HCCU - Annual Report 2017

2017

annual O U R

S T R E N G T H

report I S

C O M M U N I T Y

chairman of

THE BOARD The driving force behind Helena Community Credit Union has always been, and always will be, to put the needs of our membership above all else. From that single

focus, we derived several core values that put us in a position to be successful in the past and will continue to drive our success in the future. We have always worked diligently to preserve capital, maintain financial strength, and look toward alternative sources of revenue, while valuing employees as our most important resource, and consistently striving to produce innovative products and services.

HCCU’s volunteer Board of Directors makes decisions to benefit you, our member-owners. During the past year, we adapted daily to the changing economic landscape and the needs of our members. We offered new products that provide more of what members are asking for, like Kasasa, a checking account that pays members cash rewards. We also know that as technology advances, the possibility of financial fraud increases and so we offered several products that enhance member security and give members more control over their accounts.

With “Community” as our middle name, we strive to do more than offer great financial products and services, by being a positive influence on our community, recognizing that our commitment to Helena makes it a great place to live, work, and play for our members and all who call Helena home. Through our investments in local nonprofits and our volunteer activities, HCCU has shown that we are friends and neighbors, not a large national institution with no interest in the future of our region. We will continue to build on the solid foundation of Helena Community Credit Union, welcoming new members, supporting longtime members, and adding growth and prosperity to this community. We are building a stronger community, one member at a time.

Stan Putnam, Board Chair

from the CEO Helena Community Credit Union launched in 1936 as “Helena U.S. Employees Federal Credit Union.” It was, perhaps, not the best time to launch

a new financial institution as the city of Helena was reeling from a series of nearly 2,000 earthquakes that began in October 1935 and continued through April 1936, demolishing some buildings and heavily damaging others, while sending many citizens fleeing from the city.

The new Helena U.S. Employees Federal Credit Union started small, with a handful of federal employees combining their resources with the goal of helping Helena get back on its feet. It funded projects and helped people around the city recover from the devastation.

Today, our name has changed a few times and HCCU is quite a bit bigger, serving more than 16,000 members in eight different Montana counties, but our mission remains the same: helping people and helping the communities we serve.

We achieve this in lots of ways, of course, but for our members, it means we are constantly striving to improve our products and services with the goal of being the region’s best financial institution. To that end, in 2017, HCCU: Introduced Kasasa, a free checking with a related savings account that pays our members cash back; Shifted to Mastercard debit and credit cards, allowing our members significantly increased security, greater access to an ATM network, and a myriad of other benefits; Introduced Digital Wallets, which prevents fraud and keeps members’ accounts safer; Launched MyCard Rules, which keeps members up to date on their account activity in real time; Refreshed our mobile banking app to make it even more user-friendly; Planned for a significant remodel of our Prospect location, so we can better serve our members; Participated in Integrity Coaching, a first step in an all-staff initiative to provide the best member experience; Received the “Best of Helena” for the credit union category; Supported more than 70 non-profits with donations and/or staff volunteer time.

American poet Theodore Roethke once wrote, “Deep in their roots, all flowers keep the light.” As we head into 2018, HCCU is poised for exciting change and growth, but we remain committed to our roots: helping our members and our communities reach the light and achieve their best.

Greg Strizich, CEO

supe��isory committee REPORT

The Supervisory Committee’s mission is to oversee the operations of the Credit Union to protect the investments of its members.

The Committee meets with the executive management team, independent external auditors, and governmental examiners to ensure the Credit Union operates in compliance with the requirements of state and federal regulatory agencies. The Committee’s work ensures compliance with established policies, procedures, and government regulations.

Our goal – always – is to ensure the internal control environment is effectively contributing to the safety of your credit union. The Committee is pleased to report that for 2017, Helena Community Credit Union is a financially sound organization dedicated to serving its members.

As the Chairperson of the Supervisory Committee, I speak on behalf of the Committee members when I say it has been our pleasure to serve you in 2017. We will work diligently to ensure that the Credit Union remains a safe and sound institution into the future.

