M O C
ING FU LL C IR
CLE 2 017
A
N
N
UA
L REPORT Federally insured by NCUA.
YOU KEEP OUR STORY MOVING FORWARD.
OUR STORY BEGAN 85 YEARS AGO.
IT’S THE STORY OF EVERYDAY PEOPLE WORKING TOGETHER TO BUILD A STRONGER COMMUNITY.
PEOPLE SUPPORTING
COMMUNITY
TABLE OF CONTENTS 3
Board of Directors and Management Team
5
Chairman’s Message
7
President & CEO Report
9
Year-end 2017
13
Audit Committee Report
14
Statements of Financial Condition
15
Statements of Income
17
Community Impact Statements
19
Services
21
Locations
BOARD OF DIRECTORS Armando Jimarez
Guadalupe Giner SECRETA RY/ TREASU RE R
Grace Vaughn
Javier Rangel
Gregory J. Watters C H AI R M AN
John Runkles
Teresa Quezada
Michelle Padilla
Ricardo Soto
Jose Quiñonez VI C E-C H A I RM A N
BOARD OF DIRECTORS Gregory J. Watters Chairman of the Board Jose QuiĂąonez Vice-Chairman Guadalupe Giner Secretary/Treasurer
EXPIRATION OF TERMS April 2018
April 2018
April 2019
Grace Vaughn Teresa Quezada Ricardo Soto John Runkles
EXPIRATION OF TERMS April 2020 April 2019 April 2020 April 2020
Advisory Directors Armando Jimarez Javier Rangel Michelle Padilla
September 2018 September 2018 September 2018
MANAGEMENT TEAM Crystal Long President & CEO
Lettie Ramos Vice President, Mortgage
Ceci Davila Sr. Vice President, Chief Operations Officer
Mike Sarabia Vice President, Internal Audit
Hazel Kennedy Sr. Vice President, Chief Lending Officer*
David Solis Sr. Vice President, Chief Financial Officer
Teresa Montoya Sr. Vice President, Chief Marketing Officer
Chris Tompkins Sr. Vice President, Chief Commercial Services Officer
Fernando Ortega Sr. Vice President, Chief Information Officer
Joe Underwood Vice President, Human Resources
Darlene Palmore Sr. Vice President, Chief Compliance Officer
Daniel Vasquez Vice President, Career & Talent Development
*Indicates a change in position title as of December 31, 2017.
PA G E 3
PEOPLE
EMPOWERING COMMUNITY
CHAIRMAN’S MESSAGE This year — your credit union’s 85th year — was packed with growth and achievement in service to you, our member-owners. The GECU story is a story of hands-on service to our members and our community. All of our services are built on your credit union’s strong and stable financial foundation. In 2017, your credit union paid you $17,510,446 in interest and dividends, an increase of $422,826 over last year. Our deposits increased by $79,308,819, and our loan portfolio increased by $143,184,459. Your credit union reached a net income of $19,484,721, increasing GECU’s net worth to 9.60%. Take pride in knowing that your credit union is strong and stable, and we’re using that strength — our strength — to elevate our community. Since our 11 founders began our story 85 years ago, we’ve not only held on to their vision of service, we’ve expanded it to include more people than ever before. Through everything from branches and tellers to GECU Community Development and our educational outreach, we are here to serve you and our community at every stage of life. Every day — one member at a time — we’re telling our story about the good we can accomplish by working together. I am very proud to tell you some of the highlights of this story — a big-picture look at the results of your credit union’s tireless work to elevate our community. In 2017, our Volunteer Income Tax Assistance volunteers, along with the Coalition for Family Economic Progress and our community partners, helped 8,026 local families receive more than $14.3 million in tax refunds and $6.3 million in Earned Income Tax Credits — free of charge. In 2017, we launched the Welcome Home El Paso program, which provides hardworking local families with
down-payment assistance on the purchase of a home, with the El Paso Housing Finance Corporation. This is in addition to our financial education and homeownership seminars that also help local families qualify for down-payment assistance. Together, these two programs have helped 74 local families purchase a home of their own, which has helped build the assets that create financial stability in our community. When we share these figures, think about the lives that have been touched. These are hardworking families that now have a home of their own where they used to rent, a nest egg where they used to live paycheck to paycheck, and the ability to build wealth that spans generations. This is the vision of our founders, an idea brought to life through hope and hard work. None of this would be possible without you, our member-owners. When you place your trust in GECU, we work to earn that trust each and every day through service. Being a member of GECU is more than a choice about where you keep your money, it’s adding your voice to the story of a hopeful community that’s working toward a more-prosperous future. Thank you for being a part of our story, and for letting us be a part of yours. Together, we’re doing great things, and there are many more great things yet to come.
