family REUNION!
2016 Annual Report February 21, 2017
AUDITOR’S REPORT The Certified Public Accounting Firm of Wathen, Deshong & Junker, L.L.P., was retained by the credit union’s Board of Directors to perform a comprehensive audit of the institution’s financial statements. The firm issued an opinion of the financial condition of Gulf Credit Union as of June 30, 2016, and the related statements of income, members’ equity and cash flows for the twelve months periods then ended in conformity with accounting principles generally accepted in the United States of America. As a state-chartered financial institution, the credit union’s financial condition, asset quality, accounting practice and compliance with applicable laws and regulations are examined yearly by the State of Texas Credit Union Department. The credit union received a positive report.
VISION STATEMENT
Gulf Credit Union’s vision is to “create a relationship” with members. Our vision is met by matching our member’s need with the right product.
MISSION STATEMENT
From generation to generation, Gulf Credit Union is your partner in fulfilling your financial dreams.
BOARD OF DIRECTORS
EXECUTIVE STAFF
NAME Barry Gorman, Chairman Libby Arnold, Vice Chairman Karen Brown, Secretary Robert Adams, Treasurer Carl Duplantis Camille Jones Johnny Lewallen
Ron Burkhalter, President/CEO Linda Rials, Vice President of Finance Cindy Winfrey, Vice President of Operations Kristy Byers, Assistant Vice President of Lending Shirley Manuel, Assistant Vice President of Lending Operations Todd Gaudin, Vice President of Commercial Lending Greta Smith, Human Resource Director Sue Rogers, Marketing Director Stephine Adams, Risk Management Director Kathy Wolford, Executive Assistant John Pat White, II, CRPC, Vice President of Wealth Management, Gulf Investment Group
TERM ENDS 2017 2018 2017 2019 2017 2019 2019
ADVISORY BOARD MEMBER Harold Guilbeau
GROVES
(Main Office) 5140 West Parkway P.O. Box 848 Groves, TX 77619 409.963.1191 / 800.448.5328
2018
BEAUMONT
BRIDGE CIT Y
MID COUNT Y
2360 Dowlen Road Beaumont, TX 77706 409.860.3600
4721 Hwy. 87 South Orange, TX 77630 409.735.5156
2779 Aero Drive Port Arthur, TX 77640 409.729.8280
GULF CREDIT UNION IS FEDERALLY INSURED BY THE NATIONAL CREDIT UNION ADMINISTRATION.
REPORT TO MEMBERSHIP OF AMENDMENTS TO CREDIT UNION BYLAWS, SECTION 5.01 The Commissioner of the Credit Union Department approved changes to the bylaws of this credit union on June 27, 2016, on the reduction of directors from nine to eight and again on September 30, 2016, on the reduction of directors from eight to seven.
NOMINATING COMMITTEE
CHAIRMAN’S REPORT It gives me great pleasure to present to you the 78th Annual Report of Gulf Credit Union. I am pleased to serve as your chairman and I am very humbled by the level of trust you have placed in me and my fellow board members. In fact, I would like to take this opportunity to thank my fellow board members for their dedicated service, commitment, and passion, because they have contributed greatly to the success of our credit union. Gulf Credit Union performed well in 2016.
Bary Gorman Chairman
• As our CEO will note in his address, membership at GCU now stands at 26,955, representing 7% of Jefferson, Orange and Hardin counties; • Our 26,955 members have added more than $11,342,000 to their deposit accounts; • You, the members and owners of this institution, have borrowed more than $65,700,000, adding more than 6,015 new loans; Johnny Lewallen Chairman The Nominating Committee was appointed at the October 27, 2016, Board of Directors meeting. Those serving on this committee are: Johnny Lewallen (Chairman), Camille Jones and Robert Adams. At the 2017 Annual Meeting, three Board of Directors’ terms will be up for election. Due to the amendments to the bylaws in the reduction of the number of directors, the terms had to be adjusted to comply with section 5.01 (c), (approximately an equal number of regular terms must expire at each annual meeting.) The nominating committee respectfully nominates: Barry Gorman – 3 year term, Karen Brown – 3 year term and Carl Duplantis – 1 year term. Respectfully Submitted, Johnny Lewallen Chairman of the Nominating Committee
• Whether you are a consumer or a commercial member, we are so appreciative that you turned to your credit union for these financial needs. In 2016, you added more than $59,900,000 in consumer loans and $5,800,000 in commercial loans; • Even with a challenged economy, GCU committed to continue offering favorable interest rates, as a result, many of you were still motivated to buy new vehicles and other household and commercial products; • The median delinquency ratio in GCU is now 0.30%, which tells me you’re staying on top of your debt obligations, and that is a sure sign of an improving household confidence in seeking new debt. Your ongoing participation in GCU means that we will remain in a strong financial position to continue meeting your financial needs. Your strong participation reflects your recognition that GCU is a notfor-profit cooperative, and we are different than banks. Though we have to make a profit to keep the doors open, one main difference is we don’t have shareholders waiting with their hands out-there are no shareholders. When we can, we distribute those profits back to you. By exercising sound business and service strategies, we can help you navigate your life-cycle challenges, weather these uncertain economic periods, and recognize the true benefits of your membership. As we closed 2016 and look to 2017, our mission and vision of creating relationships and our core values we operate by will ensure that we are meeting your needs with the right product. Our credit union team will continue to strive to improve your experience. You can be proud and confident that as we continue to improve our financial viability, enhance products, invest in our community, and increase our knowledge of your needs, our mission and vision for you will be accomplished. Thank you so much for your membership, wishing you all the best for the coming year!
