2011 - Tower Federal Credit Union

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An economy in recovery, a lesson in fidelity. Though the U.S. economy moved unsteadily toward recovery in 2011, every month showed job growth. Unemployment eased, and then stalled at 8.5%. But unemployment in Maryland, which had peaked at 8% in January 2010, dropped to 6.5% over the next two years—encouraging news for the Tower community. At Tower, we recycle our profits to keep rates fair, fees few and low, performance high, and deposits safe. We stayed faithful to our prudent principles and proved once again that sound money management works, especially in a challenging economy. A financial institution’s safety and soundness is measured by its net-worth-toassets ratio. The National Credit Union Administration (NCUA) requires 7% to earn the Agency’s top rating of “well-capitalized”, but ours is 10.5%— about 50% better. Here’s more peace of mind: through the NCUA, the federal government insures your deposits up to $250,000. $35 Tower’s beginning assets in 1953 $2.37 billion Tower’s assets in 2011 Loan demand falls and rebounds as consumers remain cautious. Weak job and housing markets made consumers cautious last year. Our members responded by increasing their savings and decreasing their borrowing. Though generally a sound strategy for an individual family’s finances, taken together it dampens economic recovery. Tower itself operates most efficiently when robust deposit growth is balanced by vigorous loan demand. In 2011, we experienced an imbalance as loan demand dropped in most categories. The bright spots were auto lending and MasterCard ® accounts. As auto sales were recovering nationally (up 10.2%), so were Tower’s auto loans, driven by our highly competitive rates. Members borrowed $91.7 million, a healthy 13.5% increase. We expect this positive trend to continue in 2012. By year’s end, Tower MasterCard balances had climbed to $106 million, $2 million past the record set in 2010. As the big banks and card companies kept tacking on fees to fatten their profits, we were cutting rates and charging no fees on balance transfers. Members are slowly realizing the value of no fees, honest practices, completely transparent disclosures, and a low rate they can count on. One in five members carries Tower’s Gold MasterCard, an even better value because it pays you a cash rebate on all purchases. Last year members received $2.8 million back in rebates. Overall real estate lending was down 24%. Members borrowed $404.8 million, a decrease of $127.7 million from the previous year. Home mortgages followed in lockstep, declining 24% to $332.3 million. Home equity loans and lines of credit were also down, by similar percentages. Many members had already taken advantage of low rates to refinance their homes in previous years. 2011 ANNUAL REPORT 3
Mid-year, we lowered our mortgage rates still further, to the lowest they’ve been in our history. This stimulated an upswing in refinancing, and the year ended with its strongest quarter ($130 million) in real estate lending. The number of closings by Tower Title Services declined about a quarter in 2011, mimicking the drop in real estate lending. But the total dollar amount of the real estate it handled actually increased by 2.9% to $96.8 million. Members are still taking advantage of the good value, one-stop convenience, and simplified closings that are building a solid reputation for Tower Title Services. Prime Share, Club, and Checking balances climb. As the Tower community grows in number, members are keeping more of their money right here, strengthening the credit union for everyone. This strong deposit growth allows us to respond to your financial needs at each stage of life, at the best possible rates. Over 12,600 members opened 18,198 Prime Share, Club, and checking accounts, helping raise the total balances on these accounts to $1.22 billion, an increase of 12%. This marked the third straight year of doubledigit gains. Total savings balances grew by 7.7% to $1.92 billion, another record. Because direct deposit adds so much efficiency for us and convenience for you, we were happy to promote the service with cash bonus campaigns. Over 1,900 members added direct deposit to their Tower services, and by year’s end about 48% of all members were using direct deposit. This cuts our operating costs and credits your recurring income to your accounts sooner. Millions $2,500 $2,000 $1,500 $1,000 $500 $0 Total Savings Balances $1,915 $1,778 $1,647 $1,475 2008 2009 2010 2011 New options give members more control over when, where, and how to bank. In a world of high-speed change, we’re keeping pace with the way you live today by investing in new banking technology. Our purpose is to give you more choices for controlling your finances—choices that are faster, easier, and more convenient—without sacrificing accuracy or security. In September, Tower introduced Mobile Banking, a fast way to connect to your Tower accounts via your mobile devices, like your smartphone. You can check balances, make transfers, pay bills, and more using the latest encryption methods and secure login. 4 TOWER FEDERAL CREDIT UNION
Page 1 and 2: Strength in Numbers T O W E R F E D
Page 3: Leadership Report Martin M. Breland
Page 7 and 8: Taking care of the people who take
Page 9 and 10: Treasurer’s Report Charles C. Nos
Page 11 and 12: Consolidated Statements of Financia
Page 13: Board of Directors George M. Cumber

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