 First home loan granted.
1956HUECU moves to Grays Hall.
1961Member deposits become insured with the creation of the Massachusetts Credit Union Share Insurance Corporation.
1966The HUECU Board voted to collect $5 from each prospective member before acceptance into the CU, so that each new member would then hold at least one full share.
1970’s
1976HUECU moves to Holyoke Center 5th floor.
1979Current CEO Gene Foley was hired by the Credit Union as a teller.
Gene Foley, 1979
Branch at Grays Hall, 1956
Lehman Hall, 1939
Looking back & moving forward
HUEcU’S joUrnEy
1939 - 2014
1980’s 1990’s 2000’s1981Branch opened in theLongwood Medical Area.
1983
Branch opened at Mass General Hospital.
1993 Credit Cards introduced.
1995
First ATM installed at the Harvard School of Public Health.
1996 Checking Accounts introduced.
1998 HUECU launched its first website.
2001 Online Banking & Debit Cards introduced.
2004 HUECU expands membership to include Alumni and Students.
2006 Harvard Square Branch relocates to 16 Dunster St.
2010’s2011 Branch opened in the Charlestown Navy Yard.
2012 Mobile Banking launched.
2013 HUECU joins CO-OP Shared Branch Network.
2014HUECU celebrates 75 years serving the Harvard community.
Ribbon cutting ceremony at MGH, 1983
First ATM in the Kresge building, 199575th celebration at the MGH Branch, 2014
HigHLigHtS of201 4mEmbErSHip
2,594nEt nEw mEmbErS 2014 43,419
totaL mEmbErS, yEar End 2014
H U E C U A N N U A L R E P O R T 2 0 1 45
6.4%mEmbErSHip
growtH
EfficiEncy
62%of mEmbErS EnroLLEd
in eStatEmEntS
enEwSLEttEr introdUcEd
AS OF 12.31.2014
THROUgH mObiLE CHECk dEPOsiTs
in branch 49%
dECEmbER 2014: FOR THE FiRsT TimE HUECU RECEivEd OvER
online 51%
ACCOUNTs OPENEd
SPrinG 2014
$1,000,000in one month
HigHLigHtS of201 4wHat’S nEw?
6C e l e b r a t i n g 7 5 y e a r s : 1 9 3 9 - 2 0 1 4
$32,001
forEign cUrrEncy pUrcHaSEd
$88,740cUrrEncy rEdEEmEd
nEw: CAsH bACk REwARds CARd The Platinum Rewards MasterCard® gives members cash back every time they shop and bonus points on gas and groceries.
nEw wEbSitE LaUncH In the summer of 2014, we introduced a new online home for the Credit Union, a key step in the continued evolution of the Credit Union online service delivery. The new HUECU website provides enhanced access, expanded capabilities and a streamlined user experience.
moSt popULar cUrrEncy SoLd
eUro 54%
commUnitySUpport for tEam bLakE In response to the Boston Marathon bombing, a group of MGH Blake nurses ran this year’s marathon to raise money for the victim relief fund. HUECU was happy to support their efforts by setting up an account and by making a donation.
HUEcU partnErS witH artLifting Our Harvard Square branch proudly displayed artwork from the non-profit ArtLifting over the summer. ArtLifting is a social enterprise that empowers individuals who are in art groups at hospitals and shelters by selling their artwork.
Financial literacy: First-time Home buying WorksHops Over the past year, over 600 first-time home buyers attended free seminars hosted by the Credit Union.
nEw: FOREigN CURRENCy
nEw fEatUrES incLUdE: • Mobile Responsive Design • Site-wide Account Access • Secure Document Uploader • Extensive Knowledge Base • Interactive Branch & ATM Locator
nEw: CHECkiNg OPTiON FOR TEENs The Varsity Life Account allows teens to develop important money-management skills, while also maintaining parental access to their accounts.
STATE OF THE indUSTry
While the road to economic recovery has been
challenging, our economy exhibited progress in
2014 as the credit union industry experienced
another year of strong performance. U.S. credit
unions’ total assets grew by $60 billion (a 5.67%
increase from December 2013) to finish at just
over $1.12 trillion.
Membership growth was also impressive,
reaching a new high of 99.3 million members,
up 3 million from the previous year.
