First Community Credit Union 2022 Annual Report

Annual

Report

2022

Agenda March 20, 2023 | 5:30 PM Farmers Union Conference Center | Jamestown

Call to Order Invocation Report of Registration Minutes of Previous Meetings Financial Report Report of the President Old Business New Business Report of Nominating Committee Adjourned Drawing of Prizes Meal Served The Annual Meeting is governed by Robert’s Rules of Order.

Annual Meeting Minutes March 15, 2022 The 83rd Annual Meeting of First Community Credit Union was held on Tuesday, March 15, 2022 at the Farmers Union Conference Center.

Chair Owen Olson called the meeting to order at 5:30 p.m. Rebecca Pergotski gave the invocation.

Chair Olson introduced the head table and the Audit Committee. Steve Schmitz, CEO, reported who serves on the First Community Scholarships LLC Board.

The report of registration showed 87 members and five guests, constituting a quorum.

A motion carried to approve minutes of the June 15, 2021 Annual Meeting as printed in the brochure.

Chair Olson provided the report of the Board of Directors.

Sean Rinkenberger, CFO, reviewed the Statement of Financial Condition as of December 31, 2021. A motion carried to approve the financial report as presented.

Steve Schmitz provided the report of the President. He reported FCCU has had continued growth and throughout much uncertainty, our Credit Union remains financially strong. Assets have grown to be $1.06 billion at the end of the year, exceeding the $1 billion dollar mark for the first time in our history last March. He addressed the near completion of the Mandan branch and the remodel of our Devils Lake branch.

We merged with Elm River Credit Union with branches in both Page and Kindred.

Chair Olson called for Old Business. There was none.

Chair Olson called for New Business. There was none.

A motion carried to approve the actions of management and the Board of Directors for the past year.

Sandy Franke, Chair of the Nominating Committee, introduced the other Committee members (Sue Corwin and Jason McKenney) and the three candidates running for the Board of Directors: Owen Olson (incumbent) and Mark Watne (incumbent) and Douglas Kalianoff. Chair Olson declared the vacancies be filled by acclamation. Dayne Headland has retired from FCCU’s Board of Directors after nearly 30 years of service and impact on our credit union.

A motion carried to adjourn.

A Message from our President Our 2022 was another busy year for FCCU.

the future, so we have to keep moving

We started off with the lingering effects

FCCU forward.

of Covid, primarily dealing with historic

expect to see in 2023 include the complete

inflation which hasn’t been seen since

the renovation of our Bismarck North

the 1970s. High inflation is a difficult

branch in the first quarter. Additionally,

environment for a credit union to work

we plan to break ground for a new branch

through as it creates a lot of unknowns. But

facility in Moorhead, MN this spring.

A couple highlights we

despite all of this, we moved forward and completed several large projects that we’re

Perhaps the biggest project in 2023 will be

proud of in 2022.

the introduction of our digital journey to the membership. We have allowed online

Firstly, we opened a new a branch facility in

access to FCCU accounts for more than

Mandan, ND. This was the culmination of

20 years, but the digital transformation

a project that started initial planning way

will take that to a whole new level. As we

back in 2017. Everything came together

move forward, members will be able to

perfectly

amazing

do everything from your phone or home

building representing both FCCU and the

computer, whether that is applying for a

community of Mandan.

loan and getting instant approval, opening

and

we

have

an

a new account, or signing documents and We also completed a major remodel and

almost anything else you might have to

upgrade of our Devils Lake facility. It was

come to a branch for right now.

a great building, but hadn’t been updated since the 1990’s. This project turned out

As our credit union grows, all of us

really well and basically we have a new

involved have to grow as well. We cannot

building which is an important investment

afford to maintain status quo; we cannot

and asset in the Devils Lake community.

afford to rest on past successes; we need

Another large project in 2022 was our

to constantly look for ways to improve

merger with Elm River Credit Union. This

ourselves and the credit union, doing

added branches in both Page and Kindred.

things better each year – and that’s a

It also added more than 1,000 members

difficult ask. But our employees and the

from these communities and five great

Board have consistently stepped up, year

staff to our FCCU team.

after year, and words cannot express how appreciative I am of their efforts.

Finally, and most importantly, we had another strong year financially with solid

And to our members – YOU are the credit

income, and growing over 100 million in

union and I want to thank you for your

loans and nearly 90 million in total assets.

continued trust and dedication to FCCU.

