Report of the CEO, Brian J. Waugaman For over 79 years, Erie FCU has been extremely fortunate to attract and maintain dedicated individuals who believe in our credit union and the credit union philosophy. From our Board of Directors who guide our course; to our Supervisory Committee who oversee our operations; to our staff who work to achieve our goals; to our members who trust us to help improve their financial well-being. Our unified belief in making credit union benefits available to everyone in our community is the framework from which our success has been built. In early 2015, we merged with 1st Choice Community Federal Credit Union, which brought a much needed branch office and full-service ATM to the Edinboro area. We experienced steady membership growth and tremendous asset growth. Our lending portfolio increased in both business and consumer lending, leading to a record year. It is promising to see our reputation as a trusted lender extend credit union benefits to local businesses. Most importantly, our capital level remains above the ‘well-capitalized’ threshold set by the National Credit Union Administration (NCUA). Advances in technology and security led to the release of our new EZ Money Manager online and mobile banking platform in 2015. This new system greatly increases our members’ online security posture and provides a more functional smart phone application. We also began converting member credit cards over to the new chip-based card technology for additional security when conducting in-person transactions. The strategic plan for 2016 is set and we are well on our way to yet another strong financial performance in 2016. The reconstruction of the former Glenwood Elementary School into a full-service member branch location and centralized operations center will continue throughout 2016 and is scheduled to open in early 2017. Our 79 year journey has been nothing far from amazing. We will continue to explore and embrace the opportunities that will shape our success in the next 79 years. We thank you for the continued privilege to serve you and our community, and your continued trust in Erie Federal Credit Union.
Brian J. Waugaman, CEO
“If you believe passionately in what you are doing and who you are doing it with, success is bound to follow.” — Anisa Kamadoli Costa
After 45 years of service to Erie Federal Credit Union, I would
membership while supporting the broad vision that allowed
like to acknowledge Edwin “Corky” Dombrowski who resigned from
for our credit union’s expansion. Erie FCU sincerely thanks
his position on the Board of Directors. Corky, a former teacher,
Corky for his incredible dedication to the values and goals of
guidance counselor, and principal for the School District of the City
our credit union.
of Erie, helped to keep the credit union focused on the needs of its 2
Cover photo courtesy of Patrick Catalde
Report of the Board of Directors
2015 was a year that made a difference for our members
Daniel Nawrocki
Norb Kaczmarek
James Lazan
2015 was a very good year for Erie FCU. The Board of Directors is pleased to report that Erie FCU remains strong and is wellcapitalized at 11.05% — significantly above the requirements of what our regulator considers a healthy credit union (capital over 7%). It was also a year where Erie FCU provided higher levels of member-focused service and community support. Being engaged and part of the community was a huge priority as credit union employees contributed their time, talents, and money to multiple charities and events. As a credit union, we have members not customers. We take great pride in the fact that every single person who has an account with us is an owner of Erie FCU. It is inspiring to hear how our member-owners continuously find exceptional service and great value here. We remained vigilant in adding value to an Erie FCU membership with investments in new products, tools, compliance, and security to make doing business with us even easier. In March, Erie FCU welcomed members of 1st Choice Community Federal Credit Union and as a result, added two new branch offices.
Performance: • Membership grew to more than 52,000 and total assets grew to $439 million • Member deposits grew by more than 10% and loan growth was nearly 18% Our commercial lending department has continued to see phenomenal growth and has now provided over $25 million in loans to business members. The Board of Directors voted to approve several critical investments in 2015. Some of the these were: a new online and mobile banking platform, a new indirect auto lending portal, and the go-ahead to convert the former Glenwood Elementary School into a new headquarters and full-service branch. James Lazan and Dennis Howard were nominated by committee for re-election to the Board of Directors. There were no additional nominations; therefore, a mail ballot was not required. As you can see, 2015 was a successful year of growth, giving back, and planning for the future. We appreciate your continued loyalty and look forward to celebrating our 80th year in 2016.
