2020 ANNUAL REPORT
TABLE OF
mission statement
First Community Credit Union is dedicated to providing the members of the community sound financial services in a personal, professional manner. The credit union is committed to the philosophy of
"people-helping-people."
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contents
Chairman's Report & CEO's Message
Credit Committee Report & Audit Committee Report Statement of Financial Condition Comparative Operating Statement Financial Growth & Distribution of Loans Lending and Business Banking Group Technology Branch Operations FCCU In Your Community Board of Directors & Executive Management Credit Union Management Wealth Advisors
A Report from the
CHAIRMAN
Many things are remembered as "normal" in 2020 that we cannot forget from temperature checks to social distancing to sanitizing, masking up and quarantine. What is more memorable though is the courage, strength, perseverance and, most importantly, resilience shown. It was humbling to witness how our FCCU team and members adapted to overcome the environment at hand. On behalf of the Board of First Community Credit Union, we thank our members for placing your trust in us with your finances. Outstanding leadership during this unique year shined with swift actions to launch health and safety measures, protecting employees and members, while continuing to serve our members. First Community Credit Union’s membership increased to 136,616 members while assets grew by 16.27% ending the year at $1.79 Billion. Our gross loans ended the year at $1.128 Billion, providing much needed funds to members during this unconventional year. The breakdown of our loan portfolio is on page 6 of this report. Our leadership team excelled by establishing increased sanitation practices at branches, moving over 100 employees to work from home, persevering to continue construction on multiple branches including Tower II at our corporate office. I am proud of the entire staff for their resilience, innovation and adaptation during the unique year that 2020 was. Community was more important than ever. Our management and staff stepped up donating over $7,000 back to the community, supporting local food banks, the American Heart Association, the National Multiple Sclerosis Society and Children’s Miracle Network. FCCU demonstrated the philosophy of people-helping-people offering hope and healing to so many. In addition, over $100,000 was donated to schools, local charities and community organizations along with awarding six high school seniors a scholarship to assist with their college/university education. The Board is committed to supporting our members and community while ensuring we maintain a financially strong position. We appreciate our members and are honored to be of service. We look forward to continuing to be your financial partner for life.
Doug Wilcher
Chairman of the Board
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A Message from the
CEO
Resilience defined this last year. We are proud that we remained strong through uncertainty and proceeded to serve our members and communities despite the circumstances we all faced. We endured this atypical year together and are thankful for our members, for their patience, flexibility and navigating the year with us. Our focus remained on our members and has never wavered. As widespread illness increased, our leadership team acted to set in motion necessary changes to protect our staff and members' health and safety. Safeguards were put in place at all branch locations and we successfully transitioned 120 employees to work from home while continuing to serve our members’ needs. When the tough decision was made to temporarily close our in-store branches, banking was uninterrupted due to personal video tellers. Members continued to visit their local in-store branch to conduct their banking as normal. At First Community, we are not just a “bank”; we are financial partners for our members. Our team demonstrated this during the year, assisting with loans that were essential. We helped bridge the gap for those temporarily laid off during the shutdown and processed Paycheck Protection loans for business members; preserving over 700 paychecks for businesses employees. Real Estate experienced a historical year financing over $177 million in home loans, helping over 700 families purchase their new home. The world shifted from in-person interactions to virtual methods of conducting business and we were prepared. Our full suite of virtual banking tools were in place and additional convenience tools were added during the year to make banking one less concern. Members made check deposits right from their mobile device, opened a new account or applied for a loan in less than 10 minutes, all from the comfort of their home.
CREDIT COMMITTEE
report
AUDIT COMMITTEE
report
Our Credit Committee's core responsibility is reviewing the credit union's lending policies and practices. While lending was not top of mind for many in 2020, there was still the necessity for a new car or credit card for some. Numerous members found that it was the right time to look for a new home or refinance their existing home, seeking to reduce their payment or pay off their home sooner.
Based on an in-depth independent audit of the operations of First Community Credit Union, the CPA firm of Doeren Mayhew CPAs and Advisors concluded that, in their opinion, the financial position of FCCU, the operations and cash flow for the year ending December 31, 2020, conforms with generally accepted accounting principles and practices.
Our loan officers reviewed 41,024 applications for auto loans, credit cards, personal loans and real estate loans. FCCU funded $344.15 million and closed the year with a loan portfolio of $1.128 Billion.