Looking ahead into 2023, we know growth will be a continued focus. If we aren’t growing, we will not be able to continue meeting the needs of our members into

Steve Schmitz, President & CEO First Community Credit Union

2022

Year in Review Elm River Merger, Grand Openings, Kasasa 2 Million Campaign and more!

Elm River Merger FCCU and Elm River Credit Union, a strong, wellcapitalized, agriculture-based credit union finalized our merger mid-year. Through this merger, FCCU gained an additional two branches in Page and Kindred and over 1,000 members, along with five employees to the FCCU team. Both FCCU and Elm River’s community values, culture and business approach aligned well, resulting in a positive merger.

Grand Openings A new branch has been highly anticipated in Mandan for some time now. In late June, we gathered with the local chamber and members to celebrate the ribbon cutting and grand opening of this new Mandan building.

This new facility is just over 20,000 total square feet, three stories high, constructed of structural steel and sits on 1.58 acres.

With a maximum occupancy of 330 people, this building features an open atrium lobby, multiple conference rooms, safe deposit box room, 14 offices, a large breakroom with a full kitchen and walk out open patio, three driveup lanes and a drive-up ATM. This new Mandan branch also has tenants and a 1,336 square foot community room, open for the public and features a beautiful Mandan and FCCU history wall. This new location expands First Community Credit Union across the Missouri River for the first time and has provided exciting opportunities for FCCU in the strong Mandan community.

Our Devils Lake grand opening was held in October. This remodel was completed of both the interior and exterior of the branch. A full demolition of the previous drive-up canopy and lanes took place to allow for wider lanes and a new canopy to complement the existing structure. The ATM machine has now been integrated into the drive-up lanes, along with a few other exterior improvements. Additionally, the interior was totally remodeled, with a new layout, flooring and more. The remodel includes the safe deposit vault moved, three new offices added, an entire new walk-up teller line and remodel of the drive-up teller line, to better use the space in the branch.

Kasasa $2 Million Campaign In a time when most banks or financials will fee someone for having a checking account, we wanted to highlight that we rewarded our members by paying back $2 Million in rewards to our Kasasa checking account members in 2021. This multi-faceted campaign not only highlighted our awardwinning checking account, but featured our very own FCCU staff. With the theme of “Celebrating $2 Million in Kasasa Rewards”, each staff member had their own way of celebrating. We then pushed this campaign on billboards, TV ads, social media, direct mail and more.

Fraud Campaign To help protect and educate our members, in 2022 we created a special fraud campaign.

With fraud on the rise across the United States, we felt it was necessary to educate our members and make sure they are protected. The campaign included blog articles, quick tips for avoiding scams, fraud podcasts, links to scam awareness resources and more.

Additionally videos were created to show members how to use FCCU cards app to prevent fraud.

FCCU

By the Numbers Our community first laid its foundation in Jamestown, ND in 1939 with only 45 members. Over 80 years later, we now have branches across ND & MN, serving over 46,000 members.

MORE THAN

2022

$600,000

through donations and sponsorships

$60,000 OVER

in college scholarships

1,500 volunteer HOURS

Quarterly

Charities

Every quarter, staff selects a local charity and donates

funds, items and time.

Community Impact FCCU is proud to not just do business in our communities, but also support them by giving back. We donate money, sponsor various events and organizations, volunteer our time, attend events and the list goes on and on.

Our quarterly charity is a unique way we support important causes in the region.

Since 2014, FCCU employees have chosen an organization each quarter to support by raising money and awareness. The funds are raised through Friday jeans money and other specific activities that relate to the cause. Here’s a look back on the positive impact in 2022.

Continued

Community Impact

Q1 Alzheimer’s Association The Alzheimer’s Association is the leading voluntary health organization in Alzheimer’s and all other dementia, care, support and research. FCCU was able to raise $3,000 to be given to benefit local senior centers as well as the Minnesota-North Dakota Alzheimer’s Association Chapter, for Alzheimer’s care, support, research, awareness and advocacy.

In addition to the Alzheimer’s support, FCCU donated $1,200 to Guardian Angels. This nonprofit based in Jamestown, ND, provides guardianship and conservatorship services for people throughout the state of North Dakota. FCCU staff also made over 500 Valentine’s Day cards for senior centers throughout our local communities.