Gregory J. Watters Chairman of the Board Change to GECU Bylaws — 2017 The amendments to the GECU Bylaws were approved on February 13, 2017. The GECU Bylaws were amended to allow the president to preside over annual and special meetings in the absence of the chairman and indicate that other officers designated by the board of directors may preside in the absence of the president and chairman. Amendments to the Bylaws were also included to clarify that the vice-chairman shall perform duties of the chairman, unless otherwise designated in the bylaws.
PA G E 5
PEOPLE FOR PEOPLE
COMMUNITY HELPING PEOPLE
PRESIDENT & CEO REPORT For 85 years, we have celebrated the values of the credit union movement — the idea that everyday people working together can make a difference. Our story is a story that is told in many voices. It is a story about hope and prosperity. Your voice guides us as we build branches, add services and serve our community. Together, we are putting our people helping people philosophy into action. Thank you for placing your trust in us and for supporting the credit union movement with your voice. It’s an honor to serve you and our community, to listen to you, and to build our credit union around your needs. I’m excited to tell you that in our 85th year, your credit union is strong, stable and growing. Our membership has grown to 370,901 members and we’ve added two GECU Neighborhood BranchSM locations, including the Piedras and Yandell location, to serve you. Your credit union has reached 25,199 community members with free financial education seminars, including more than 100 events for students in local schools. In addition to our support of the Sageland Elementary MicroSociety, our UTEP Pillar Partnership, and the GECU Foundation Scholarship that helps local students attend UTEP and EPCC, we’ve started serving local students and faculties directly in their own schools. Starting with the successful in-school location at Del Valle High School, we have also opened other locations in Coronado and Pebble Hills high schools, and a location in the EPCC Valle Verde campus. All of the in-school branches provide job training and real-world experience to the students that they employ. These locations are also hubs of financial education for both students and faculty, where previously there was a need for personalized financial advice. Your credit union is growing because it is a full-circle institution, reaching out with education and service to meet your needs at every stage of life.
We write our story through service. When you place your trust in GECU, we commit our efforts to helping you, your family and your neighborhood thrive. Just as we work together through our credit union, GECU works with our community partners to make an impact. We are proud to support organizations that share our same values and make a difference across the Borderland. Together, we’re building a more-prosperous community for everyone. You — the member-owner — keep our story moving forward. Since our founding, we’ve kept our people helping people philosophy at the forefront of our mission to serve you. We’re continuing the story that our founders started 85 years ago — one person and one day at a time — in which financial independence is achievable for everyone. More than ever, our movement needs your voice to speak out in favor of common-sense regulations that help your credit union serve you and our community. Thank you for trusting us with all your hopes and dreams. Our strength as a credit union comes from our members. Whether you are a new member or you’ve made GECU a family tradition that spans generations, thank you for letting us be a part of your journey. You’re the reason why we’re celebrating this milestone anniversary. The GECU story is your story because this is your credit union. Together, we’re building a brighter future for our community.
Crystal Long GECU President & CEO
PA G E 7
PEOPLE FOR
COMMUNITY
BELIEVING
PEOPLE IN EACH OTHER
YEAR-END 2017 LOANS FUNDED 14% 16%
Indirect Auto Loans $457,962,956
19% 17% 38%
2017
Direct Auto Loans $166,268,588 Credit Cards — Advances $233,810,387 Installment $134,320,888
11%
Lines of Credit $11,780,907 Real Estate Loans (First & Second Lien) $141,969,176
39%
12%
16%
4% 11%
Home Equity Real Estate Loans $49,933,617
1%
Member Business Loans $15,844,223 TOTAL LOANS FUNDED: $1,211,890,742
1%
RETURN TO MEMBERS
53.6%
Interest — CD $9,388,987 Interest — IRA $3,994,791
22.8%
Interest — MMA $2,201,456 Dividends — Shares $1,633,205
12.6%
Interest — Checking $292,007 TOTAL RETURN TO MEMBERS: $17,510,446
PA G E 9
9.3%
1.7%
INSPIRING CHANGE COMMUNITY PEOPLE PEOPLE FOR
YEAR-END 2017 (CONT.)
