O U R M I S S I O N S TAT E M E N T The mission of Erie Federal Credit Union is to responsibly deliver financial solutions that meet the needs of our community.
O U R V I S I O N S TAT E M E N T The vision of Erie Federal Credit Union is to be the #1 most trusted financial resource in the region.
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REPORT OF THE CEO
We’re here for you... Fred Rogers often told the story about when he was a boy and would see scary things on the news: “My mother would say to me, ‘Look for the helpers. You will always find people who are helping.’ To this day, especially in times of disaster, I remember my mother’s words, and I am always comforted by realizing that there are still so many helpers — so many caring people in this world.” While sitting down to report on our credit union’s 2019 success, the world finds itself in the throes of a global pandemic, which has shuttered business, impacted families and changed the very fabric of ‘normal’ American life. We have all been asked to stay-at-home, wear masks and maintain a safe social distance of six feet from others at all times. Measures that defy both our sense of self and community while also protecting the same. Psychologists, McMillan and Chavis (1986) define a sense of community as “a feeling that members have of belonging, a feeling that members matter to one another and to the group, and a shared faith that members’ needs will be met through their commitment to be together.” There are four elements of “sense of community” according to McMillan and Chavis’s theory:
lower loan rates and lower fees than provided by other financial institutions (integration and fulfillment of needs). Lastly, Erie FCU has successfully supported members, their families and our community for well over 83 years (shared emotional connection), and our team looks forward to continuing to deliver on this long-established commitment to you, our membership. By our very nature, Erie FCU provides a “sense of community” that supports the communities we serve. Erie FCU’s member-first approach to financial services is clearly resonating within our community. Because of our members ongoing support and referrals, Erie FCU is now over 63,000 members STRONG. We marked the most successful year in our 83-year history in 2019. We are proud to report that assets grew 11.26% or a total of $55.5 million. Deposits grew 14.71%, a total of $62.2 million. Consumer and business loan portfolios increased a combined total of 16.77%, or $48.2 million. All areas far exceeding expectations. Most importantly, even with substantial growth over the last several years, the credit union’s capital level remains at 10.88%, well above the ‘well-capitalized’ threshold of 7.00% established by our federal regulators, the National Credit Union Administration (NCUA). Continued on page 4.
1 Membership – provides the structure, personal investment, sense of belonging and emotional safety 2 Influence – members need to feel they have some influence in the group 3 Integration and Fulfillment of Needs – members feel rewarded in some way for their participation in the community 4 Shared Emotional Connection – the “definitive element for true community”, this includes shared history and participation As members of Erie Federal Credit Union, we collectively support our organization’s ability to operate to the benefit and fulfillment of all members varied financial needs (membership). The credit union is governed by a volunteer Board and Supervisory Committee made up of members elected by the membership to provide oversight and ensure compliance with legal and financial requirements (influence). All credit union members benefit financially from higher deposit rates,
Brian J. Waugaman, CEO
REPORT OF THE CEO, continued.
Erie FCU once again distributed a Patronage Bonus back to members in the amount of $645,000, meaning we have successfully returned over $1.8 million directly back to members over the past three years. The Patronage Bonus Program was developed to distribute an equitable bonus from credit union earnings back to members based on their individual account relationship and usage of Erie FCU products and services over the 2019 calendar year. The Patronage Bonus Program is just another way to thank our members for over 83 years of trust. Erie FCU was honored to receive a number of awards and accolades in 2019. Erie FCU was voted Erie’s “Best Bank” for the sixth straight year by Erie Reader, and was chosen as “Erie’s Choice in Credit Unions” by readers of the Erie Times-News for the seventh consecutive year in a row. The future of Erie FCU is as strong and bright as ever. Everything we do is in support of meeting our members’ financial needs. As a valued member of Erie FCU, you are the purpose behind all we do; the reason for our continued growth and success. Erie FCU remains committed to helping build strong communities and making a positive impact where we live and work. Our continued success relies on the collective support of our members, our dedicated staff, our volunteers and industry partners. We cannot make the difference we do without you. We thank you for your loyalty and support of Erie Federal Credit Union.