Q2 Cancer Causes Cancer is a cause that affects nearly everyone, in some way. FCCU was proud raise $4,500 for this worthy cause. The Bismarck Cancer Center, Altru Cancer Center in Grand Forks and the Jamestown Regional Medical Center’s Cancer Center all received $1,500 for their gas programs which assists cancer patients with transportation, nutritional supplements, housing accommodations and more.

Q3 Children’s Miracle Network Hospitals FCCU was able to raise $5,000 for our third quarter charity, Children’s Miracle Network Hospitals (CMN). The CMN hospital serving us and our members is Sanford Children’s Hospital in Fargo, providing the most advanced and specialized pediatric care for children in the state of North Dakota and northwest Minnesota. The donation will stay local with 100% going to fund critical treatments and healthcare services, pediatric medical equipment and charitable care.

Q4 Safe Shelters With the help of our communities and members, FCCU was able to raise more than $6,000 to support local domestic violence safe shelters. One organization from each region was selected to receive $1,000 of the funds raised: Grand Forks- CVIC, FargoChurches United, Jamestown- Safe Shelter, South Region- Someplace Safe, Bismarck/ Mandan- Abused Adult Resource Center and Lake Region- Safe Alternatives for Abused Families (SAAF).

2022

Awards & Recognition Dora Maxwell Award, Dakota Credit Union Association Hall of Fame Inductee, and much more!

In 2022, FCCU was recognized by the Dakota Credit Union Association (DakCU) with several awards. Recognized for our community involvement, FCCU was presented the Dora Maxwell award. FCCU received this award for our charity support towards suicide prevention, raising more than $3,000 and awareness for the organization. In addition, FCCU received the 2022 Desjardins Financial Education for our podcast, “Let’s CU Succeed”. FCCU started the podcast in early 2021 and has since published more than 32 episodes ranging from tips on buying your first home to budgeting, student loans, fraud protection, and more.

Additionally, FCCU received the Marketing and Communication Award for our outstanding efforts for its “Life is Better with Community” campaign to support membership engagement, growth and brand awareness.

The most prestigious of all the DakCU

of the Top 10 Best Places to Work by the

awards was given to Dayne Headland,

Young Professionals of Bismarck and being

former FCCU board member who was

named the Best Credit Union in Fargo.

inducted into the Dakota Credit Union

Additionally, the USDA Rural Development

Association (DakCU) Hall of Fame. This

recognized FCCU as a top rural housing

honor is based on lifetime achievement

lender in North Dakota. This was a huge

within the credit union movement. Dayne

honor for the FCCU home loans team.

retired in 2022 from the FCCU board of directors after nearly 30 years on the board,

The FCCU Volunteer of the Year for 2022

the longest standing board member at

was Amanda Thrift, Jamestown Retail

FCCU.

Manager.

Amanda

volunteered

more

than 170 hours in the Jamestown and FCCU also was awarded by the Credit

surrounding communities in 2022. She

Union

a

actively participates in Kiwanis, Prairie

Marketing and Business Development

Paws Rescue and Jamestown Tourism in

Diamond Award. FCCU was awarded a

addition to volunteering at FCCU events.

National

Association

(CUNA)

national Diamond Award for the category of “Complete Campaign” for our “Life is Better with Community” campaign.

Other recognition in 2022 includes being selected as one of the Top 50 Best Places to Work in the region by Prairie Business for the third year in a row, being named one

Financial Overview

Statement of Financial Condition ASSETS Loans (Net of allowance) Cash & Investments Property and Equipment Other Assets Total Assets

Dec. 31, 2022 $ 859,816,143 266,709,268 39,983,570 29,231,230

Dec. 31, 2021 $ 722,329,348 275,336,740 36,361,375 26,824,762

$1,195,740,211 $1,060,852,225

LIABILITIES AND EQUITY $9,444,525 83,500,000

$6,085,015 0

Total Liabilities

92,944,525

6,085,015

Member Shares and Deposits

978,000,877

917,599,320

1,070,945,402

923,684,335

124,794,809

137,167,89

Accounts Payable Notes Payable

Total Liabilities & Member Deposits EQUITY Total Member Equity Total Liabilities & Equity

$1,195,740,211 $1,060,852,225

Statement of Income INTEREST INCOME

2022

2021

$34,148,677 4,590,565

$30,652,002 3,491,358

38,739,242

34,143,360

Interest Expense Provision for Loan Losses

(4,186,370) (560,000)

