Download 2012 Annual Report - Affinity Plus Federal Credit Union

20
12
ANNUAL
REPORT

20
12
Not for Profit. For People. ®

2012 Board of Directors
The Affinity Plus Board of Directors consists of nine volunteer members, each elected to a three-year
term. Operating with a governance model, directors are responsible for setting policies, participating
in the development of the strategic plan, reviewing and approving the annual budget and asessing the
performance of the CEO and President.
The primary responsibility of the Board of Directors is to work with the Affinity Plus CEO and
senior management team to explore new ways to strengthen and advance the credit union and the
credit union movement as a whole.
Connie Roehrich,
Board Chair
Stephen Geyen,
Director
Karen Snorek,
Board Vice Chair
David Johnson,
Director
Lori Berreman,
Board Secretary
Ron Rollins,
Director
Gary Denault,
Board Treasurer
Bill Tschida,
Director
Yvonne Condell,
Director

2012
Connie Roehrich,
Board Chair
More than 10 years ago, we focused on the courageous statement,
“Earning trust one relationship at a time”. To do this, we set out
to do what’s right for members, taking the time to understand
their goals and dreams—and empowering over 400 employees in
order to make it happen. At the time, it was a bold promise, but
today, it is the foundation of what guides Affinity Plus. This vision
has set the groundwork for why we exist, and is summed up in
this statement: “A group of thoughtful, inspired people who are
committed to changing the world, one person at a time.”
In 2012, Affinity Plus remained committed to its member-first
philosophy above profit. It was a year of growth for Affinity Plus—
and with growth of any organization, senior leaders were faced
with maintaining the strategy, or cutting corners to stay on top of the growth. I am
proud to say, we didn’t waiver—and will not. We welcomed 22,929 new members this
past year, which is the most new members we’ve seen in our 83 year history. In addition,
Affinity Plus continued to add more jobs in Minnesota by growing from 340 employees in
late 2011 to over 450 employees at year-end. We also grew in locations with the addition
of a branch in Coon Rapids, as well as expanded and relocated branches in Alexandria
and Roseville.
Chairwoman’s
report
Our job as the Board of Directors is to provide overall leadership and governance of the
credit union to ensure Affinity Plus executes the best possible service to our members.
Affinity Plus’s products and services continue to reflect our member-centric model of
placing people before profit. In fact, while our peers are looking for ways to reduce
service standards or increase fees, we are doing just the opposite—and giving back. In
2012 members waived $1.1 million dollars in fees through the Participation Rewards
program. Among 33 of our peer groups, we rank second in total return to the member,
which includes return to savers, return to borrowers and overall member service usage.
This is a true testament that our earnings are reinvested in programs and services for the
greater good of the membership.
As we look to 2013, we will continue to develop products and services that benefit
members first, before our bottom line, as well as expand into and offer our services to
communities in which we can make the most impact, changing lives one member at a
time.
On behalf of the Board of Directors, we are honored to serve you and look forward to
guiding you and Affinity Plus in 2013. Thank you for your membership, and more
importantly your trust in Affinity Plus.