Supervisory Committee Report Erie Federal Credit Union’s Supervisory Committee consists of volunteers who are appointed by the Board of Directors in accordance with the Federal Credit Union Act. This Committee is responsible for ensuring that credit union policies, procedures and internal controls are adequately designed to protect the Credit Union and members’ assets against fraud and conflict of interest. The Committee oversees and reviews the work of the internal audit department, who completes independent audits of the policies, procedures and internal controls of the Credit Union. The Committee also ensures the financial condition of the credit union is accurately and fairly represented in their financial Statements through an independent audit firm. CliftonLarsonAllen LLP (CLA) completed an annual audit of our financial statements and verified the accuracy of members’ account statements for the year ending March 31, 2019. CLA confirmed that the financial statements fairly present the Credit Union’s financial position and conform to generally accepted accounting principles. The National Credit Union Administration (NCUA) is an independent federal agency that insures deposits, protects the members, charters 4
The future is somewhat unknown as we venture into 2020, but you can be confident that Erie FCU continues to operate with your best interests at heart and will stay true to our common purpose and mission to responsibly deliver financial solutions that meet the needs of our community. There is much to be done, but together our combined efforts will further expand our organization’s long community — and member-centric heritage. Mr. Rogers believed we all have an obligation to help one another on this planet. Erie FCU believes in helping our members and community succeed financially, which is why we remain committed to doing the right things to support our members and local businesses while promoting our city and region.
Stay happy, stay hopeful.
We are here to help. We are here for you.
and regulates federal credit unions. NCUA conducts periodic examinations of federal credit union’s records and operations. Erie FCU’s last exam performed by NCUA was as of March 31, 2019. The Supervisory Committee is pleased to report these positive results and to be of service to Erie Federal Credit Union. We will continue to work diligently in 2020 to ensure the Credit Union remains a safe and sound institution. If you have a question relating to the financial health or management of Erie FCU, please do not hesitate to contact us. We are grateful for the opportunity to serve you! As Committee Chairman, I would like to thank Norb Kaczmarek for all the work he provided as the previous Supervisory Committee Chairman. He literally transformed the committee to what it is today and all his hard work is very much appreciated. In closing, I would like to also personally thank Mary Swaney, Internal Audit Manager at Erie FCU for all the help she has provided me since I assumed these duties. — Richard Macer, Chairman
SUPERVISORY COMMITTEE MEMBERS Richard Macer, Chairman
Mary Swaney, Internal Audit Manager
Report of the Board of Directors On behalf of the Board of Directors, management and staff, I am pleased to present your credit union’s 2019 Annual Report. It is an honor and a privilege to represent you as we make decisions for the direction of our credit union. 2019 was a year of incredible milestones for Erie Federal Credit Union. As I reflect back, I am excited to share with you that we saw exceptional growth, progress, creativity, achievement and success. We grew our market share and had record breaking financial performance as a result of serving our member owners at the 5-star level they are accustomed to and expect. I am thankful for the guidance from our volunteer Board of Directors and I am also thankful for the leadership of our CEO, Brian Waugaman and his dedicated team and how hard they work for you, our members. We were delighted to welcome two new Board members in 2019, Richard Macer and Joe Rys. By the way, if you have a passion for helping people and the community and want to be part of a successful financial cooperative, you might want to consider becoming an Associate Volunteer. If so, I encourage you to ask the credit union for more details.