As a state-chartered credit union, FCCU has additional reviews of our lending and accounting practices by the Texas Credit Union Department and by Federal Examiners with the National Credit Union Administration (NCUA). In their annual audit, Texas State Examiners and NCUA Examiners found First Community Credit Union sound in both policy and practice.
As we navigated the pandemic, we continually offered competitive rates and fast, efficient service to assist our members when it was most important. While the current environment was uncertain, the real estate market remained strong. Through our expanded real estate programs, FCCU financed a home for 793 families. Due to the countless hours put in over the years to improve our online loan process, we were set up for success to serve members in a socially distanced manner, safeguarding all. From application to closing, members secured the funds desired in a safe, quick and easy way without leaving their home. FCCU strives to assist members with the loan they need when they need it. Arlie Beckendorf Chairman, Credit Committee
Sally Moseley
Chairman, Audit Committee
In addition, we completed Tower II at our corporate office in Copperfield. It is exciting to fuel more growth overall with our new space. Seven branch locations were remodeled as well to further support our member’s busy lives with extended banking hours. First Community remained strong, ending the year at $1.79 Billion in assets. Exceptional teamwork from our board of directors, management team and staff led to First Community maintaining a solid financial position during an unprecedented year. While we all experienced hardships, heartache and more, we also pulled together to triumph. Finally, I announced my retirement will take place in August 2021. I am honored to serve you, our members, and have been blessed to do so for 43 years. TJ Tijerina will assume the role of President and CEO of First Community. TJ will continue growing the credit union and maintain a member-centric focus. In 2021-22, First Community will expand our footprint further with three new branches around town for increased access. As your financial partner for life, thank you for trusting us with your finances and know that we will continue to serve you for years to come.
First
Community Credit
Union
Ron Downing President/CEO
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comparative operating S T A T E M E N T Interest Income Interest on Loans to Members Interest on Investments and Cash Equivalents
TOTAL INTEREST INCOME
S T A T E M E N T O F financial condition ASSET S Cash
2020
$247,161,172
2019
$70,175,756
Investments Available for Sale Held to Maturity Other Investments Loans to Members, net Accrued Interest Receivable Investments
2019
$1,602,644,446
$1,362,676,395
Accounts Payable
3,310,397
3,715,645
Accrued Liabilities
20,448,463
25,679,434
Liabilities Members’ Share Accounts
245,433,472
246,338,351
0
0
1,727,700
1,719,100
1,123,847,303
1,156,455,701
T OTAL L I ABI L I T I ES
$1,626,403,306 $1,392,071,474
Members’ Equity Regular Reserves
723,923
3,621,403
3,490,785
Undivided Earnings
Other Receivables
6,060,887
6,238,973
Appropriated Undivided Earnings
Prepaid and Other Assets
4,564,339
10,086,594
Property and Equipment
50,719,422
33,833,077
NCUSIF Deposit
14,208,922
12,316,756
$ 1 ,7 9 2 ,0 9 9 ,2 3 4
$1,541,379,016
TOTAL ASSETS
NET INTEREST INCOME
2020
741,026
Loans
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L I ABI L I T I ES AN D MEMBERS’ EQU I T Y
Interest Expense Members’ Share and Savings Accounts
13,213,020
13,213,020
146,734,829
135,588,348
0
0
5,748,079
506,174
$165,695,970
$149,307,542
Accumulated Other Comprehensive Gain/Loss
T OTAL MEMBERS’ EQUITY T OTAL L I ABI L I T Y AND MEMBERS’ EQU I T Y
$ 1 ,7 9 2 ,0 9 9 ,2 3 4 $ 1 ,5 4 1 ,3 7 9 ,0 1 6
Provisions for Loan Losses
NET-INTEREST INCOME AFTER PROVISIONS FOR LOAN LOSSES Non-Interest Income Fees and Service Charges Other Non-Interest Income
TOTAL NON-INTEREST INCOME Non-Interest Expense Compensation and Benefits Office Operating Costs Education and Promotion
TOTAL NON-INTEREST EXPENSE NET INCOME
2020
2019
$48,439,330 4,825,651
$48,671,672 6,305,124
53, 264, 981
54, 976, 796
10,861,202
11,968,779
42, 403, 779
43, 008, 017
5,057,000
6,268,000
$37, 346, 779
$36, 740, 017
19,378,321 6,198,536
21,446,012 5,339,652
25, 576, 857
26, 785, 664
24,868,839 23,295,156 3,613,158
25,736,207 21,663,377 3,528,106
51, 777, 153
50, 927, 690
$11, 146, 483
$12, 597, 991 5
financial G R O W T H
distribution O F L O A N S
ASSETS 2016 2017 2018 2019 2020
$1.249 B $1.355 B $1.423 B $1.541 B $1.792 B
RE AL E S TAT E 32.17%
AUTO N EW US ED 16. 90% 26. 07%
Work from home orders and other safety protocols did not hinder us from being available to our members. Our complete online loan process, from application to funding, enabled members to obtain the important funds they sought out, all from the comfort and safety of their home. 62% of all loans approved were funded, when it was most crucial. FCCU is proud to be your financial partner helping to achieve your financial goals.
