Download 2012 Annual Report - Affinity Plus Federal Credit Union
Download 2012 Annual Report - Affinity Plus Federal Credit Union
Download 2012 Annual Report - Affinity Plus Federal Credit Union
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20<br />
12<br />
ANNUAL<br />
REPORT
20<br />
12<br />
Not for Profit. For People. ®
<strong>2012</strong> Board of Directors<br />
The <strong>Affinity</strong> <strong>Plus</strong> Board of Directors consists of nine volunteer members, each elected to a three-year<br />
term. Operating with a governance model, directors are responsible for setting policies, participating<br />
in the development of the strategic plan, reviewing and approving the annual budget and asessing the<br />
performance of the CEO and President.<br />
The primary responsibility of the Board of Directors is to work with the <strong>Affinity</strong> <strong>Plus</strong> CEO and<br />
senior management team to explore new ways to strengthen and advance the credit union and the<br />
credit union movement as a whole.<br />
Connie Roehrich,<br />
Board Chair<br />
Stephen Geyen,<br />
Director<br />
Karen Snorek,<br />
Board Vice Chair<br />
David Johnson,<br />
Director<br />
Lori Berreman,<br />
Board Secretary<br />
Ron Rollins,<br />
Director<br />
Gary Denault,<br />
Board Treasurer<br />
Bill Tschida,<br />
Director<br />
Yvonne Condell,<br />
Director
<strong>2012</strong><br />
Connie Roehrich,<br />
Board Chair<br />
More than 10 years ago, we focused on the courageous statement,<br />
“Earning trust one relationship at a time”. To do this, we set out<br />
to do what’s right for members, taking the time to understand<br />
their goals and dreams—and empowering over 400 employees in<br />
order to make it happen. At the time, it was a bold promise, but<br />
today, it is the foundation of what guides <strong>Affinity</strong> <strong>Plus</strong>. This vision<br />
has set the groundwork for why we exist, and is summed up in<br />
this statement: “A group of thoughtful, inspired people who are<br />
committed to changing the world, one person at a time.”<br />
In <strong>2012</strong>, <strong>Affinity</strong> <strong>Plus</strong> remained committed to its member-first<br />
philosophy above profit. It was a year of growth for <strong>Affinity</strong> <strong>Plus</strong>—<br />
and with growth of any organization, senior leaders were faced<br />
with maintaining the strategy, or cutting corners to stay on top of the growth. I am<br />
proud to say, we didn’t waiver—and will not. We welcomed 22,929 new members this<br />
past year, which is the most new members we’ve seen in our 83 year history. In addition,<br />
<strong>Affinity</strong> <strong>Plus</strong> continued to add more jobs in Minnesota by growing from 340 employees in<br />
late 2011 to over 450 employees at year-end. We also grew in locations with the addition<br />
of a branch in Coon Rapids, as well as expanded and relocated branches in Alexandria<br />
and Roseville.<br />
Chairwoman’s<br />
report<br />
Our job as the Board of Directors is to provide overall leadership and governance of the<br />
credit union to ensure <strong>Affinity</strong> <strong>Plus</strong> executes the best possible service to our members.<br />
<strong>Affinity</strong> <strong>Plus</strong>’s products and services continue to reflect our member-centric model of<br />
placing people before profit. In fact, while our peers are looking for ways to reduce<br />
service standards or increase fees, we are doing just the opposite—and giving back. In<br />
<strong>2012</strong> members waived $1.1 million dollars in fees through the Participation Rewards<br />
program. Among 33 of our peer groups, we rank second in total return to the member,<br />
which includes return to savers, return to borrowers and overall member service usage.<br />
This is a true testament that our earnings are reinvested in programs and services for the<br />
greater good of the membership.<br />
As we look to 2013, we will continue to develop products and services that benefit<br />
members first, before our bottom line, as well as expand into and offer our services to<br />
communities in which we can make the most impact, changing lives one member at a<br />
time.<br />
On behalf of the Board of Directors, we are honored to serve you and look forward to<br />
guiding you and <strong>Affinity</strong> <strong>Plus</strong> in 2013. Thank you for your membership, and more<br />
importantly your trust in <strong>Affinity</strong> <strong>Plus</strong>.