James Lazan, Board Chairman
As you page through this Report, you will clearly see that we have achieved impressive membership, loan, and asset growth. In fact, your Credit Union will achieve a strategic goal of reaching $620 million in assets and 63,000 plus members sometime during the first quarter of 2020. We offered some of the best deposit rates in the area across all deposit products which fueled another year of tremendous deposit growth. Erie FCU remains the credit union of choice in Northwestern PA, as again, Erie FCU was named Erie’s Choice in Credit Unions by the Erie Times News and Erie’s Best Bank by Erie Reader. It turns out the best place to bank is not a bank! Erie FCU was able to provide a record number of loans to our members. Members saved both time and money by trusting their credit union, knowing Erie FCU has their best interests in mind and can deliver the best rates possible. In 2019, the credit union helped more members than ever buy or refinance a home, finishing the year nearly 55% over goal! If that wasn’t awesome enough, we also had a record year in auto lending as our indirect lending team closed more than 3,100 loans for over $60 million. Wow!!! Continued on page 9.
Election of Directors: The Nominating Committee nominated Norb Kaczmarek, Joseph Rys and Richard Macer for re-election to the Board of Directors. There were no nominations by petition received. Therefore, the nominees will be Elected by Acclamation at the Annual Meeting and serve a 3-year term.
BOARD OF DIRECTORS Richard Macer
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Some of the organizations we supported in 2019: St. Martin Center ServErie School Initiative Anna Shelter Goodell Gardens Erie Humane Society Woman’s Club of Erie Soldiers’ and Sailors’ Home Ft. LeBoeuf Historical Society Erie County Historical Society GECAC Erie VA Medical Center Veterans Miracle Center of Erie Second Harvest Food Bank Sisters of St. Joseph Mercy Center for Women Dress for Success The Upper Room St. Patrick’s Haven EUMA St. Benedict Education Center KaleidAScope, Inc Shriner’s Hospital for Children Sarah A. Reed Children’s Center WQLN Erie Children’s Museum Lake Erie Arboretum Erie Art Museum EHCA
Earn it. Keep it. Save it.
People Helping P
Erie FCU was a Volunteer Income Tax Assistance (VITA) site in 2019.
We take great pride in giving back and supporting local. That’s why we participated in ERIE FREE TAXES.
We provide a number finan for members, and partner wide variety of educationa prepare for the future with Buying and Estate Planning most popular. We offered e seminars to over 620 indivi
SafeNet Meals on Wheels Voices for Independence Erie Zoo Erie City Mission United Way of Erie County March of Dimes American Heart Association Habitat for Humanity
ERIE FREE TAXES is a community-based program operated by the United Way of Erie County. Through the IRS Volunteer Income Tax Assistance Program (VITA), Erie FREE Taxes provides free tax preparation service to Erie County tax filers and ensures that every eligible filer claims the Earned Income Tax Credit (EITC). The willingness to be a VITA site, and the amount of credit union employees who volunteered their time, is a clear demonstration of Erie FCU’s ongoing commitment to the community and to those tax payers needing help in preparing their tax returns.
Junior Achievement - Bowl-A-Thon
• Erie FCU helped file 883 tax returns
Special Olympics Pennsylvania Polar Plunge
• Filers received tax refunds of $1,257,005
• Earned Income Tax Credits received were $304,827 6
You Refi’d Your
In 2019, 576 refinanced 603 a saved nearly
ncial literacy seminars/events companies by request. With a al programs, we can help you h confidence. In 2019, our Home g seminars were two of our eight “after hours” community iduals.
All Erie FCU management and staff gathered for team building/educational event on Columbus Day. “Team Day” gave us the opportunity to spend some time discussing new technology, member experience, compliance, and security. Rather than sleeping in on what is traditionally a “credit union holiday”, our staff spent the day looking toward the future and planning how we can make Erie FCU even better!
r Ride & SAVED!
Also at Team Day, a number of Erie FCU employees took pies to the face as part of our “Polar Plunge” Team’s fundraising efforts benefiting Special Olympics! A big thank you to all who took one for team!
6 members auto loans and y $270,000!!!
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In 2019, Erie FCU’s #Team AOK continued to reinvest back into the place we call home. While it’s critical we continue to enhance our products and services and technology, we also remain committed to investing in our community through sponsorships, volunteerism and financial outreach that benefits many people and associations across our region. Anything we did that brightened someone’s day or put smiles on their faces was our way of paying it forward. We will be back in 2020 doing our thing and showcasing the credit union difference.