$1.014 B $1.054 B $1.099 B $1.159 B $1.128 B
2016 2017 2018 2019 2020 6
OT H E R 3.45%
C OM M E RC I AL 11.67% UN S E C URE D 9.75%
B E LOW I S T H E EN D O F YEA R B R EA K D O W N OF OUR P O RT F O L IO B Y L O A N T YP E:
MEMBERSHIP 120,801 125,229 129,910 133,785 136,616
No two people have the same journey in life nor do they have the same necessities for a loan(s) on that journey. While a new car or taking a vacation went by the wayside for many in 2020, the real estate market was thriving. Adjusting to working from home, our lending team prevailed and didn't miss a beat. FCCU funded $179,773,351 in home loans, the highest total in credit union history; empowering 793 families to secure their new home. Recognizing many unexpectedly faced being out of work, we immediately delivered resources to lessen the weight on member's shoulders by way of emergency loans, skipping loan payments, reducing fees and more.
GROSS LOANS 2016 2017 2018 2019 2020
lending S O L U T I O N S
CREDIT CARD LOANS AUTO LOANS AUTO LEASES REAL ESTATE LOANS OTHER LOANS COMMERCIAL LOANS
$ 59,832,506 $442,866,563 $ 41,869,796 $362,976,722 $ 89,057,159 $131,671,548
Business BANKING GROUP In a rapidly changing world, business owners found themselves facing new challenges to survive. Confronted with uncertainty and pressure to act quickly and decisively for both the business and their employees, business owners remained resilient in spite of adjusting to working from home or closing their business, temporarily or permanently. At First Community, we are part of your team and delivered relief of $2,085,269 in commercial loan payment deferrals. In March, the Paycheck Protection Program (PPP) was released for businesses to ensure their employees would not go unpaid. $5,086,300 in PPP loans was financed, saving 782 employee paychecks for our business members' companies, making it possible to persevere and continue striving to meet their goals. Our dedicated Business Banking team partners with you to identify the optimal products, services and loan(s) that fit your business's needs. Running your business day to day is easier with our secure, streamlined conveniences putting time back in your day. With our full suite of fraud prevention tools, businesses are confident in knowing we have them covered. We provide the tools to manage and protect your business while you remain focused on continuing to move your business forward. In 2020, 95 business owners reviewed their current banking relationship and moved to First Community to benefit from the robust resources we provide. FCCU has the options to help you achieve your goals; after all, your success matters to us.
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technology We continue to lead the way as a high-tech, high-touch credit union. Our technology team provides highperformance digital platforms with efficient processes to keep your money safe and secure. Mobile Banking is secure, convenient, easy to use and saves members time and money. Technology initiatives were fast-tracked to implement additional contactless banking tools to enhance convenience and self-service by way of technology. A few of our 2020 achievements include:
ENHANCED ONLINE BANKING FEATURES:
• A Forgot Username recovery link was introduced to help members regain access to Online Banking. • Our Skip A Pay request form was integrated to grant an immediate decision on members' requests.
NEW DIRECT LINKS FOR HASSLE-FREE ACCESS TO: • Savvy Money for free credit report monitoring and score.
• Visa® FCCU Rewards for quick review and redemption of FCCU Reward Points for credit cardholders. • FCCU Card Manager for monitoring activity on credit and debit cards to be proactive in fighting fraud. • Quick Links for access to the most popular functions utilized.
CYBERSECURITY:
Cyber criminals are always on the hunt to steal others personal information. As the majority remained under stay at home orders, fraudsters capitalized on any opportunity they found to scam people from stimulus check fraud to unemployment fraud to vaccine fraud. At FCCU, we pride ourselves on maintaining the highest level of security protections and protocols. Educating members is a key element of the fight against cybercriminals. Awareness tools for learning how to recognize red flags and prevent potential fraud will be available in the near future at FCCU.org.