Report of the Supervisory Committee
Laurie Becker
Dennis Howard
The Supervisory Committee is responsible for ensuring the financial condition of Erie Federal Credit Union is accurately and fairly represented in the credit union’s financial statements. The committee members, Norbert Kaczmarek, Ruth Waidley, Rick Macer, Phyllis Ferguson, and William Liebel, also ensures established internal controls are effectively maintained and adequately protect the credit union and its members. Additional, they oversee the internal audit department, who work independently, to conduct ongoing internal audits, to review policies and procedures to mitigate financial, operational, and compliance risks facing the credit union, and to assist the NCUA (federal regulator) with their annual examination. In order to meet the financial responsibilities, the committee retained the services of CliftonLarsonAllen LLP., an independent CPA firm, to complete an annual audit of Erie FCU’s financial statements for year ended March 31, 2015 and to verify accuracy of members’ account statements. This year, as is customary, an unqualified opinion was issued on the financial statements of the credit union. This means the financial statements fairly represent the Erie FCU’s financial results and that practices and procedures followed are in accordance with generally accepted accounting principles. If you have a question relating to the financial health or management of this organization, please do not hesitate to contact us. We are here for you. — Norb Kaczmarek, Chairman, Supervisory Committee
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A sneak peek!
The renovation of the former Glenwood Elementary School building speaks to our history and positions us for future growth and investment in our local communities. Among its many outstanding features, the renovated 41,000 square foot facility will include a 3,000 square foot full-service branch dedicated to member facing operations. The remainder of the facility provides a flexible floorplan allowing for future growth and expansion to support increasing member demand. A variety of financial services will be offered at this location including: new account opening, consumer and business loans, traditional face-to-face teller transactions, drive-thru service including drive-up ATM and night depository, safe deposit boxes, and wealth management services. With the community as a main focus and priority, there will also be a large multi-purpose community room available for local partner and special event gatherings.
A Ground (cake) Breaking Event In December 2015, we had the pleasure of breaking ground (and cake) on our new corporate headquarters and full-service branch. Board members, management, and dignitaries from around the region attended the ceremony.
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Erie FCU’s new corporate headquarters and full-service branch is expected to be completed by the spring of 2017.
Helping build a member’s dream Buying a home can be one of the largest financial transactions most people will ever make, and unfortunately, the one they are least prepared. Tia Young attended one of our fall seminars to learn more about the home buying process. During the presentation, she became concerned that she and her young family were not ready to make the move. That’s when Valentina Buckel, Erie FCU’s Director of Mortgage Services, and Tia’s realtor stepped in. After a number of conversations with Val about credit, seller assist, interest rates, closing costs, and the benefits of owning a home versus paying rent, Tia began to feel more confident about pursuing her home ownership dream. She ultimately made the decision to apply for a pre-approval. With the help of her realtor, who is an Erie FCU partner realtor, Tia purchased her home and was very happy that Val stayed in contact to help throughout the whole, sometimes confusing process. She was even happier, after the loan closed, to earn a cash rebate of her realtor’s commission. Tia used the extra money to buy paint so she could brighten up the house she would soon call Valentina Buckel
Tia Young
“home.” Welcome home.
NMLS#414454
First Front Door Program | Help for first-time home buyers Erie FCU made a conscious effort to help first time homebuyers last year by participating in the First Front Door program through FHLBank Pittsburgh. This program is designed to provide financial assistance to low income first-time homebuyers. Through First Front Door (FFD), qualified homebuyers can receive a 3-to-1 matching contribution up to a maximum of $5,000 to go toward down payment and closing costs. In 2015, Erie FCU was proud to have helped four first-time homebuyers secure financing for their dream home.
Who qualifies for FFD funding? •Not be a student working less than 30 hours per week. • Be a first-time homebuyer (which means you haven’t owned a home
within the past three years, or you owned a home only while married •Complete at least four hours of homeownership but not as a single person within the last three years - this includes a counseling prior to purchasing the home. married couple if either has not owned a home in the past three years).
• Secure a first mortgage through a participating lender.
• Have an income at or below 80 percent of the area median income.
• Agree to maintain the home for five years to retain the full
amount of the grant. If a sale occurs before the five years
expire, a portion of the grant may be required to be repaid.
Funds are available on a first-come, first-served basis until all funds are exhausted. Interested borrowers can contact the mortgage department to apply.