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“When I started out on my own, Erie Federal Credit Union was there for me to help me expand my business. Over time, I found the need to add additional practitioners to service our community. Again, they were able to provide the lending for me to purchase a larger facility, so that we could all have a space to call home. I am very committed to Erie Federal Credit Union primarily because of my experiences with them and the personal touch they provide. I would definitely recommend Erie Federal Credit Union to anyone looking to start a business. I think the ease in being able to work with them and their knowledge around how to go from a start up to expansion was/is very valuable.”
— Melissa Sulkowski, Owner of Nurturinse
“When you’re starting a business and you’re trying to deliver your goods and services and have a “just in time” budget, you need efficient banking. We switched to Erie Federal Credit Union because of that efficiency and not only technology tools such as their online banking - the ability to check my accounts on my phone when I am on the go, deposit my checks the moment they’re in my hands - but we switched to them because I get answers instantaneously. I’ve had Erie Federal Credit Union staff drop off paperwork within an hour of me sending an email. That’s extraordinary service. They care. They call and check on our business. That kind of trusted relationship is incredibly valuable. Thank you Erie Federal Credit Union.”
— Sean Fedorko, Co-founder of Radius CoWork
“Since the time Erie Federal Credit Union helped us get started, we’ve increased our business ten-fold. We opened with just individual customers and now we are working with all the first-responder departments in the area. As a business, it isn’t solely about that initial loan to get going, it’s about working closely with them for all our day to day banking. If we ever have the need for extra cash to keep our flow going, they do have lines of credit to offer which is great. Having them watch us grow, and having them place their trust in us, we know that whatever we need next for our next step in our business growth, that they’ll be right there behind us.” — Amy Makowski, Owner, General Manager of Uniform Outfitters
REPORT OF THE BOARD OF DIRECTORS, continued from page 5.
Each year, Erie FCU measures overall member experience and satisfaction. Overall, members rated us 4.5 stars out of 5, with a member service rating of nearly 4.5 with highest average rating being a 4.62 in friendliness of staff. Much to be proud of. Also proud that for the 3rd year in a row, a Patronage Bonus was declared as a way to say “thank you” for your commitment, support and usage of Erie FCU in 2019. This is rare in the financial services industry, but our members are that important to us. An important part of providing our members the right financial services is that we are able to provide not only traditional banking products like checking and savings accounts, loans, but also insurance, investment
and financial planning services. Strategically, we will work with the management team to grow all business lines, expand our footprint, and most importantly improve the experience you have on or at any one of our channels (mobile, online, ATM, telephone, and branch). We continue to grow with Erie FCU Pride. Members tell us they love our courteous staff, great service, and community outreach such as shred days and financial literacy training/events. As a not-for-profit financial cooperative, we are pleased that we are meeting our goal of operating in a safe, and sound manner while providing excellent service and improving the lives of our member/owners. And finally, please know, none of this would be possible without your trust and partnership. On behalf of the Board of Directors and dedicated team, THANK YOU!
Sharing Success Did you get your piece of the pie?
Last year, Erie FCU was proud to pay another special Patronage Bonus to its membership for the third consecutive year. TheL Patronage Bonus of $645,000 was larger than the past two years and was be paid to eligible members in January 2020. Over the past three years, Erie FCU has paid out nearly $1.8 million via its patronage bonus program. The Patronage Bonus was developed in order to distribute an equitable bonus back to members based on their individual account relationship and continued member loyalty over the past calendar year. Any active member in good standing on December 31, 2019 was
eligible to receive a share of the declared Patronage Bonus. “As a credit union, we are very pleased to be able to Creturn a portion of our earnings to our member-owners. This truly is what sets us apart from many for-profit financial institutions”, said Brian Waugaman, Erie FCU CEO. “2019 was another extremely successful year for us thanks to the many members who chose to take advantage of the products and services we offer”. Members who use Erie FCU as their primary source for all of their financial needs received the greatest benefits from the Patronage Bonus.