Despite these increases, the number of credit
unions decreased by 4.29% in 2014, continuing
this figure’s four-decade decline. Profitability
continues to be a challenge as net interest
margins remain on a downward trend. Long-
term interest rate risk can be avoided if credit
unions accept lower returns in the short-term.
OUr COnTinUEd SUCCESS
Harvard University Employees Credit Union
celebrated its 75th anniversary in style last year
with growth rates above the national average
in assets, membership, and earnings. Our
membership growth, in particular, was more
than twice the national average at 6.4%.
Loan growth was the highest in recent years − at
17% with double-digit growth across all loan
categories − we are thrilled to report that 2014
was a record year for HUECU earnings. EnHAnCinG MEMBEr VALUE
HUECU remains abreast of all social and
technological trends and the direct influence
that each has on our members’ ever-changing
needs. Every enhancement we make to our
product offerings and service delivery
is designed to empower our members and
better the HUECU membership experience.
That is why in 2014, we sourced our members’
feedback to construct a new HUECU website
that assures a cross-platform, enhanced
user experience. Updates to our mobile app
brought about major refinements to key
features including quick transfers, bill pay and
mobile check deposits, thereby making the
app more navigable and seamless.
We also introduced foreign currency
services to help our traveling members lock in
competitive exchange rates, have currency on
hand the moment they arrive at their destination
and avoid the security risks associated with
having to exchange currency on their trip.
HUECU has always been a proud purveyor
of sound financial practices within our
community and we believe those practices
are especially effective when instilled in today’s
youth. Our all-new Varsity Life Account was
introduced this year to help teens (ages 13-17)
learn important money-management skills
early in life. This specialized, parent-assisted
account includes a debit MasterCard with
a $300 daily limit and unlimited ATM
withdrawals with up to $10 surcharge refunds
per month from other institutions.
REPORT fROM THE CHAIRMAN & CEO
oUr miSSion
Enhance our members’ lives by
providing trustworthy products
that are easy to understand,
easy to use and best suited to
meet their financial needs.
H U E C U A N N U A L R E P O R T 2 0 1 47
REPORT fROM THE CHAIRMAN & CEO
MAnAGinG GrOwTH
Despite the struggles that so many institutions
have been faced with in this recovering
economy, we are proud to report that HUECU
has maintained strong, stable growth in our asset
base, capital position and earnings. Although the
economy is still in the midst of a slow recovery, a
notable increase in loan demand is a sign that things
are improving. When we consider this, coupled with
the expectation that the Federal Reserve may begin
raising interest rates this year, we recognize that the
Credit Union is positioned to perform well moving
forward. We will also achieve a significant growth
milestone in 2015, as HUECU will soon surpass $500
million in assets.
PEOPLE HELPinG PEOPLE
Since our inception 75 years ago, the Credit
Union’s enduring success has been a testament
to the strength and character of our community.
The economic challenges of recent years are
evidenced in the diminishing number of American
credit unions, but HUECU continues to prevail
because of our dedicated staff, volunteer Board
and above all, our loyal members. This unwavering
support and cooperative spirit is a constant
inspiration that enables our institution to flourish
even in difficult economic times. 75 years of service
is a wonderful milestone and we are committed to
continuing our success, as well as our tradition of
enriching our members’ lives for many years ahead.
75 YEARS of continUEd
growtH
Eugene J. Foley President & CEO
George white Chairman of the Board
8C e l e b r a t i n g 7 5 y e a r s : 1 9 3 9 - 2 0 1 4
From the very beginning, helping advance the
lives of our members has been the driving mission
of the Credit Union. Through a commitment to
personal service and straight-forward products,
HUECU has seen consistent growth in both
total membership and assets. This increase has
only accelerated over the more recent past with
the introduction of new technologies and the
evolution of our field of membership. As the trend
towards simple and convenient banking continues
to rise, HUECU is poised to continue its success
for many years to come.