<strong>2012</strong><br />
President’s<br />
report<br />
Our Core<br />
Values<br />
difference<br />
We Trust We make a<br />
We<br />
Value<br />
We do what’s<br />
right<br />
We<br />
believe
<strong>2012</strong><br />
Kyle L. Markland,<br />
President & CEO<br />
<strong>Affinity</strong> <strong>Plus</strong>’s mission is to make a difference in the lives<br />
of people by putting people first. We take that commitment<br />
seriously and I am honored you have trusted us with your<br />
financial goals. We recognize that the financial industry tends<br />
to generate mistrust and is oftentimes viewed as a place that<br />
just wants to make money—at the expense of customers.<br />
However, we choose to take the opposite stance—we are here to<br />
put people first, above profit. We focus on the significant events<br />
that happen in the lives of our members, such as buying a car,<br />
celebrating a birth, grieving a death, finding a first home, getting<br />
married, sending kids off to college and retiring. These events<br />
are significant, and it is when your goals surrounding them are<br />
achieved that we are successful.<br />
President’s<br />
report<br />
As a member of <strong>Affinity</strong> <strong>Plus</strong>, we hope you feel the difference when working with an<br />
organization that cares about you and wants to make a difference in your life. Our<br />
employees are empowered to make decisions in your best interest and ultimately do<br />
what’s right for you. Our unique business model caught the attention of Harvard Business<br />
School and as a result, several case studies have been written and published about <strong>Affinity</strong><br />
<strong>Plus</strong>. Today, Harvard and other universities teach MBA classes using business cases on<br />
<strong>Affinity</strong> <strong>Plus</strong> as an example of an innovative way to run a business that is based on people,<br />
emotion and spirit.<br />
Recognizing that your goals are unique, we will continue to offer programs individualized to<br />
you that will save you money and help you achieve your goals. The Participation Rewards<br />
Program continues to help members save money and donate to charities. Over 5,900<br />
members chose to reduce the rate of a current loan, and over 3,800 members increased<br />
the rate on their certificate to increase the interest they earn to nearly $494,000 more per<br />
year. Our members are very generous and redeemed points totaling $76,326 in donations<br />
to selected charities such as Second Harvest Heartland and Special Olympics. Additionally,<br />
we allowed our members to refund over $1.1 million in fees using Participation Rewards<br />
points.<br />
I am proud of our Ditch Your Bank campaign as it continues to empower consumers<br />
everywhere with the knowledge and confidence that there are better banking alternatives.<br />
As a result of this campaign and higher participation from our members overall, we<br />
experienced our highest level of new member growth in history. Simply by decreasing the<br />
annual cost of opening and maintaining a basic bank account, we’ve put an estimated<br />
$250 back into each new member’s pocket per year.<br />
What it comes down to is that you belong to an organization that at its core trusts<br />
and believes in people, wants to make a difference and values the uniqueness of each<br />
person. We believe in the goodness of people and we are here to make a difference—in<br />
the lives of our members and the communities we serve. We’re proud you have chosen<br />
<strong>Affinity</strong> <strong>Plus</strong> as your credit union and I am excited about what the future has in store for<br />
our members.