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At First Community, you are part of the credit union family and we thank you for your support and adjusting with us during the year. Beyond the year being a test for all, it was a testament of the incredible efforts by everyone. From acting quickly to purchase sanitizer to adjusting the layout of branches to support social distancing, tremendous teamwork was displayed day in and day out. We pivoted to new ways of connecting and conducting day-to-day business with increased health and safety measures in place. It was imperative to implement increased communication, maintaining transparency in an ever-changing environment. We equipped members with fundamental assistance through emergency loans, skipped payments, waived fees and more during the complex year. Over 12,812 Skip-A-Pay requests were processed, putting some wiggleroom in member's budgets. As we all moved to a touchless world, our personal video tellers remained available, along with the flexibility of extended hours, to connect with members via video, including the short time that our in-store locations were temporarily closed. 1,051,945 teller transactions were processed for members. Mobile Deposits proved to be a vital tool, increasing by 10.66% with 178,588 deposits made for a total of $107,216,088.
branch O P E R A T I O N S Our suite of virtual banking tools provided the resources needed to bank from the comfort of home. Collaboration and innovation resulted in incorporating further technology for an even smoother banking experience.
We launched a text feature allowing members to wait comfortably in their vehicle for their appointment with a representative. A text was sent to the member when a representative was available.
Our complete online account opening application was streamlined for a simple opening process.
289,286 members were assisted by our Call Center during normal business hours, an increase of 10.16%.
Online and phone payment tool usage increased with 28,617 payments made through ACH or a debit or credit card from another financial institution.
eBranch maintained a 100% electronic experience to open an account or obtain a loan. eBranch communicated through the preferred channels of phone, email or text.
The expansion of Tower II at our Corporate Office in Copperfield was completed and supports the ongoing growth of First Community.
We remained resilient and completed seven branch remodels to serve members and the community better.
MEMBERS AND EMPLOYEES ADAPTED AND REMAINED RESILIENT WHEN FACED WITH A NEW "NORMAL". REGARDLESS OF WHAT ANYONE MAY HAVE BEEN DEALING WITH, A HELPING HAND WAS NEVER FAR AWAY AT FIRST COMMUNITY. FCCU is proud to be your financial partner for life. 9
S C HOL A R SHIP WIN N E R S
V IRT U A L CHO I R P E RFO RMA N CE S WI T H KLE I N HS , CY- FA LLS HS & MO RT O N RA N CH HS
R ED R ANGER VIRTU AL H OLIDAY PARTY
F C C U in your community First Community’s deep community roots remained strong even during an uncommon year. Being faced with the obstacle of schools and businesses shutting down, we reimagined how to connect with our community through virtual platforms. When schools moved to online learning, it was evident that we would not be able to honor teachers in their classrooms through our Stars in the Classroom program nor would we be able to hold a holiday party with Santa for our youngest members or collect food and toys during the year because, well, COVID and social distancing. We were not defeated though; we remained resilient and developed new ways to continue our mission of giving back to our communities. Stars in the Classroom, in partnership with the Houston Texans, went virtual with FCCU and Houston Texans Linebacker, Brennan Scarlett (#57) popping into Zoom classes to surprise our winning teachers. FCCU honored our ten Stars in the Classroom winners with a donation of $500 benefiting their school district for a total of $5,000 going back to schools
in our communities. We also presented the TORO’s Reading Challenge through social media channels to encourage students to read during the summer months with an opportunity to win prizes. Joy and hope were brought to members through our $500 Fridays program. $500 Fridays was expanded to call for nominations of a teacher, first responder or business owner to award this unexpected gift to. We proudly awarded $14,500 to deserving individuals. FCCU pledged $100,000 to the community and steadily supported local food pantries, the American Heart Association, the National Multiple Sclerosis Society and Operation Stocking Stuffer Toy Drive through monetary donations since we could not connect in person this year.
S TA RS I N T HE CLA S S RO O M WI N N E RS
$500 F R IDAYS W INNER
SPIR IT W EEK SU PER HER O DAY
In addition, we continued awarding scholarships to high school graduates through our annual scholarship program, assisting with their college/ university education.
LOOKING AHEAD TO 2021,
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we will remain resilient for the Houston Community.
