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2016 A N N UA L R E P OR T

H A RVA R D U NI V ERSI T Y EMPL OY EE S CR EDI T U NION


Our Vision


Harvard University Employees Credit Union aspires to be a trusted partner in our members’ financial lives. We add value to membership by offering the best possible price, the highest quality personal service, and sincere, sound advice. We seek to be known as a community leader and to deepen our long standing commitment to housing issues, green initiatives, financial literacy and access to credit for low and moderate income borrowers. We work toward transformational growth and change without relinquishing the core values we hold today. We are a not-for-profit cooperative which exists solely for the best interest of our members. We value integrity and responsibility in all of our actions. We strive to enhance our communities and create solutions for social, environmental and economic issues.


Highlights

A RECORD-SETTING YEAR

1,446

47,207

3%

NEW MEMBERS NET 2016

TOTAL MEMBERS YEAR END 2016

MEMBERSHIP GROWTH

Surpassed $572 million in assets 1940

10

1950

1960

1970

1990

2000

2010

2016

NEWLY CREATED POSITIONS

1,556,100 2

1980

HUECU ANNUAL REPORT

14

PROMOTIONS

CUMULATIVE HOURS OF WORK EXPERIENCE


3%

1%

GENERATION Z (1996 – 2 010)

28%

MILLENNIALS (1980 – 1 995)

THE GREATEST GENERATION (1910 – 1 924)

8%

HUECU members by

THE SILENT GENERATION (1925 – 1 945)

GENER ATION

31%

29%

GENERATION X (1965 – 1 979)

BABY BOOM GENERATION (1946 – 1 964)

WHAT’S NEW FA MILY ST U DEN T LOA N

EN H A NCED EM V CHIP C A R D SEC U R I T Y

242,855 Branch Transactions

SPR ING HOME BU Y ING FORUM

ON E TOUCH MOBIL E BA N K ING

N E W FINA NCI A L W EL L N ESS PA RT N ER - GR EEN PAT H

903 community members attended an HUECU Financial Wellness Presentation

2016

3


Report from the Chairman & CEO George White Chairman of the Board

Eugene J. Foley President & CEO

In 2016, Harvard University Employees Credit Union reached $572 million in total assets, a pinnacle for HUECU, and our mortgage servicing portfolio hit an all-time high — $507 million. These unprecedented achievements, along with vigorous growth in membership and products, are a testament to the top quality benefits HUECU continues to provide to the communities we serve. A RECORD -SET T ING Y E A R  

S TAT E OF T H E I N DU S T RY  Across the nation,

A C H I E V I NG N E W M I L E S T ON E S  In 2016

the credit union industry built on two years of strong

we saw record-breaking performance across the board.

performance to reach new milestones in 2016.

Overall assets grew by a remarkable 10.9% to reach a

Overall assets experienced a robust growth of 7.3%, with total assets of U.S. credit unions at more than $1.31

total of $572 million by the end of the year, with solid earnings performance.

trillion by the end of 2016. Loan balances rose by 10.9%,

Meanwhile, our mortgage servicing portfolio hit

marking three consecutive years of double-digit

an all-time high of $507 million. More than 650

growth — something we haven’t seen since 1988, nearly

community members started their home buying journey

30 years ago. Credit union membership in the U.S.

by attending one of our workshops. First mortgage

also saw robust growth, with 4.6 million new members

originations for the year climbed to $181.6 million, a

joining a credit union in 2016.

growth of 50% year-on-year. Purchases rose by 61% and

The total number of U.S. credit unions continued to decrease in 2016, albeit not as quickly as the year before. Falling by 3.9%, the ongoing consolidation of the industry indicates that smaller institutions continue

refinances were up 34%. These strong performances, along with a 3% membership growth, demonstrate that HUECU continues to grow as a trustworthy provider of financial services.

to face competitive pressures — particularly in light of

E VOLV I NG A N D E X PA N DI NG OU R

members’ rising demand for enhanced security, new

SE RV IC E  In 2016 we further developed several

banking benefits, and digital products and services.

member benefits to help our members meet their financial goals.