<strong>2012</strong><br />
Supervisory<br />
Committee<br />
The Supervisory Committee is made up of volunteer members of <strong>Affinity</strong><br />
<strong>Plus</strong> who are responsible for safeguarding member assets through fair<br />
and accurate representation. The Committee is accountable for overseeing<br />
financial management practices and procedures, and the resulting<br />
decisions made on behalf of our members’ assets.<br />
report<br />
The Supervisory Committee meets monthly to review relevant information<br />
for its role. McGladrey LLP, provides internal audit information and<br />
assists the Committee in overseeing all areas of the organization to<br />
ensure compliance and operational performance. The Committee uses<br />
CliftonLarsonAllen, LLP to conduct quarterly regulatory compliance<br />
assessments and the annual financial statement audit. The Committee<br />
reviews information from the credit union’s Compliance Committee and<br />
Risk Management Committee monthly.<br />
The Supervisory Committee is confident the financial, compliance, and<br />
operational controls in place on behalf of <strong>Affinity</strong> <strong>Plus</strong> members are<br />
adequate to effectively monitor and respond to the safety of their interests.<br />
<strong>2012</strong> Supervisory Committee Members<br />
William S. Holloran, Chair<br />
Mike Tamte<br />
Margaret Egan<br />
Michelle Malott<br />
Matt Bryne
Financial Highlights<br />
Assets<br />
<strong>2012</strong><br />
<br />
<br />
Dec. 31, <strong>2012</strong> Dec. 31, 2011<br />
Cash and Investments 109,130,628 45,149,780<br />
Loans Held for Sale 10,892,597 25,671,102<br />
Loans to Members, Net of Allowance 1,402,691,387 1,302,037,577<br />
Accrued Interest Receivable 4,989,947 4,442,398<br />
Property and Equipment 22,180,419 16,669,902<br />
NCUA Share Insurance Deposit 13,610,989 11,511,235<br />
Mortgage Servicing Rights 12,619,038 10,419,477<br />
Other Assets 27,037,852 41,023,144<br />
Total Assets 1,603,152,857 1,456,924,615
<strong>2012</strong><br />
<br />
<br />
Financial Highlights<br />
Liabilities & Membership Equity<br />
Dec. 31, <strong>2012</strong> Dec. 31, 2011<br />
Liabilities<br />
Membership Shares 1,468,327,223 1,314,856,084<br />
Accrued Expenses and Other Liabilities 7,643,039 7,456,243<br />
Borrowed Funds - 25,000,000<br />
Total Liabilities 1,475,970,262 1,347,312,327<br />
Membership Equity<br />
Retained Earnings,<br />
Substantially Restricted 127,175,139 109,607,171<br />
Accumulated Other<br />
Comprehensive Income 7,456 5,117<br />
Total Membership Equity 127,182,595 109,612,288<br />
Total Liabilities and Membership Equity 1,603,152,857 1,456,924,615
Financial Highlights<br />
<strong>2012</strong><br />
<br />
<br />
Statement of Income<br />
Dec. 31, <strong>2012</strong> Dec. 31, 2011<br />
Interest Income & Expense<br />
Interest Income 73,017,633 66,275,886<br />
Interest and Dividend Expense (19,518,652) (18,870,636)<br />
Provision for Loan Loss (14,861,000) (9,075,000)<br />
Net Interest Income after Provision 38,637,981 38,330,250<br />
Other Income &<br />
Operating Expense<br />
Other Income 39,343,218 24,730,352<br />
Operating Expense (60,413,231) (52,561,603)<br />
Net Income (Loss) 17,567,968 10,498,999
<strong>2012</strong><br />
<br />
<br />
Financial Highlights<br />
Statement of Changes in<br />
Members’ Equity<br />
<strong>2012</strong> 2011<br />
Beginning Balance January 1 109,612,288 99,111,319<br />
Net Income (Loss) 17,567,968 10,498,999<br />
Unrealized Gain (Loss) on Investment 2,339 1,970<br />
Balance December 31 127,182,595 109,612,288
22,929<br />
NEW MEMBERS<br />
WERE WELCOMED<br />
MEMBERS REALIZED<br />
DREAMS OF<br />
HOMEOWNERSHIP<br />
4,958<br />
40,801<br />
MEMBERS MET A GOAL<br />
THROUGH AN AUTO<br />
OR CONSUMER LOAN<br />
MEMBERS CONNECTED<br />
WITH US ONLINE<br />
THROUGH CHAT<br />
29,748
<strong>2012</strong><br />
Community<br />
IMPACT<br />
Through generous donations by members, employees,<br />
and the community, we raised more than $110,000 for<br />
local charities this past year, which is a true testament<br />
that by partnering together, we can change lives.<br />
A total of $1,305 in cash and<br />
$13,069 through<br />
Participation Reward Points<br />
was raised.<br />
A total of $12,141 in cash and<br />
$30,685 through<br />
Participation Reward Points<br />
was raised.<br />
®<br />
FOUNDATION<br />
Duluth Flood Relief<br />
A total of $813 in cash and<br />
$6,027 through Participation<br />
Rewards Points was raised.<br />
In addition, a separate fund<br />
was created for Hurricane<br />
Sandy Relief in which a total<br />
of $1,707 in cash and $4,975<br />
through Participation<br />
Rewards Points was raised.<br />
<strong>Affinity</strong><br />
POLAR<br />
<strong>Plus</strong> matched<br />
BEAR<br />
all<br />
donations for Hurricane<br />
Sandy Relief for a combined<br />
total of $13,365 raised.<br />
PLUNGE<br />
A total of $533 in cash and<br />
$5,473 through Participation<br />
Reward Points was raised.<br />
A total of $3,903 in cash<br />
and $16,097 through<br />
Participation Reward Points<br />
was raised. <strong>Affinity</strong> <strong>Plus</strong><br />
matched up to $10,000 for a<br />
total of $30,000.