T O T A L A S S E T G r O w T H
1 9 3 9 – 2 0 1 4
$0
$400
$200
$300
$100
$500
MiL
LiO
nS
1940 1950 1960 1970 1980 1990 2000 2010 2014
T O T A L M E M B E r S H i P G r O w T H
1 9 3 9 – 2 0 1 4
0
35
15
25
5
45
TH
OU
SA
nd
S
1940 1950 1960 1970 1980 1990 2000 2010 2014
HUECU saw a significant increase in our Home Equity Line of Credit portfolio as the market continues to rebound.
mortgagES to firSt timE HomE bUyErS
93
H U E C U A N N U A L R E P O R T 2 0 1 49
HomE LoanS
2012
2013
2014
M i L L i O n S
HELOC BALAnCES
$15.1
$9.6
$7.9
Fueled by our seasonal specials, this year we experienced steady growth in our auto loans portfolio.
aUto LoanS
2012
2013
2014
M i L L i O n S
AUTO LOAnS diSBUrSEd
$6.9
$8.2
$9.2of totaL aUto Loan baLancES wErE rEfinancES
43.4%
by tHE
numbers 2014
by tHE
numbers 2014
10C e l e b r a t i n g 7 5 y e a r s : 1 9 3 9 - 2 0 1 4
The introduction of our Platinum Rewards MasterCard® contributed to healthy growth in card balances.
crEdit cardS
2012
2013
2014
M i L L i O n S
CrEdiT CArd BALAnCES
$25.3
$26.7
$31.5
rEwardS pointS EarnEd
88,085,031
Crimson Checking continues to benefit our members as both refunded surcharge fees and overall balances continue to rise.
atm SUrcHargE fEES rEfUndEd
$226,185
cHEcking
2012
2013
2014
M i L L i O n S
CHECkinG ACCOUnT BALAnCES
$57.4
$71.9
$78.1dEbit card pUrcHaSES
$98,719,157
1ST MORTGAGES55%
STUDENT LOANS21%
OTHER4%
AUTO LOANS5%
CREDIT CARDS9%
SECOND MORTGAGES
6%
d E P O S i T d i S T r i B U T i O n
SHARES32%
CERTIFICATES15% MONEY MARKETS
28%
IRAs5%
CHECKING20%
rEport from tHE trEaSUrEr
The Credit Union continued to perform strongly,
posting solid earnings, despite an economic
climate that remained challenging. Assets
increased by 7%, with a year-end total
of $476 million.
Positive growth was realized in all areas
of the Credit Union; membership, loans,
and deposits. Loan quality remained high within
all loan product segments.
As reflected in the unaudited financial
statements, the Credit Union continues
to be a well-capitalized, financially strong
institution where members can feel
confident saving and borrowing.
The Board, Management and Staff
are to be commended for their
contributions to our success.
John T. Litchen Treasurer
H U E C U A N N U A L R E P O R T 2 0 1 411
L O A n d i S T r i B U T i O n
2010 2011 2012 2013
$100
$0
$200
$300
$400
2010 2011 2012 2013
$100
$0
$200
$300
MiL
LiO
nS
d E P O S i T S O V E r 5 y E A r S L O A n S O V E r 5 y E A r S
2014 2014
MiL
LiO
nS
$400$500
rEport from tHE trEaSUrEr StatEmEnt of condition
aSSEtS 2014 2013
Cash and cash equivalents 31.6 43.1
Investments 70.7 78.3
Loans to members, net 362.7 310.6
Property and equipment, net 1.7 2.5
National Credit Union Share Insurance Fund deposit 4.0 3.8
Other Assets 5.5 4.4
Total Assets 476.2 442.7
LiabiLitiES and mEmbErS’ EQUity
Liabilities
Members’ shares 428.8 400.4
Borrowed funds 0.0 0.0
Accrued expenses and other liabilities 6.8 5.4
Total Liabilities 435.6 405.8
Members’ Equity
Retained earnings, substantially restricted 40.6 37.2
Accumulated other comprehensive income 0.0 -0.3
Total Members’ Equity 40.6 36.9
Total Liabilities and Members’ Equity 476.2 442.7
StatEmEnt of incomE
intErESt incomE 2014 2013
Interest Income from Loans and Investments 17.7 16.2
Interest Expense -1.2 -1.5
Provision for Loan Losses -1.4 -0.9
Net Interest Income after Provision for Loan Losses 15.1 13.8
Other Income 4.2 3.7
Operating Expenses -15.9 -14.9 net income 3.4 2.6
(Selected data in MillionS)
(Selected data in MillionS)
12C e l e b r a t i n g 7 5 y e a r s : 1 9 3 9 - 2 0 1 4
HUECU was my 1st bank out of college. It remains my bank as a professional and now for my family. I have used a variety of HUECU banking services, as my life has evolved. It’s an amazing benefit and institution! KARIN BLOOM, MEMBER SINCE 2000
in 1985, on my first day of work at MGh, i joined the credit Union and started a direct deposit savings account. Three years later, i was able to save enough for a down payment on my first home! MARY NIEDERBERGER, MEMBER SINCE 1985
i love the convenience - once upon a time when i worked in the building and you were so close and now i do everything online, even though i live 500 miles away, you’re still my main bank!