2012
President’s
report
Our Core
Values
difference
We Trust We make a
We
Value
We do what’s
right
We
believe

2012
Kyle L. Markland,
President & CEO
Affinity Plus’s mission is to make a difference in the lives
of people by putting people first. We take that commitment
seriously and I am honored you have trusted us with your
financial goals. We recognize that the financial industry tends
to generate mistrust and is oftentimes viewed as a place that
just wants to make money—at the expense of customers.
However, we choose to take the opposite stance—we are here to
put people first, above profit. We focus on the significant events
that happen in the lives of our members, such as buying a car,
celebrating a birth, grieving a death, finding a first home, getting
married, sending kids off to college and retiring. These events
are significant, and it is when your goals surrounding them are
achieved that we are successful.
President’s
report
As a member of Affinity Plus, we hope you feel the difference when working with an
organization that cares about you and wants to make a difference in your life. Our
employees are empowered to make decisions in your best interest and ultimately do
what’s right for you. Our unique business model caught the attention of Harvard Business
School and as a result, several case studies have been written and published about Affinity
Plus. Today, Harvard and other universities teach MBA classes using business cases on
Affinity Plus as an example of an innovative way to run a business that is based on people,
emotion and spirit.
Recognizing that your goals are unique, we will continue to offer programs individualized to
you that will save you money and help you achieve your goals. The Participation Rewards
Program continues to help members save money and donate to charities. Over 5,900
members chose to reduce the rate of a current loan, and over 3,800 members increased
the rate on their certificate to increase the interest they earn to nearly $494,000 more per
year. Our members are very generous and redeemed points totaling $76,326 in donations
to selected charities such as Second Harvest Heartland and Special Olympics. Additionally,
we allowed our members to refund over $1.1 million in fees using Participation Rewards
points.
I am proud of our Ditch Your Bank campaign as it continues to empower consumers
everywhere with the knowledge and confidence that there are better banking alternatives.
As a result of this campaign and higher participation from our members overall, we
experienced our highest level of new member growth in history. Simply by decreasing the
annual cost of opening and maintaining a basic bank account, we’ve put an estimated
$250 back into each new member’s pocket per year.
What it comes down to is that you belong to an organization that at its core trusts
and believes in people, wants to make a difference and values the uniqueness of each
person. We believe in the goodness of people and we are here to make a difference—in
the lives of our members and the communities we serve. We’re proud you have chosen
Affinity Plus as your credit union and I am excited about what the future has in store for
our members.

2012
Supervisory
Committee
The Supervisory Committee is made up of volunteer members of Affinity
Plus who are responsible for safeguarding member assets through fair
and accurate representation. The Committee is accountable for overseeing
financial management practices and procedures, and the resulting
decisions made on behalf of our members’ assets.
report
The Supervisory Committee meets monthly to review relevant information
for its role. McGladrey LLP, provides internal audit information and
assists the Committee in overseeing all areas of the organization to
ensure compliance and operational performance. The Committee uses
CliftonLarsonAllen, LLP to conduct quarterly regulatory compliance
assessments and the annual financial statement audit. The Committee
reviews information from the credit union’s Compliance Committee and
Risk Management Committee monthly.
The Supervisory Committee is confident the financial, compliance, and
operational controls in place on behalf of Affinity Plus members are
adequate to effectively monitor and respond to the safety of their interests.
2012 Supervisory Committee Members
William S. Holloran, Chair
Mike Tamte
Margaret Egan
Michelle Malott
Matt Bryne

Financial Highlights
Assets
2012
Dec. 31, 2012 Dec. 31, 2011
Cash and Investments 109,130,628 45,149,780
Loans Held for Sale 10,892,597 25,671,102
Loans to Members, Net of Allowance 1,402,691,387 1,302,037,577
Accrued Interest Receivable 4,989,947 4,442,398
Property and Equipment 22,180,419 16,669,902
NCUA Share Insurance Deposit 13,610,989 11,511,235
Mortgage Servicing Rights 12,619,038 10,419,477
Other Assets 27,037,852 41,023,144
Total Assets 1,603,152,857 1,456,924,615

2012
Financial Highlights
Liabilities & Membership Equity
Dec. 31, 2012 Dec. 31, 2011
Liabilities
Membership Shares 1,468,327,223 1,314,856,084
Accrued Expenses and Other Liabilities 7,643,039 7,456,243
Borrowed Funds - 25,000,000
Total Liabilities 1,475,970,262 1,347,312,327
Membership Equity
Retained Earnings,
Substantially Restricted 127,175,139 109,607,171
Accumulated Other
Comprehensive Income 7,456 5,117
Total Membership Equity 127,182,595 109,612,288
Total Liabilities and Membership Equity 1,603,152,857 1,456,924,615

Financial Highlights
2012
Statement of Income
Dec. 31, 2012 Dec. 31, 2011
Interest Income & Expense
Interest Income 73,017,633 66,275,886
Interest and Dividend Expense (19,518,652) (18,870,636)
Provision for Loan Loss (14,861,000) (9,075,000)
Net Interest Income after Provision 38,637,981 38,330,250
Other Income &
Operating Expense
Other Income 39,343,218 24,730,352
Operating Expense (60,413,231) (52,561,603)
Net Income (Loss) 17,567,968 10,498,999