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one Community! Sp Our gift to the Eri ical tor His the ssion” to sor of “free admi wn Holidays at eto om “H e’s Eri Society of nsion & tson-Curtze Ma the Manse” at Wa r. nte Ce y tor Hagen His
Winter-time golf on the peninsula? Team Erie FCU was up for the challenge! Frosty fun “fore” a great cause with proceeds benefitting the Presque Isle Partnership.
Answering phones, raising money at the WQLN Auction! Team Erie FCU, a year-long supporter of Public Broadcasting.
Investing in the education of our area’s children! Combining the beauty of nature while nurturing the beauty of childhood education. Investing in the future of our Erie youth! Discovery Corner at the expERIEnce Children’s Museum.
ery goal, There for ev ery win! ev every save, U proudly FC ie Er am Te ers! the Erie Ott supporting
Halloween fun at Sparrow Pond Family Campground! A ghoulish membership advantage! Spooky sponso r of their “Haunted Hayride” and family Hall oween events! As American as baseball, hotdogs and Erie FCU! We proudly “pla y ball” with our year-long support of the Erie SeaWolves!
Proud sponsor of the city of Edinboro’s year-long 175th anniversary celebration.
Remembering those who strive to keep our nation great. Paying tribute to our veter ans and troops with our “Good Deeds” day fundraising efforts with the Erie SeaW olves!
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Rolling up our sleeves to build a stronger community with the Greater Erie Area Habitat for Humanity in the “Celebration House” build!
Saving the environment, protecting our member’s identity. Bus iness as usual at our annual “Shred Day .”
Products & Services
We offer our Members a comprehensive range of financial products and services. Whatever you need, you’ll find it at Erie FCU.
Erie FCU’s new online and mobile banking platform lets you check your account balance, transfer funds, pay bills and more — wherever you are. Plus, with the locator function you can easily find your nearest branch or ATM. It’s the ultimate in banking convenience.
SAVINGS & RETIREMENT • Regular Savings Account
CONSUMER & HOME LOANS • Mortgages
CHECKING & SERVICES
BUSINESS SERVICES
• Home Equity Loans & Lines of Credit
• Free, Premium, & Dividend +Plus
• Commercial Loans
• Round-Up Program
• New & Used Auto Loans
• Checking Options
• Checking and Savings Accounts
• Money Market Account
• Recreational Vehicle Loans
• Overdraft Protection
• Merchant Direct Loan Program
• Holiday Club Account
• Personal and Consolidation Loans
• Debit MasterCard®
• Merchant Processing
• Treasure Club Kid’s Account
• Better Choice™ Loans
• MasterCard® Credit Card
• Share Certificates
• Platinum MasterCard® Credit Card
• EZ Money Manager™ - Online/Mobile Banking • EZ Alerts® – Text & Email Alerts
• Small Business Administration (SBA) Loans
• Special Savings Account • EZ Saver™ Debit Card
• Traditional IRA
• Loan Payment Protection Plans
• Roth IRA
• Sallie Mae® Smart Option Student Loans®
• Local & Nationwide ATM access
• MasterCard® Debit Card
• Coverdell Education Savings Account
Honors for Erie FCU •Voted winner in the Erie Times News Readers Poll in the category of “Erie’s Choice in Credit Unions” - 4th year in a row •Voted winner of the Erie Reader’s Best of Erie Awards in the category of “Erie’s Best Bank/Credit Union” - 2nd year running •Voted “Best Credit Union” in the Edinboro Journal’s “Best of the Best” 2015 Reader’s Poll • Won a Card Services for Credit Unions (CSCU) EMI (Exceptional Marketing Ideas) Award – The award was given for our ongoing involvement with youth financial literacy in conjunction with our support of the expERIEnce Children’s Museum •Honored with a Diamond Award (“Radio Series” category) for exceptional marketing efforts in 2015 from the Credit Union
National Association (CUNA) Marketing and Business Development Council. Credit unions from all over the country submitted more than 1,200 entries in several categories, but only a select few took home the top award of Diamond
•2015 Annual Report won 1st place In the Pennsylvania Credit Union Association’s (PCUA) Communications Annual Awards •Each fiscal quarter, DepositAccounts.com evaluates the financial health of every federally insured credit union — more than 6,600 total. 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, Erie FCU earned an A+ health rating, the highest possible rating.