O P E RAT I O N S T O CK I N G S T UFFE R T O Y DR IVE
BLOOD DR IVE
F OOD DR IVE DR OP OF F
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B O A R D O F D I R E C T O R S and E X E C U T I V E M A N A G E M E N T
senior M A N A G E M E N T Tricia Smith Lance Morgan Jennifer Kilgore Katie Rigby Jon Hartman
Sally Moseley
Douglas Wilcher Chairman
Julie Eisenhauer
Vice Chairman
Term Expires: March 2023
Rob Hauck
Secretary
Term Expires: March 2021
Treasurer
Term Expires: March 2021
Term Expires: March 2023
Mark Palomo Amber Pierce Larry Pugh Mark Vinson Larry Hook Carey Rivera
Arlie Beckendorf Director
Term Expires: March 2023
Marty Miracle Director
Term Expires: March 2022
Robert Schumacher Director
Term Expires: March 2022
Denise Farnon DeAndre Massey Eric Vasquez Taylor Borja Chris Gagne
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Asset Recovery Audit Call Center Card Services Commercial Lending Commercial Lending
Ron Downing
Keith Domingue
Rito Garza
TJ Tijerina
Don Mazingo
Nancy Trennel
President and Chief Executive Officer
Chief Financial Officer
Chief Information Officer
Chief Operations Officer
Chief Lending Officer
Chief Marketing Officer
Aliana Alief Barker Cypress Bunker Hill Champions
Accounting Compliance & Legal Counsel Development & Project Management Human Resources Information Technology
Randal Ward Amber Magee Velsie Borja Arthur Gordon
vice P R E S I D E N T S
Jill Vinson Steve Gregg Darrell Storrs Robbie Henegar Jesse Rocha Bryan Perkola
Consumer Lending Enterprise Risk Management Facilities & Construction Management Fraud Management Indirect Lending Information Security
Lending Marketing & Member Experience Operations Operations
Stephen Martin Jody Kohlmaier George Cheairs Karon McMahan Sabrina Atkinson
branch V I C E P R E S I D E N T S Diego Daza Joy Stuart Julie Scott Eric Vasquez Alex Samoilov
Cinco Ranch Copperfield eBranch Fairfield ITMs
Taylor Borja Daniel Fernandez Denise Farnon Kim Lemex Matthew Staton
Katy Market Sam Houston Sienna Spring Branch Spring Market
Network & Infrastructure Product Management Real Estate Special Services Staff Development
Lana Huff Jamie Drohan Kelly Fay Everett Donegan
SVP, General Counsel, VP of Internal Audit and VP of Information Security were hired. VP of an In-Store branch resigned and a new VP for an In-Store branch was hired. VP of Commercial Lending resigned and a new VP of Commercial Lending was hired. VP, Cost Accountant resigned.
Sugar Land Technip Tomball The Woodlands
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First Community
Wealth Advisors At First Community, we make available Wealth Advisors as a resource for our members’ investment and insurance needs. Whether you have specific financial questions or want to get serious about planning and saving, our Wealth Advisors are here to listen, understand your goals and work together to find the right financial path for you. Your visit and planning sessions are complimentary. It’s never too early to start planning for retirement, college tuition for your children or to protect your family with life insurance. RETIREMENT PLANNING
ANNUITIES
ASSET ALLOCATION
STOCKS, BONDS, TRUSTS
MUTUAL FUNDS COLLEGE FUNDING | 529 PLANS
LIFE, DISABILITY OR LONG-TERM CARE INSURANCE
Our investment team is ready to meet with you to lay out your personal financial roadmap. They are prepared to match your unique situation with strategies that will help you reach your goals. Brian is a Certified Financial Planner® and Jodie is a Financial Advisor who can provide you with sound financial advice. To schedule a complimentary consultation, call 281.856.5644.
Brian Turpen, CFP ® VP of Wealth Management
“EVERY MEMBER WILL RECOMMEND
First Community Credit Union T O T H E I R FA M I LY A N D F R I E N D S . ”
Jodie Smith Financial Advisor
Wealth Advisors supported by CUNA Brokerage Systems (CBSI) and these funds are separate from those deposits that are held by First Community Credit Union.*Securities sold, advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor. CBSI is under contract with the financial institution to make securities available to members. Not NCUA/NCUSIF/FDIC insured, May Lose Value, No Financial Institution Guarantee. Not a deposit of any financial institution. CUNA Brokerage Services, Inc., is a registered broker/dealer in all fifty states of the United States of America. The CFP® certification marks are not affiliated with CUNA Brokerage Services, Inc. FR-298936S.1-0320-0422
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vision S T A T E M E N T
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"resilience
compassion for ourselves as well as compassion for others."
is based on
- Sharon Salzberg
Your Financial Partner for Life