(3,539,346) (480,000)

Net Interest Income

33,992,872

30,124,014

Non-Interest Income

13,130,089

16,291,398

$47,122,961

$46,415,412

Compensation and Benefits Operations and Administrative Occupancy

$22,568,826 11,132,501 2,976,274

$20,694,525 10,456,120 2,530,591

Total Expenses

36,677,601

33,681,236

$10,445,360

$12,734,176

Loans Investments Total Interest Income

Total Income EXPENSES

Net Income

Assets

Membership

D

Deposits & Loans Since 2000 Millions

600 500 400

700 600 FCCU

400

300

Deposits

300

200

Loans

200

100

100

2004

2002

2000

2018

2016

2012

2010

2008

2006

2004

0 2002

0

800

500

2000

Millions

Deposits & Loans Since 2000

Management Team

Steve Schmitz President & CEO

Sean Rinkenberger Chief Financial Officer

James Vollrath Chief Technology Officer

Stephanie Finck Chief Operations Officer

Craig Grundstrom Chief Development Officer

Darin Finck Chief Lending Officer

Amie Aesoph Chief Human Resources Officer

Janna Bergstedt Chief Marketing Officer

Steve Davis Senior VP, Mortgage

Mary Radenz VP of Mortgage Lending

Fred Wolff VP of Risk & Compliance

Catherine Powers VP Loan Operations

Todd Humphrey Regional Senior Credit Officer, VP

Mike Heidt Regional Senior Credit Officer, VP

Jason Gruebele Regional Senior Credit Officer, VP

Zachary Dosch Bismarck Market President

Chris Howell Fargo Market President

Derek Holt Grand Forks Market President

Nick Schauer Jamestown/ Valley City Market President

Heather Johnson Lake Region Market President

Alysa Barth South Market President

2022

Board & Supervisory

Board of Directors

Audit Committee Sandy Franke, Chair Scot Nething Rodney Buck

Owen Olson, Chair Sandy Franke, Vice Chair Douglas Kalianoff Bonnie Nelson, Secretary Colin Wegenast Mark Watne Sharman Zachrison

Board Report Welcome to the 84th Annual Meeting of First Community Credit Union. The volunteers and employees of FCCU have worked hard to make our Credit Union a special place for our members to bring their financial needs and for our employees to work.

We are happy to report another financially successful year. The year ended with assets of $1,195,740,21. Net income for 2022 was $10.4 million and at year end we had 45,415 Members.

Board Members, management, and our dedicated employees continually work on ways to improve service to our members and the communities we serve. We were busy again this year donating both our time and dollars to many community causes.

On January 1, 2022 FCCU merged with Elm River Credit Union giving us offices in Kindred and Page, ND and additional assets of $30 million and welcoming 1,000 members to the FCCU family. The total merger was completed on October 1.

In addition to our monthly meetings, the Board of Directors has several special meetings, an annual planning session, and several meetings at branch locations. Mark Watne and Owen Olson were re-elected to the Board at the March, 2021 Annual Meeting. Doug Kalianoff joined the Board as a new member. He was elected to the seat formerly held by Dayne Headland, who retired after serving FCCU for 30 years. Dayne was then elected to the Credit Union Hall of Fame. Congratulations to Dayne!

We continue to be very proud of our scholarship program. Last year we awarded $62,000 worth of scholarships which included 12 new multi-year scholarships as well as 20 single year scholarships, all in addition to previous year’s multi-year awards. We are happy to report that this is the highest number of scholarships we have ever awarded. Please encourage the young people you know to become FCCU Members and apply for scholarships when they are eligible.

Our new building/branch in Mandan opened on April 27 with the ribbon cutting on June 22. Both the Devils Lake and Bismarck North offices received extensive remodeling in 2022.

We are happy to report that property has been purchased for a future branch in Moorhead, MN. The Board of Directors would like to thank all of our dedicated employees for their excellent work and for making our members’ satisfaction their foremost goal; and a special thank you to our members for your continued support. We sincerely hope you will allow us to continue to serve your financial needs and that you will recommend us to your friends and family.

Life is better with community.

1-800-850-7676 myFCCU.com First Community Credit Union 310 10th Street SE Jamestown, ND 58401