<strong>2012</strong><br />
Spreading<br />
Financial<br />
Education in<br />
Our Communities.<br />
<strong>Affinity</strong> <strong>Plus</strong> and the <strong>Affinity</strong> <strong>Plus</strong><br />
Foundation partnered with the<br />
National Theater Corporation (NTC)<br />
to sponsor a community-based<br />
performance that focused on<br />
financial literacy education and the<br />
value of money to local community residents—for free.<br />
Community<br />
IMPACT<br />
Members of all ages joined us on August 23 for a fun evening of laughter and<br />
learning as The National Theatre for Children presented, “Showdown at Cash<br />
Canyon.” The performance was held at a local community center, and the evening<br />
also included several free events such as face painting, balloon artists, ice cream,<br />
and fun activities.<br />
We were honored to present such a meaningful, fun-filled evening to the <strong>Affinity</strong><br />
<strong>Plus</strong> community supporting our Foundation’s mission to better the quality of life<br />
and achieve financial literacy through sound personal financial education,<br />
understanding and management throughout the Minnesota communities <strong>Affinity</strong><br />
<strong>Plus</strong> serves.<br />
In partnership with the NTC, we also<br />
sponsored in school performances called<br />
“Mad About Money” to engage middle<br />
school students and their families with<br />
the important information pertaining to<br />
personal finance.<br />
The production, “Mad About Money,”<br />
was performed at 10 middle schools in<br />
communities that <strong>Affinity</strong> <strong>Plus</strong> serves<br />
throughout the state of Minnesota. More<br />
than 4,500 students and families were<br />
able to benefit from these performances.
<strong>2012</strong><br />
Member<br />
IMPACT<br />
In May <strong>2012</strong>, we<br />
celebrated the<br />
expansion of our<br />
Alexandria branch.<br />
The branch originally<br />
opened with two<br />
employees and no cash<br />
services in the fall of<br />
2010 and eventually<br />
outgrew the location.<br />
The branch relocated to<br />
the front of the building<br />
with expanded cash<br />
services, including an<br />
ATM.<br />
Additionally, we celebrated the grand<br />
opening of our Coon Rapids location,<br />
bringing opportunities for our<br />
members living in our north metro<br />
communities. Prior to the addition of<br />
Coon Rapids, many members used our<br />
Cambridge and Roseville branches.
<strong>2012</strong><br />
Member<br />
IMPACT<br />
In October <strong>2012</strong>, we celebrated the expansion<br />
of our Roseville Branch. Our new branch is<br />
located right next to the previous location,<br />
serving members in Roseville and the<br />
surrounding communities.<br />
The new branch offers wi-fi, state of the art<br />
technology, and a community room for<br />
community groups to reserve for free.<br />
<strong>Affinity</strong> <strong>Plus</strong> has been serving members of the<br />
Roseville and surrounding communities since<br />
1993.
“<strong>Affinity</strong> <strong>Plus</strong>– 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<br />
www.affinityplus.org