2012
Financial Highlights
Statement of Changes in
Members’ Equity
2012 2011
Beginning Balance January 1 109,612,288 99,111,319
Net Income (Loss) 17,567,968 10,498,999
Unrealized Gain (Loss) on Investment 2,339 1,970
Balance December 31 127,182,595 109,612,288

22,929
NEW MEMBERS
WERE WELCOMED
MEMBERS REALIZED
DREAMS OF
HOMEOWNERSHIP
4,958
40,801
MEMBERS MET A GOAL
THROUGH AN AUTO
OR CONSUMER LOAN
MEMBERS CONNECTED
WITH US ONLINE
THROUGH CHAT
29,748

2012
Community
IMPACT
Through generous donations by members, employees,
and the community, we raised more than $110,000 for
local charities this past year, which is a true testament
that by partnering together, we can change lives.
A total of $1,305 in cash and
$13,069 through
Participation Reward Points
was raised.
A total of $12,141 in cash and
$30,685 through
Participation Reward Points
was raised.
®
FOUNDATION
Duluth Flood Relief
A total of $813 in cash and
$6,027 through Participation
Rewards Points was raised.
In addition, a separate fund
was created for Hurricane
Sandy Relief in which a total
of $1,707 in cash and $4,975
through Participation
Rewards Points was raised.
Affinity
POLAR
Plus matched
BEAR
all
donations for Hurricane
Sandy Relief for a combined
total of $13,365 raised.
PLUNGE
A total of $533 in cash and
$5,473 through Participation
Reward Points was raised.
A total of $3,903 in cash
and $16,097 through
Participation Reward Points
was raised. Affinity Plus
matched up to $10,000 for a
total of $30,000.

2012
Spreading
Financial
Education in
Our Communities.
Affinity Plus and the Affinity Plus
Foundation partnered with the
National Theater Corporation (NTC)
to sponsor a community-based
performance that focused on
financial literacy education and the
value of money to local community residents—for free.
Community
IMPACT
Members of all ages joined us on August 23 for a fun evening of laughter and
learning as The National Theatre for Children presented, “Showdown at Cash
Canyon.” The performance was held at a local community center, and the evening
also included several free events such as face painting, balloon artists, ice cream,
and fun activities.
We were honored to present such a meaningful, fun-filled evening to the Affinity
Plus community supporting our Foundation’s mission to better the quality of life
and achieve financial literacy through sound personal financial education,
understanding and management throughout the Minnesota communities Affinity
Plus serves.
In partnership with the NTC, we also
sponsored in school performances called
“Mad About Money” to engage middle
school students and their families with
the important information pertaining to
personal finance.
The production, “Mad About Money,”
was performed at 10 middle schools in
communities that Affinity Plus serves
throughout the state of Minnesota. More
than 4,500 students and families were
able to benefit from these performances.

2012
Member
IMPACT
In May 2012, we
celebrated the
expansion of our
Alexandria branch.
The branch originally
opened with two
employees and no cash
services in the fall of
2010 and eventually
outgrew the location.
The branch relocated to
the front of the building
with expanded cash
services, including an
ATM.
Additionally, we celebrated the grand
opening of our Coon Rapids location,
bringing opportunities for our
members living in our north metro
communities. Prior to the addition of
Coon Rapids, many members used our
Cambridge and Roseville branches.

2012
Member
IMPACT
In October 2012, we celebrated the expansion
of our Roseville Branch. Our new branch is
located right next to the previous location,
serving members in Roseville and the
surrounding communities.
The new branch offers wi-fi, state of the art
technology, and a community room for
community groups to reserve for free.
Affinity Plus has been serving members of the
Roseville and surrounding communities since
1993.

“Affinity Plus– Where a group of thoughtful, inspired people are committed to changing the world one person at a time.”

175 West Lafayette Frontage Road • St. Paul, MN 55107
www.affinityplus.org