Recognition “I have been a member of Erie FCU for about 40 years and to be really honest, there is no place I would rather conduct my banking. Your employees have always been helpful, courteous and kind. This is not an act. You hire people who care about serving their customers and also serving the community.” “Thank you for making a difference and for your caring kindness. Many blessings” — Betsy W. “I love this credit union, everyone is so friendly in all the branches. They are quick and convenient!”
— Eileen M.
The Pennsylvania Credit Union Association awarded Erie FCU with four MIC awards for marketing excellence — “Best Overall Marketing Campaign” for our Mastercard 2.99% balance transfer promotion, “Best Annual Report”, “Best Newsletter”, and “Best Website”. E R I E
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Year Ending December 31, 2019
Assets Member Loans
Allowance for Loan Losses
Building/Equipment 21,542,975 22,171,464 All Other Assets Total Assets
Liabilities Member Savings
Reserves 5,365,745 5,365,745 Unrealized Loss/Gain for AFS CMOs
Earnings Loan Interest
Income from Investments
Fee & Other Income
Interest Expense $ (24,952)
Total Interest Expense
Operating Expense Compensation, Taxes, Training
Occupancy & Operation
Promotion & Education
Outside Operation Service
Total Operating Expenses
Net Income 10
Each fiscal quarter, DepositAccounts.com evaluates the financial health of every federally insured credit union. Each institution is graded on a number of factors, including capitalization, deposit growth, and loan to reserve ratios, in order to determine a comprehensive health rating. For its financial standing in 2019, Erie FCU earned an A+ health rating, the highest possible rating. DepositAccounts.com has grown to become the largest consumer destination in the United States, maintaining a dedicated focus on depository banking products.
Financially Above & Beyond
Erie FCU Capital Level (12/31/19)
Well-Capitalized Credit Union
Message from the Chief Financial Officer 2019 was an outstanding year for Erie Federal Credit Union as income topped $3.1 million, loans grew $48.2 million and deposits increased $62.2 million. Erie FCU was once again able to pay its membership a Patronage Bonus of over $645,000 – the third straight year for the bonus. The patronage bonus Fred Tonty, CFO
and financial strength are expected to continue in 2020 as our Board of Directors, Management team and all our staff work hard to provide the financial services Erie FCU members need. Lastly, none of our growth, value, and Patronage Bonus payments could have happened without your membership and continued trust in our growing cooperative credit union. Together, we are building and maintaining a strong source of financial security and peace of mind for you and the generations to come.
was paid in January of 2020. Assets increased over $55 million
as Erie FCU continues to expand its membership base in Erie and Crawford counties. Erie FCU continue to remain top of market in loan and deposit rates, hence the tremendous growth seen in 2019. Capital remained very strong at 10.88% — well above NCUA’s adequately capitalized threshold of 7%. Erie FCU’s mission continues to be “responsibly serve its membership”
“Someone is sitting in the shade today because someone planted a tree a long time ago”
— which is clearly evident as record breaking loan and deposit growth
— Warren Buffet
was realized in 2019. We continue to expand our products and services to meet the needs of our community through strategic initiatives and technology to serve our members more efficiently. Continued growth
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EXECUTIVE LEADERSHIP TEAM Brian Waugaman, Chief Executive Officer Brian Warzynak, Chief Information Officer Chris Cortes, Chief Operations Officer Denise Kaczmarek, Chief Lending Officer Fred Tonty, Chief Financial Officer Thomas Brennan, Chief Marketing Officer
Our Family of Branches to Serve You: 1109 East 38th Street 2436 Buffalo Road
1005 Greengarden Road
518 State Street
1220 West 32nd Street
5500 Zuck Road
1825 Downs Drive
101 Washington Towne Blvd. (Edinboro, PA)
3503 Peach Street
2019 Erie FCU Annual Report