TOTAL LOAN PORTFOLIO
12%
Vehicle Loans $1,408,908,061
11% 60%
2017
Credit Card Loans $282,871,015 Home Equity Loans $261,338,865
9%
Real Estate Loans (First & Second Lien) $217,541,888 Unsecured Loans $138,582,883
6%
Commercial Loans $30,090,254 Fully Secured Loans $23,505,511 TOTAL LOAN PORTFOLIO: $2,362,838,477
1% 1%
DISTRIBUTION OF EARNINGS
53.1%
Operating Expenses $95,528,370 Employee Compensation & Benefits $46,928,234
26.2% 10.9%
Reserves $19,484,721 Return to Members $17,510,446 TOTAL DISTRIBUTION OF EARNINGS: $179,451,771
PA G E 1 1
9.8%
PEOPLE
WORKING FOR YOU
AUDIT COMMITTEE REPORT Abraham Valenzuela
The Audit Committee is responsible for ensuring the appropriate oversight of GECU’s required financial-reporting objectives and for ensuring that established practices and procedures are sufficient to safeguard members’ assets in accordance with the law. The Audit Committee is assisted by GECU’s Internal Audit Department, which conducts comprehensive internal audits throughout the year, ensuring that 1) accounting records and reports are prepared promptly and accurately reflect operations and results; 2) established internal controls are effectively maintained and adequately protect the credit union, its assets, members, management and employees; and 3) each area of the credit union is carrying out the plans, policies and procedures for which it is responsible as directed by the Board of Directors. The Audit Committee also oversees the annual comprehensive audit conducted by the independent certified public accounting firm of Doeren Mayhew. Their examination was conducted in accordance with generally accepted auditing standards as issued by the American Institute of Certified Public Accountants. As a result of the internal and independent audits, the Audit Committee believes the financial statements included in the 2017 Annual Report fairly present the financial condition of GECU for the year ending December 31, 2017. We appreciate GECU’s Board of Directors, management and staff for their cooperation.
Ricardo Soto — Chairman Guadalupe Giner Armando Jimarez Abraham Valenzuela
A full copy of GECU’s 2017 financial statements may be obtained by contacting the office of Crystal Long, GECU President and CEO.
PA G E 1 3
Armando Jimarez
Guadalupe Giner
Ricardo Soto C H A I RM A N
STATEMENTS OF FINANCIAL CONDITION
DECEMBER 31, 2017 & 2016
ASSETS
2017 $
Cash and cash equivalents Investment Securities: Held-to-maturity Available-for-sale FHLB stock Loans held-for-sale Loans to members, net of allowance for loan losses Accrued interest receivable Property and equipment NCUSIF deposit Life insurance contracts Other assets
87,938,561
2016 $
61,142,545
3,000,000 70,216,760 7,319,000 10,399,074 2,337,212,568 7,104,826 63,851,226 20,501,624 28,559,654 14,754,715
3,000,000 81,628,914 4,435,400 5,419,574 2,194,028,109 6,755,048 61,571,299 18,929,916 27,365,547 12,714,390
$ 2,650,858,008
$ 2,476,990,742
Liabilities: Members’ shares and savings accounts Borrowed funds Accrued expenses and other liabilities
$ 2,219,110,041 154,193,454 23,223,972
$ 2,139,801,222 85,676,605 17,195,690
Total liabilities
$ 2,396,527,467
$ 2,242,673,517
16,834,261 237,575,450 (79,170)
16,834,261 218,131,115 (648,151)
Total assets LIABILITIES AND MEMBERS’ EQUITY
COMMITMENTS AND CONTINGENT LIABILITIES Members’ equity: Regular reserves Undivided earnings Accumulated other comprehensive income (loss) Total members’ equity
$
Total liabilities and members’ equity
$ 2,650,858,008
Federally insured by NCUA.
PA G E 1 4
254,330,541
$
234,317,225
$ 2,476,990,742
STATEMENTS OF INCOME
DECEMBER 31, 2017 & 2016 2017
2016
$ 121,668,798 2,757,633
$ 108,645,334 1,902,484
124,426,431
110,547,818
Interest expense: Members’ shares and savings accounts Interest on borrowed funds
17,510,446 1,480,859
17,087,620 359,681
Total interest expense
18,991,305
17,447,301
105,435,126
93,100,517
Provision for loan losses
29,432,237
24,352,031
Net interest income after provision for loan losses
76,002,889
68,748,486
Non-interest income: Gains on sale of loans Other income Fees and charges and other operating income
3,453,842 1,596,288 49,975,210
4,508,977 1,326,808 44,773,288
Total non-interest income
55,025,340
50,609,073
Non-interest expenses: Compensation and benefits Occupancy Office operations Other operating expenses
46,928,234 7,460,701 46,790,734 10,363,839
45,751,692 6,989,617 41,820,778 7,240,981
Total non-interest expenses
111,543,508
101,803,068
$ 19,484,721
$ 17,554,491
Interest income: Loans receivable Investment securities Total interest income
Net interest income
Net income
PA G E 1 5
PEOPLE
TRANSFORMING LIVES
COMMUNITY IMPACT
STATEMENTS
2017
370,901 members strong A S O F D E C E M B E R 3 1 , 2 0 17 .
Financial Education and Homeownership
FINANCIAL EDUCATION
SEMINAR
One-on-one Counseling
1,481
Financial Education
ATTENDANCE
708
Community Presentations
4,579
TOTAL ATTENDEES
18,431 25,199
VITA Tax Assistance
8,026
Tax returns filed.