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Small business owners and Erie FCU members like Joe and Amy Makowski are the backbone of our local economy. In addition to serving individuals and their families, Erie FCU is proud to serve the financial needs of many locally owned businesses. UNIFORM OUTFITTERS, LLC., provides uniforms and apparel for Police, Fire, EMS, and Healthcare professions.
Our experienced and trusted business services team is ready to work with you to help your business grow.
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“An investment in knowledge pays the best interest.”— Benjamin Franklin
Furthering Financial Education One way that Erie FCU has remained true to the credit union philosophy of “people helping people” is by providing resources for financial education. In 2015, we continued the grassroots efforts that have been successful in the past, like hosting workshops and seminars, maintaining financial education information on our website, and in our Financial Solutions newsletter. Increasing knowledge of money management and the wise use of credit ultimately leads to a secure and prosperous financial future. We provided financial education to our members, nonmembers, and young people through: •Our work with the Volunteer Income Tax Assistance Program (VITA) that provides free federal, state, and local tax preparation services. The savings to tax filers through the program helps bring more money into the local community.
•Our free seminar series which provides knowledge and resources on a number of topics including: Home buying, college financing, estate planning, social security, and budgeting basics. • Our BALANCE Financial Fitness Program - At Erie FCU, we care about your financial wellness. That’s why we’ve partnered with industry-leading BALANCE to provide you with free access to expertly-crafted financial education and resources to help with your fiscal matters. And should you need, BALANCE can assist with confidential, no-cost financial counseling services to help you develop a sensible budget managing spending and debt. •James J. DeDad Scholarships - The Erie Chapter of Credit Unions’ James J. DeDad Scholarships are available each year to credit union members between the ages of 17 and 24 who are enrolled or will be enrolled as a full-time under graduate student .
Financial Highlights Your credit union is STRONG Deposits are STRONG
Loans are STRONG
Assets are STRONG
$400,000,000
220,000,000
$450,000,000
$375,000,000
190,000,000
$425,000,000
$350,000,000
160,000,000
$400,000,000
$325,000,000
130,000,000
$375,000,000
$300,000,000
100,000,000 2012
2013
2014
2015
$350,000,000
2012
2013
2014
2015
2012
2013
2014
2015
Message from the CFO, Fred Tonty 2015 by the Numbers... 2015 was a very good year for Erie FCU and I am pleased to share some of the highlights with you. Income for the year exceeded $2.2 million. Assets increased over $42 million as Erie FCU grew organically over $17 million and added over $25 million from the merger with 1st Choice Community FCU. Capital remained very strong at 11.05%, significantly above NCUA’s wellcapitalized threshold of 7%. Also, loans grew an astounding 18%, far exceeding expectations as Erie FCU remains top of market in loan and deposit rates.
Fred Tonty
Erie FCU is a financial institution members can trust for both competitive products and services, and for financial stability. 2016 is shaping up to be another good year for growth and earnings.
We appreciate the trust you have placed in Erie FCU as your preferred financial institution. We look forward to continuing to serve you in 2016 and beyond. Going forward, many operational changes will be made this year as we prepare for the opening of our new corporate headquarters and full-service branch in 2017.