4

HUECU ANNUAL REPORT


In an effort to better protect our members’ from fraud, all HUECU credit and debit cards are now equipped with an EMV Chip. EMV Chip technology adds layers of security against fraud and is difficult to duplicate, making the current payment system even more secure. We’ve also introduced new mobile notifications so that HUECU members can closely monitor their accounts and act quickly against fraudulent activity.

community C A R D S F OR K I D S For the second year in a row, HUECU gathered the community at CNY and LMA branches to craft cards and create messages of inspiration for hospitalized children at Dana-Farber Cancer Institute, Boston Shriner’s Hospital for Children, and Spaulding Rehabilitation Hospital.

Along with giving our members peace of mind, we are capitalizing on proven technology innovations to make our services even more efficient and easy to use. HUECU Mobile Banking helps members access their accounts, pay bills, make mobile deposits and more — anytime, anywhere, on any mobile device. This year we also introduced Touch ID®, enabling secure account access with just one touch.

B O S T ON T O Y S F OR T O T S DR I V E HUECU partnered with the U.S. Marine Corps Reserve to collect toys to distribute to less fortunate children during the holidays. HUECU joins fellow credit unions in the Boston area as one of the largest contributors to the Toys for Tots organization.

To further support the financial and life ambitions of our members,

T H I N K P I N K C A M PA IG N

we’ve introduced the HUECU Family Student Loan. With no

In support of National Breast Cancer Awareness Month, HUECU staff and members joined together in October to raise funds for research conducted at Dana-Farber, MGH, and Mount Auburn Hospitals.

origination fees and a low interest rate, this loan helps parents or family members cover education-related expenses, so that students can focus on their studies. We are also supporting members’ financial wellbeing through

C H A L K T H E WA L K

counseling and education initiatives. HUECU is now partnering

Once again, HUECU volunteered their artistic abilities at Harvard Square’s annual MayFair fundraiser. This year over $30,000 was raised for local charities and scholarships in support of children’s welfare, clean water projects, global healthcare and more.

with GreenPath financial wellness, which provides expert financial guidance and one-on-one financial counseling in a range of areas, including home buying, student loans, mortgages and more. In HUECU’s own financial literacy workshops, we are making good on our promise to be a trusted partner in the community for financial services and advice. In spring 2016 we hosted our first ever Home Buying Forum, attended by over 200 people. The forum featured experts from HUECU, Harvard University Housing and Coldwell Banker who shared insights on the state of the real estate market in the Boston area, the home buying process, credit

CREDIT UNION COMMUNITY HOPE BOOK DRIVE HUECU worked with the Cooperative Credit Union Association’s charitable partner, the Massachusetts Coalition for the Homeless, to collect and distribute children’s books to non-profit agencies in cities and communities across Massachusetts. HUECU collected 190 books this year!

strategies and more. S A LU T I NG T H E H U E C U T E A M  Exceptional service, delivered with quality and integrity, is a long tradition for HUECU — one that would be impossible without the talent and dedication of our staff. HUECU employees now represent a cumulative 855 years of experience at HUECU, or more than 1.5

E A R T H DAY, C L E A N T H E S QUA R E Changing the world starts by changing our own little corner of it. HUECU volunteered with other members of the Harvard Square Business Association at their Earth Day Clean Up initiative. Our team assisted in sweeping over 75lbs of trash while raising Earth Day awareness.

million hours spent bringing our mission to life. As we work toward yet another year of aspirational growth, HUECU will continue to enhance our members’ lives and financial wellbeing through sound business practices, innovative development strategies, our hardworking staff and Board, and of course, the loyalty of our over 47,000 members — for whom we will continue to provide sincere, best-in-class service.

B O S T ON M A R AT HON TEAMS For the 120th annual Boston Marathon, HUECU was honored to support the initiatives of several local marathon teams from the communities we serve. Funds were raised in support of teams from Harvard College, MGH and DanaFarber.