CINDY POPE MEMBER SINCE 1991
i love that hUecU always has my back.
The customer service is impeccable,
and they make me feel like family.
SEBASTIAN PLACIDE MEMBER SINCE 2013
large service, small bank, perfect fit.
BARBARA MOSCOWITz,
MEMBER SINCE 1989
Wonderful help for a first time home buyer.
MARK MACMILLAN, MEMBER SINCE 2014
i have always had a great experience for over 24 years. love this place.
CHERYL PIRES-TAYLOR, MEMBER SINCE 1990
they are just not your normal loan officers or tellers, they trust
you like family and try to give you the best that you can afford.
WILLIAM SAWYER
MEMEBER SINCE 1978
What i love most about HueCu is the friendly staff,
the excellent service, & the non-corporate feel.
ROBERT COUGHLIN, MEMBER SINCE 1989
the coin counter is the best. everyone
should have one. thank you!
DANIEL OH,
MEMBER SINCE 2013
HueCu got us smoothly, pleasantly & reassuringly into our mortgage when
we bought our first home.
RICHARD BRYDEN, MEMBER SINCE 2002
The ability to bank on day one upon immigrating to the U.S. from israel with my family − 15 years after graduating from harvard! AzIzA RIMON, MEMBER SINCE 2013
in rEcognition of oUr 75tH annivErSary,
wE aSkEd oUr mEmbErS:
HErE arE jUSt a fEw of tHE ovEr 1,000 testimonials We received.
What do you like most about HUECU?
the customer service is #1! love this team!
EUGENIA SANCHEz, MEMBER SINCE 1998
i love the credit Union’s long-standing commitment to workers and sound financial sense. carry on! EVAN MULL, MEMBER SINCE 2014
HueCu is simple banking with lots of options. i’ve never had any problems turn up and the
customer support is wonderful.
JANELLE MILLS, MEMBER SINCE 2000
love the fact that i am a member and not a customer. it speaks to the hUecU treatment. everyone is very helpful and friendly.
AMY FAIRHALL,MEMBER SINCE 2007
I’m a recent graduate and I have to say one of my biggest regrets was waiting so many years
to join the HUECU family. And it’s just that: a family. I feel like I’m welcomed here rather
than being a nameless patron behind a glass partition elsewhere.
AARON PALMER,
MEMBER SINCE 2014
The credit Union has always been there for me financially. i wouldn’t be in the home i am in now without hUecU. AURELIO RAMIREz, MEMBER SINCE 1990
i love being a part of HueCu! Credit unions—especially
this one—rock!
MADELEINE STRAUBEL, MEMBER SINCE 2011
the customer service is #1! love this team!
EUGENIA SANCHEz, MEMBER SINCE 1998
Feels like a family affair.
THADDEUS HOGARTH,
MEMBER SINCE 1989
I appreciate the great service extended to all the members.
Happy 75th!
PHYLLIS MASIELLO, MEMBER SINCE 1986
the HueCu staff is just amazing. it’s their over-the-top customer service that keeps me
coming back.
REBECCA COBURN, MEMBER SINCE 1994
everything about the credit Union is better than a typical bank: the
service, the people who work at hUecU, everything is great!
FREEMAN DEUTSCH, MEMBER SINCE 2000
i love that HueCu doesn’t nickel and dime me with fees. it is also so convenient to have my mortgage through HueCu,
& they were so much easier to deal with than a bank!
MARY LANzAROTTA, MEMBER SINCE 2004
i have all good memories of the
Credit union since 1976! i’ve always said HueCu brought me closer to my money.