PRESIDENT’S REPORT On behalf of our board of directors, management and staff of Gulf Credit Union, I want to say what a pleasure it is to be here with all of you. Because of your trust and involvement, your credit union is able to thrive and provide so many important benefits, not only to our members but to our community.
Ron Burkhalter President
As a financial cooperative, our success is your success. When you participate in the credit union, you are contributing to its growth. And because of our cooperative structure, we are able to return our profits back to you, the owners and members, by offering competitive rates, new products, enhanced services, and additional points of service. It is my privilege to provide the state of our credit union for our 2017 annual meeting.
STATE OF OUR CREDIT UNION: FINANCIAL VIABILITY:
• We had loan growth of 15.05% or $18.6M; • We had deposit growth of 5.11% or $11.3M; • We had asset growth of 3.78% or $9.0M; • We contributed to the member capital for 2016 of over $170k. NEW PRODUCTS ON THE HORIZON FOR 2017:
• We will be offering remote deposit capture; • We will be introducing a new redesigned website; • We will be introducing a new member friendly search engine
to our website that will improve our member’s experience; • We will be replacing our island ATM at our Groves location during the first quarter of the year; • We will be installing a generator, in Groves, for disaster recovery purposes; • We will be continuing to be very competitive on loan rates for autos, personal loans and recreational products and commercial loans. COMMUNITY INVOLVEMENT:
• By hosting fundraisers, we were able to donate over $20k to Relay for Life and the
American Cancer Society; • We began a Gulf Helping Hands initiative that allows our employees to volunteer their time for those opportunities to make a difference in people’s lives; • We are very active in contributing back to our schools with financial literacy sessions and other events; • We had food and toy drives for Community Care Prayer Outreach; • We participated in the Angel Tree Program for Buckner Children & Family Services; • We support the Project Celebrations for all of our areas high schools; • We awarded $10K in high school scholarships in 2016.
As our membership grows, so do our assets, which indicates that you are taking full advantage of the products and services we have to offer. We are very cognizant of the member expectations of our staff as reflected in our constant training on our products and in improving the delivery experience for you. Everything we do whether it be our financial viability, new products, community involvement and staff training, is geared towards our desire to fulfill our mission and vision of creating relationships with our members by matching a need with a product. We know that when we fulfill our mission and vision, that each household will improve financially. As we embark on the year ahead, my commitment to you today is that Gulf Credit Union will continue to: • Grow responsibly, while listening and responding to your needs; • Continue to explore and deliver innovative product/service solutions; • Develop our staff and board so we can confidently serve you. Thank you so much for being an integral part of our credit union family. On behalf of the entire staff and board, we look forward to a happy and successful 2017 for us all.
FINANCIAL INFORMATION
DECEMBER 31, 2016
ASSETS
MEMBERS’ EQUITY
Net Loans to Members Available Liquidity (COH) Investments Property & Equipment — Net Reserve Interest Receivable & Other Assets
Total Assets
$142,802,158 $13,618,383 $67,298,974 $5,436,181 $2,295,264 $16,077,817
$247,528,776
LIABILITIES Members’ Deposits Accounts Payable/Other Members’ Equity
$233,111,120 $2,861,919 $11,555,737
Interest Income Fee Income
$6,997,055 $4,994,221
Total Operating Income
$11,991,276
Provision for Loan Loss Total Operating Income After Loan Loss Other Operating Gain Operating Expense Net Income Before Dividends Dividends To Members Increase In Equity
$395,960 $11,595,316 $37,114 $10,650,443 $981,987 $810,798 $171,189
Total Liabilities & Members’ Equity $247,528,776
STATISTICAL INFORMATION FOR YEAR 2016 NUMBER
DELINQUENT LOANS
AMOUNT
41 2 2 45 8,091 1,275 9,411
2 to 6 months 6 to 12 months 12 months and over SUBTOTAL LESS THAN 2 MONTHS LOAN PARTICIPATION TOTAL LOANS
$399,352 $10,122 $23,708 $433,182 $128,696,479 $13,672,497 $142,802,158
Loans Charged Off Year-to-Date Recoveries on Loans Charged Off Delinquency Percentage Estimated Solvency Ratio
$506,585 $82,796 0.30% 105%
26,955 Members at End of Period 6,015 Loans Year-to-Date $66,606,096
FINANCIAL CHARTS & GRAPHS
MEMBERSHIP ANALYSIS
ASSETS
28,500 28,000
28,710
29,000
28,955
27,000 26,500
2011
2012
2013
2014
2015
2016
26,000 25,500
2011 2012 2013 2014 2015 2016
LOAN ANALYSIS Legend $160,000,000
$127,000,000
2011 $124,000,000
$140,000,000
2012 $108,000,000
2013
$120,000,000
$115,000,000
2014
$100,000,000
$124,000,000
2015 $80,000,000
$142,000,000
2011
2012
2013
2014
2015
2016
26,955
27,500 27,179
$247,528,776
$237,526,364
$230,576,307
$218,376,020
$50,000,000
$218,017,053
$100,000,000
$219,347,946
$150,000,000
29,500
29,987
30,000 $200,000,000
30,217
30,500
$250,000,000
2016