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Financial Overview 10
Financial Overview Year Ending December 31, 2015
2015
2014
Assets Member Loans
$ 204,416,936
$ 173,277,265
Allowance for Loan Losses
(1,464,152)
(1,261,643)
Cash
14,723,029
17,570,424
201,339,010
190,170,359
11,419,045
9,869,590
All Other Assets
8,559,528
6,821,777
Total Assets
$ 438,993,396
$ 396,447,772
$ 390,783,298
$ 352,524,334
5,365,745
5,365,745
(827,101)
(885,645)
Investments Building/Equipment
Liabilities Member Savings
Reserves Unrealized Loss/Gain for AFS CMOs Undivided Earnings
43,161,956
Other Liabilities Total Liabilities
38,809,607
509,498
633,731
$ 438,993,396
$ 396,447,772
Earnings Loan Interest
$
Income from Investments Fees & Other Income Total Earnings
10,451,137
$
3,186,558
3,703,679
6,359,799 $
19,997,494
9,969,951 2,732,573
$
16,406,203
Interest Expense Dividends Total Interest Expense
$ (2,578,697)
$ (2,655,957)
$ (2,578,697)
$ (2,655,957)
Operating Expense Compensation, Taxes, Training
$
6,987,064
$
6,169,001
3,476,194
3,264,259
754,765
1,062,447
1,757,136
1,636,739
760,253
598,542
Member Insurance
17,113
32,684
Federal Supervision
77,998
74,215
1,377,210
1,182,843
$ (15,207,733)
$ (14,020,730)
$ 2,211,064 *
$ (270,484)
Occupancy & Operation Promotion & Education Loan Processing Outside Operation Services
Other Expenses Total Operating Expenses
Net Income
* For commentary on financial results see CFO report on the previous page.
We’ll be with you every step of the way. Whether you’re saving for your children’s education, planning for your retirement or securing your family’s financial future, you can trust MEMBERS Financial Services Advisors to help you find strategies to address your long-term financial objectives. Unlike some financial companies, our focus is on investment strategies and service. You can feel confident that you’ll receive the same level of
Brandon Armella, Stacey Iadeluca and Larry Amenta
personal service you enjoy with the credit union,
Meet Your Financial Team
together with the expertise you need to make
Larry Amenta has over 20 years of experience working in the financial services industry.
sound financial decisions.
• Comprehensive financial guidance
• Retirement planning
• 401(K) rollover education and guidance
• Investment management
• Insurance planning To schedule an appointment with an Advisor, call Stacey at 814-825-2436 option 1 ext. 1624 or email Stacey.Iadeluca@cunamutual.com
Larry is committed to working closely with members to develop a comprehensive financial analysis. He is a Registered Representative of CUNA Brokerage Services, Inc., a broker/ dealer with a select portfolio of securities and insurance products. CUNA Brokerage Services, Inc. is a member of FINRA and SIPC. Larry and his wife Jill have two children and currently live in Millcreek where they enjoy spending time with family and friends. Brandon Armella is our newest addition to the MEMBERS Financial Services team. He is a Registered Representative of CUNA Brokerage Services, Inc., a broker/dealer with a select portfolio of securities and insurance products. CUNA Brokerage Services is a member of FINRA and SIPC. Brandon enjoys spending time with family and friends. He currently resides in Erie, with his dog Roscoe.
Representatives are registered, securities are sold and investment advisor, 2000 Heritage Way, Waverly, Iowa 50677, toll-free 800-369-2862. Nondeposit investment and insurance products are not federally insured, involve investment risk, may lose value and are obligations of or guaranteed by the financial institution. CBSI is under contract with the financial institution, through the financial services program, to make securities available to members. RP-1241955.0-0715-0817
Stacey Iadeluca works closely with Larry and Brandon to manage and facilitate member relationships. She has almost eleven years of experience in account support and communication, as well as planning special events hosted by MEMBERS Financial Services. Stacey and her husband, Mike have two dogs and enjoy restoring their 150 year old home. 11
Mission Statement The mission of Erie Federal Credit Union is to responsibly deliver financial solutions that meet the needs of our community.
Strategic Direction Erie Federal Credit Union will continue to strengthen its long tradition of financial stability and service excellence while laying the foundation for future growth and expansion.
Field of Membership If you live, work, worship, or attend school in Erie or Crawford County, PA or you are a child, grandchild, grandparent, parent, sibling, stepchild, stepparent, or step sibling of an existing member of Erie Federal Credit Union, you can belong to the Erie FCU!
BRANCH OFFICE LOCATIONS: 1109 East 38th Street 518 State Street
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1005 Greengarden Road
5500 Zuck Road
3910 Schaper Avenue
(814) 825-2436
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2436 Buffalo Road
1220 West 32nd Street
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1825 Downs Drive
101 Washington Towne Blvd. (Edinboro, PA)
(800) 480-0494
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www.eriefcu.org