Joe Yuricic, Chair, Supervisory Committee

hccu financial REPORT BALANCE SHEET

INCOME STATEMENT

2017 2016 ASSETS 2017 2016

Cash and cash equivalents $ 1,625,024 $ 1,822,816 Corporate Credit Union Overnight Accounts 5,557,126 12,411,938 Corporate Credit Union Contributed Capital 691,982 691,982 Certificates of deposit 21,282,910 16,385,000 Investment securities - available for sale 2,530,200 2,995,730 Investment securities - held to maturity 16,011,356 17,894,364 Accrued interest receivable 445,145 377,124 Prepaid expenses 1,494,281 1,389,825 Loans receivable, net of allowance for loan losses 136,971,658 126,020,451 Loans held for sale - Collateral in liquidation 80,251 32,760 Construction in progress - Property and equipment, net of accumulated depreciation 5,581,784 5,770,558 NCUSIF deposit 1,675,637 1,597,960 Other assets 41,033 1,837 Total Assets $193,988,388 $187,392,345

LIABILITIES AND MEMBERS’ EQUITY

LIABILITIES Accounts payable and accrued expenses $ 821,594 $ Dividends payable - Accrued compensated absences 358,859 Total Liabilities 1,180,452 MEMBERS’ EQUITY Members’ share and savings accounts 170,276,916 Members’ equity, substantially restricted 22,531,020

192,807,936 Total Liabilities and Members’ Equity $ 193,988,388

252,122 291,343 543,464

165,333,763 21,515,119 186,848,881 $187,392,345

STATEMENT OF EQUITY

INTEREST INCOME Loans receivable $5,041,506 $4,986,586 Investment securities 783,213 482,233

5,824,719 5,468,820

INTEREST EXPENSE Dividends on members’ share and savings accounts 566,118 523,433

Net interest income 5,258,601 4,945,387

PROVISION FOR LOAN LOSSES 479,705 380,000

Net interest income after provision for loan losses 4,778,896 4,565,387

NON-INTEREST INCOME Fees and charges 314,357 403,425 Undistributed earnings of affiliate - NSF fees and other 1,655,690 1,404,237 Total non-interest income 1,970,047 1,807,663

NON-INTEREST EXPENSES Employee compensation, benefits, and payroll taxes 3,202,264 3,229,958 NCUSIF assessment expense - Association dues 60,541 43,716 Repairs and maintenance 142,716 117,849 Utilities and communications 175,147 137,050 Education 91,264 70,966 Professional and outside services 1,062,274 1,029,679 Insurance 46,281 43,411 Operating fees 25,203 55,947 Depreciation 228,276 236,277 Property taxes 107,936 104,412 Advertising and promotions 336,313 284,844 Office supplies 81,943 57,575 Cash short 3,647 (362) Annual meeting 1,010 622 Miscellaneous 133,756 271,282 Total non-interest expenses 5,698,570 5,683,227

Net income $1,050,374 $ 689,823

YEARS ENDED DECEMBER 31, 2017, AND 2016

STATUTORY UNDIVIDED AFS MARKET VALUE RESERVE EARNINGS ADJUSTMENT

Balance, January 1, 2016

$6,634,786

AFS-Market Value Adjustment

-

Net income

-

$14,189,848 - 689,823

Transfers, net

273,414

(273,414)

Balance, December 31, 2016

6,908,200

14,606,257

AFS-Market Value Adjustment

-

Net income

-

- 1,050,374

-

TOTAL $20,824,634

662 662 - - 662 (34,472) -

689,823 21,515,118 (34,472) 1,050,374

Transfers, net

266,483

(266,483)

-

-

Balance, December 31, 2017

$ 7,174,683

$15,390,148

(33,811)

$22,531,020

These statements were prepared by management and have not been audited in accordance with Generally Accepted Auditing Standards.

LOCATIONS

MEMBERS

6

PAID IN 2018

$161,700

2,913 BILL PAY USERS

62

EMPLOYEES

860 CREDIT CARDS

16,216

DIVIDENDS

BOARD OF DIRECTORS

Stan Putnam, Chairman + Don Polly, Treasurer + Jim McDonnell, Vice Chairman Kevin Dunn, Director + Tim Crowe, Secretary + Andy Hunthausen, Director + Joe Yuricic, Director

SUPERVISORY COMMITTEE

Joe Yuricic, Chairman + Nancy Everson + Brandy Keely + Dan Sullivan

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S T R E N G T H

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C O M M U N I T Y