GECU
Income $6.3 million inTaxEarned Credits received. $14.3 million in tax refunds.
FREE OF CHARGE
DOWN-PAYMENT
Employee Jean Day Contributions
ASSISTANCE
74
$22,368 DONATED
families received more than
$450,000
in down-payment assistance to purchase a home of their own.
TO LOCAL NON-PROFITS. PA G E 1 7
ADVOCATING
PEOPLE FOR OTHERS
SERVICES SHARE & DEPOSITS Share (savings) Accounts Christmas Club Accounts No Excuse Savers Club Accounts Certificates of Deposit Bump-up Certificates of Deposit Money Market Accounts Personal Checking Accounts Business Checking Accounts Individual Retirement Accounts (IRAs) No Excuse IRA Certificates of Deposit Second Chance Checking Youth Accounts LOANS Personal Loans New and Used Auto Loans Home Mortgage Loans Home Equity Loans Home Improvement Loans GECU Empowerment Mastercard® Credit Card GECU Rewards Mastercard® Credit Card Lines of Credit GECU Fast Cash™ Business Loans SPECIAL SERVICES ATMs and Real-time Deposit-taking ATMs Drive-up Personal Tellers Automatic Transfers (between GECU accounts) Business Cash-management System Chip-enabled Credit and Debit Cards* Community Boardrooms
Federally insured by NCUA.
*Services added in 2017.
Direct Deposits Domestic Wire Transfers GECU Mascot Dru Blue Electronic Receipts GECU Call Center GECU Loan Center GECU Online Banking — gecu.com Bill Pay Account balances and transfers Online loan applications Self-service pay channels FinanceWorks™ eStatements eSignature service GECU Mobile Banking Account balances and transfers Bill Pay Real-time mobile deposits Mobile loan applications Mobile wallet* ATM locator Mobile registration Mobile touch ID Text messaging and account alerts GECU Knowledge Base, Email and GECU Chat Night and Lobby Depositories Online Education Videos Overdraft Privilege Safe Deposit Boxes SmartLine (24-hour account information) TalkBox Welcome Home El Paso Down Payment Assistance*
PA G E 1 9
PEOPLE
CULTIVATING KNOWLEDGE
LOCATIONS* Airway & Edgemere 1245 Airway Boulevard (Drive-thru facility) Alameda & Ysleta 8936 Alameda Avenue Artcraft & Upper Valley 6101 Upper Valley Road Campbell & Mills 218 North Campbell Street, Suite 100 Eastlake & Darrington 13750 Eastlake Boulevard Edgemere & Rich Beem 12801 Edgemere Boulevard, Building A El Paso Community College Valle Verde Campus 919 Hunter Drive GECU Community Development 6801 Viscount Boulevard, Suite A GECU Investment Services and MEMBERS Trust** 7227 Viscount Boulevard Helen of Troy & Resler 7410 Helen of Troy Drive Lee Trevino & Vista Del Sol 1545 North Lee Trevino Drive Mesa & Doniphan 7955 North Mesa Street, Suite B
Mesa & Mesa Hills 5710 North Mesa Street
Yarbrough & North Loop 429 Yarbrough Drive
Montwood & Desert Sun 12400 Montwood Drive
MAILING ADDRESS PO Box 20998 El Paso, Texas 79998-0998
North Loop & Horizon 10860 North Loop Drive Operations Center 1225 Airway Boulevard Oregon & University 2208 North Oregon Street Piedras & Yandell 716 North Piedras Street Rojas & Zaragoza 11987 Rojas Drive Sean Haggerty & Marcus Uribe 11400 Sean Haggerty Drive, Building D, Suite 401 Transmountain & Dyer 5625 Transmountain Road Trawood & George Dieter 3037 Trawood Drive (Drive-thru facility) Viscount & Airway 7227 Viscount Boulevard Vista Del Sol & Yarbrough 10425 Vista Del Sol Drive
PA G E 2 1
TELEPHONE NUMBERS All Offices 778.9221 1.800.772.4328 SmartLine 778.0009 1.800.772.0009 TDD: 774.6080 GECU Call Center and Loan Center 778.9221 1.800.772.4328 WEB ADDRESS gecu.com *Services and locations as of December 31, 2017. For an up-to-date listing of locations, please visit gecu.com. **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. CBSI is a registered broker/dealer in all 50 states of the United States of America. Nondeposit investment products available through MEMBERS Trust Company are not deposits of, or guaranteed by, the trust company, a credit union or credit union affiliate; are not federally insured or guaranteed by the NCUA, FDIC or any other governmental agency; and are subject to investment risks, including possible loss of the principal amount invested. MEMBERS Trust Company is a federal thrift regulated by the Office of the Comptroller of the Currency. For legal advice, please consult your attorney and/or accountant.