ANAHID KRIKORIAN, MEMBER SINCE 1976
H U E C U A N N U A L R E P O R T 2 0 1 415
rEport from tHE aUdit committEE
The Audit Committee is composed of five
Directors dedicated to ensuring that the
Credit Union’s actions are held to the highest
standards of integrity and value. Throughout
2014, the Committee met regularly to review
audit and compliance reports as well as to
discuss other operational topics of interest.
We are assisted in our efforts by outside firms
that provide audit support of the Credit Union’s
finances, internal controls, and regulatory
compliance. Wolf & Company, P.C. audits
our financial statements.
Internal audits continued to receive significant
attention during 2014. Healy & Healy
performed these during the year
to test Credit Union procedures and controls
in branch operations, wire transfers, deposit
operations, mortgage and student loans,
and other areas. The Committee reviewed their
findings and management’s responses, and will
actively work with management on suggested
areas for strengthening processes and risk
management systems.
FIS performed compliance reviews and
training for Credit Union staff. Reviews
included compliance with regulations such
as the Bank Secrecy Act, Red Flags, loan file
reviews, and other areas.
Reimbursements to Board Directors in 2014
totaled $19,998. The majority of these costs
were related to attending the annual
Massachusetts Credit Union League
convention. No reimbursable expenses were
attributed to the Credit and Audit Committees.
All Director expenses and reimbursements
were compliant with the regulations of the
National Credit Union Administration
and the Massachusetts Division of Banks.
The Committee wishes to thank the Credit
Union Management for their cooperation,
support and assistance throughout the year.
Respectfully submitted,
Cheryl Hutt Committee Chair
committEE mEmbErS
cheryl Hutt
guillermo banchiere
mark Edington
edward emde
karrie ford
rEport from tHE aUdit committEE
Eugene J. FoleyPresident & CEO
Craig Leonard Executive VP, CFO
Cheryl Gorman Executive VP, Retail Services
John degnan VP, Operations
Peter Buchanan VP, Real Estate Lending
Tom MontilliVP, Marketing
Edward doctoroffSince 1979
dennis CampbellSince 2013
George whiteChairmanSince 1999
Jeremiah MurphyVice ChairSince 2003
John LichtenTreasurerSince 1992
Mary StraubClerkSince 2004
Bill MurphySince 2010
karen deBerioSince 2003
Cheryl HuttSince 2013
Guillermo BanchiereSince 2007
Mark EdingtonSince 2013
Edward EmdeSince 1993
karrie FordSince 2014
16C e l e b r a t i n g 7 5 y e a r s : 1 9 3 9 - 2 0 1 4
officErS
board of dirEctorS
Tom MurphyVP, Consumer Lending
Jason LukeSince 2014
Thomas LuceySince 2006
The Harvard University Employees Credit Union is proud to
offer our services to the employees, students and alumni of
Harvard University, Harvard teaching hospitals
and affiliated organizations.
we would like to thank all of our sponsor organizations for
their continued support and participation in the Credit Union.
Harvard University (Students, Alumni, Faculty and Staff)
Radcliffe Institute for Advanced Study
American Repertory Theater
Beth Israel Deaconess Medical Center
Boston Shriners Hospital
Brigham and Women’s Hospital
Cambridge Hospital/ Cambridge Health Alliance
Children’s Hospital
Dana Farber Cancer Institute
Dumbarton Oaks Research Library
Harvard Business School Publishing
Harvard/M.I.T. Cooperative Society
Harvard Management Company
Harvard Pilgrim Health Care
Harvard–Smithsonian Center for Astrophysics
Harvard Vanguard Medical Associates
Joslin Diabetes Center
Judge Baker Children’s Center
Lesley University
McLean Hospital
Massachusetts Eye and Ear Infirmary
Massachusetts General Hospital/ Partners Health Care System
MGH Institute of Health Professions
Massachusetts Mental Health Center
Medical Academic and Scientific Community Organization
Mount Auburn Hospital
The Center for Blood Research
The Schepens Eye Research
Institute Spaulding Rehabilitation
Hospital Veterans Administration
Boston Healthcare System
WGBH Boston
OUR SPONSORS
THANK YOU
H U E C U . O R g
Federally Insured by NCUA
Federally Insured by NCUA
your savings are federally insured to at least $250,000 and backedby the full faith and credit of the united states government.