annual report 2018 FINAL VERSION

2018
HIGHLIGHTS
- Opened the new Otsego branch
- Expanded Arbor Financial’s Charter to
cover the entire state of Michigan
- Comprehensive new website launched
- One of the best years ever for Return
on Assets, Total Net Income and
Efficiency Ratio
- Created and filled VP Mortgage
Lending and Director of Member
Experience positions
- Introduced the new Employer Connect
at Work program for schools and
employer groups
- Created the Bridge and Renovation
mortgages and introduced the Arbor
On-Time Guarantee
- Added Public Fund accounts and
reached $1 million deposits
- Taught financial literacy to hundreds of
members, students, and employer
groups
- Successfully launched the Volt
Account for teens and young adults
- Introduced the 3-2-1 Rewards Program
for the Rewards credit card
- Implemented a new Risk Management
Department
- Won the Torch Award for Ethics from
the Better Business Bureau
- Won West Michigan’s Best & Brightest
Companies To Work For Award
- Won Best & Brightest Companies to
Work For In The Nation Award
2018
ANNUAL REPORT
REPORT FROM LEADERSHIP
As we reflect upon the past year, we are excited to report the
achievements and accolades that made 2018 a success. We are
grateful to the membership who make up our credit union, and truly
value your patronage.
During 2018, our membership grew nearly 5% and approached
40,000 members. We built a new, full-service branch in Otsego,
and received exciting news that our charter expansion request was
approved to cover the entire state of Michigan. Toward the end of the
year, we began the development of two new branches in Portage, and
purchased land to begin construction of a new office in Caledonia/
Kentwood. We also invested in strategies to bring our members an
improved service experience, both in person and through our remote
channels. We
were honored to
have received the
Better Business
Bureau’s Torch
Award for Ethics,
as well as the
Best & Brightest
Companies To
Work For awards,
both for West
Michigan and
nationally.
In 2018 we
introduced the Grand Opening at our New Otsego Branch in May.
Volt account, which
helped to bring financial education and good financial habits to teens
and young adults. We also introduced the Bridge and Renovation
mortgages, offered continuous CD promotions, and originated over
$30 million in commercial loans. Credit card balances grew by 10%
due to our enhanced rewards program. We created Public Funds
accounts to serve our schools and other governmental organizations
in our community. Arbor Financial’s consumer lending portfolio grew to
$470 million, up over 14% from 2017. Deposits grew as well with over
$447 million, an increase of over $33 million from last year. At the end
of 2018, our total assets were $573 million, an impressive 9.5% growth
over 2017.
Our credit union had one of our best years ever in growth and
profitability, and while this report shares some of our accomplishments,
we realize that our real success comes from serving you, our member,
and the communities we live in.
As Arbor Financial looks forward to our 85th anniversary next year,
there’s no doubt that our success is dependent upon our members.
Because of you, we are in a strong financial position and growing to
meet your needs both now and into the future.
Bank Here. Grow Here.
Julie Blitchok,
President & CEO
David Aubry,
Chairman of the Board of Directors

2018
FINANCIAL
STATEMENT
ASSETS
Loans
Allowance for Loan Loss
Cash in Bank
Investments
Other Assets
Total
LIABILITIES AND EQUITY
Notes Payable
Other Liabilities
Shares
Deposit Accounts
Certificates of Deposit
Required Reserves
Undivided Earnings
Total
INCOME
Interest on Loans
Income from Investments
Other Income
Total
EXPENSES
Employee Comp & Benefits
Cost of Space
Office Operations
Provisions for Loan Losses
Interest Expense
Operating Expenses
Total
$474,683,979
($4,028,442)
$45,345,986
$14,482,783
$42,938,189
$573,422,495
$55,250,000
$16,350,018
$119,708,302
$233,777,304
$94,216,800
$5,204,759
$48,915,312
$573,422,495
$21,114,470
$1,333,079
$10,172,576
$32,620,125
DISTRIBUTION OF NET INCOME
Undivided Earnings
Total
$10,714,422
$1,185,762
$4,794,486
$2,141,261
$3,598,218
$4,349,966
$26,784,115
$5,836,010
$5,836,010
2018 AUDIT COMMITTEE REPORT
Audit Review
Committee
Joni LaPointe
Chairperson
Josie Howard-Wyne
Eric Lum
Audit Affirms Operational Safety & Soundness
The Audit Review Committee is charged with monitoring
the credit union’s operations to ensure Arbor Financial
is conducting business in a safe and secure manner.
The committee retained CPA firm Crowe to conduct a
comprehensive annual audit to evaluate Arbor Financial’s
business and stewardship practices. The audit found
everything in order. In the opinion of the Audit Review
Committee, Arbor Financial Credit Union is operating in a
safe and secure manner with its members’ best interests
in mind. We believe the financial statements presented
in this report fairly represent the condition of your credit
union at year-end 2018.
2018 FINANCIAL SUMMARY
$500
$400
$300
$200
$100
$0
Member Loans
(in Millions)
2016
2017
2018
Commercial Loans
(in Millions)
$500
$400
$300
$200
$10
$0 $100
2016 2017 2018
2018 BOARD OF DIRECTORS
$0
$100 $600
$80 $500
$60 $400
$40 $300
$20 $200
Member Shares
(in Millions)
2016
Total Assets
(in Millions)
2016
2017
2017
2018
2018
Asset Growth
Loan Growth
Share Growth
Net Worth
ROA
9.49%
14.06%
8.12%
9.44%
1.06%
David Aubry
Chairman
Richard Cahow
Vice-Chairman
Arthur Parker
Treasurer
Barbara Winter
Secretary
1551 South 9th St. | Kalamazoo, MI 49009
269. 375. 6702 | arborfcu.org
Josie Howard-Wyne
Director
Joni LaPointe
Director
Eric Lum
Director
Jeffrey Powless
Director
Kimberley Rohr
Director