2016

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By the Numbers HOME LOA NS

HEL OC B A L A NCE S

201 4

$1 5. 1

201 5

$17. 3

2016

$20. 3

MILLIONS

182

MORT G AGE S T O F IR S T-T I M E HOM E BU Y E R S

656

ST U DEN T LOA NS

ST U DEN T L OA N B A L A NCE S

201 4

$74.7

201 5

$ 8 4.4

2016

$95.9

MILLIONS

$ 1.9

MIL L ION

S T U DE N T L OA NS R E F INA NC E D

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HUECU ANNUAL REPORT

OF OU R M E M BE R S S TA RT E D T H E IR HOM E BU Y ING JOU R N E Y WITH US


2016 CHECK ING

CHECK ING ACC OU N T B A L A NCE S

201 4

$78. 1

201 5

$90.0

2016

$96. 1

MILLIONS

4,289 MOBIL E C H E C K DE P O SI T U SE R S

CREDI T C A RDS

CR EDI T C A R D SPEND

201 4

$1 1 4. 1

201 5

$1 22 .4

2016

$1 26.0

MILLIONS

107,955,122 R E WA R D S P OIN T S E A R N E D

2016

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Report from the Treasurer

John T. Litchen Treasurer

The Credit Union continued to perform strongly, posting another year of solid earnings. Assets increased by 11%, with a year-end total of $572 million.

Positive growth was realized in all areas of the Credit Union; membership, loans, and deposits. Loan quality remained high within all loan product segments. As reflected in the unaudited financial statements, the Credit Union continues to be a well-capitalized, financially strong institution where members can feel confident saving and borrowing. The Board, management and staff are to be commended for their contributions to our success.

DEPOSITS OVER 5 YEARS

LOANS OVER 5 YEARS

IN MILLIONS

IN MILLIONS

$500

$500

$400

$400

$300

$300

$200

$200

$100

$100

2012

2013

2014

2015

2016

2012

2013

2014

2015

2016

4%

22%

CHECKING

6%

4%

AUTO LOANS

7%

SECOND MORTGAGES

IRAs

CREDIT CARDS

3% OTHER

11%

CERTIFICATES

8

26%

DEPOSIT DISTRIBU TION

MONEY MARKETS

LOA N DISTRIBU TION

19%

STUDENT LOANS

37%

61%

SHARES

FIRST MORTGAGES

HUECU ANNUAL REPORT


Statement of Condition  

SEL EC T ED DATA IN M IL L IONS

ASSETS

2016

2015

Cash & Cash Equivalents

35.9

36.4

Investments

45.1

57.4

476.8

408.4

Property & Equipment, net

2.3

2.5

National Credit Union Share Insurance Fund Deposit

4.4

4.2

Other Assets

7.8

7.0

Total Assets

572.3

515.9

  Members’ Shares

493.2

459.0

  Borrowed Funds

18.0

5.0

  Accrued Expenses & Other Liabilities

10.7

7.1

521.9

471.1

  Retained Earnings, Substantially Restricted

50.4

44.9

  Accumulated Other Comprehensive Income

0.0

-0.1

50.4

44.8

572.3

515.9

Loans to Members, net

LIABILITIES & MEMBERS’ EQUIT Y Liabilities

Total Liabilities Members’ Equity

Total Members’ Equity Total Liabilities & Members’ Equity

Statement of Income  

SEL EC T ED DATA IN M IL L IONS

INTEREST INCOME

2016

2015

Interest Income from Loans & Investments

21.7

19.6

Interest Expense for Members’ Accounts & Borrowed Funds

-1.2

-1.1

Loan Loss Provision

-1.2

-0.9

Net Interest Income After Provision for Loan Losses

19.3

17.6

5.4

4.5

-19.3

-17.8

5.4

4.3

Other Income Operating Expense Net Income

2016

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Report from the Audit Committee

Dee Dee Chen Committee Chair

The Audit Committee is composed of five Directors dedicated to ensuring that the Credit Union’s actions are held to the highest standards of integrity and value.

Throughout 2016, the Committee met regularly to

Reimbursements to Board Directors, including other

review the monthly financial statements and audit

general expenses associated with Board meetings,

reports, as well as to discuss other operational topics

conferences, trainings, committee meetings and

of interest. We are assisted in our efforts by external

planning sessions within 2016 totaled $40,929.

firms that provide audit support of the Credit Union’s

Reimbursable expenses of $78 were attributed to the

finances and internal controls. Wolf & Company, P.C.,

Credit Committee, and no reimbursable expenses to

audits our financial statements.

members of the Audit Committee occurred. All Board

Internal audits continued to receive significant attention during 2016. Healy & Healy, our partnered firm, performed internal audits throughout the year to test Credit Union procedures and controls in

Director expenses and reimbursements were made in compliance with the regulations of the National Credit Union Administration and the Massachusetts Division of Banks.

branch operations, wire transfers, deposit operations,

The Committee wishes to thank the Credit Union

mortgage and student loans, among other areas. The

management for their cooperation, support and

Committee reviewed their findings and management’s

assistance throughout the year.

responses, and continues to actively work with management on suggested areas to strengthen our processes and mitigate risk.

Committee Members

Guillermo Banchiere

Karrie Ford

James Barrows

George White

Dee Dee Chen

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HUECU ANNUAL REPORT


Officers

Eugene J. Foley President & CEO

Craig Leonard Executive VP, CFO

Peter Buchanan SVP, Real Estate Lending

John Degnan SVP, Operations

Tom Montilli SVP, Chief Marketing & Retail Officer

Tom Murphy SVP, Consumer Lending

Board of Directors

Guillermo Banchiere Since 2007

Jim Barrows Since 2015

Dennis Campbell Since 2013

Dee Dee Chen Since 2015

Ann Dexter Since 2015

April D. Edrington Since 2016

Karrie Ford Since 2014

John Lichten Treasurer Since 1992

Thomas Lucey Since 2006

Jason Luke Since 2014

Jeremiah Murphy Vice Chair Since 2003

Amartya K. Ray Since 2016

Mary Straub Clerk Since 2004

George White Chairman Since 1999

Shahar Ziv Since 2016

2016

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HUECU ANNUAL REPORT


Thank You We would like to thank all of our partner organizations for their continued support and participation in the Credit Union.

Our Partners The Harvard University Employees Credit Union is proud to offer our services to the employees, students and alumni of Harvard University, Harvard teaching hospitals and affiliated organizations.

American Repertory Theater

Harvard Management Company

McLean Hospital

Beth Israel Deaconess Medical Center

Harvard/M.I.T. Cooperative Society

Medical Academic and Scientific Community Organization

Boston Children’s Hospital

Harvard Pilgrim Health Care

Boston Shriners Hospital

Harvard–Smithsonian Center for Astrophysics

MGH Institute of Health Professions

Brigham and Women’s Hospital Cambridge Hospital/ Cambridge Health Alliance The Center for Blood Research Dana Farber Cancer Institute Dumbarton Oaks Research Library Episcopal Divinity School Harvard Business School Publishing

Mount Auburn Hospital

Harvard University

Partners HealthCare System

Harvard Vanguard Medical Associates

Radcliffe Institute for Advanced Study

Joslin Diabetes Center

The Schepens Eye Research Institute

Judge Baker Children’s Center Lesley University Massachusetts Eye and Ear Infirmary Massachusetts General Hospital

Spaulding Rehabilitation Hospital Veterans Administration Boston Healthcare System WGBH Boston

Massachusetts Mental Health Center

2016

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617.495.4460 huecu@harvard.edu @myHUECU facebook.com/myHUECU

H U EC U.ORG

OU R M I S S ION

Enhance our members’ lives by providing trustworthy products that are easy to understand, easy to use and best suited to meet their financial needs.

Your savings are federally insured to at least $250,000 and backed by the full faith and credit of the United States Government.

2016 HUECU Annual Report  

Harvard University Employees Credit Union is proud to present our 2016 Annual Report.

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