2017 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
1,692
48,899
4%
NEW MEMBERS NET 2017
TOTAL MEMBERS YEAR END 2017
MEMBERSHIP GROWTH
Surpassed $635 million in assets 1940
18
1950
1960
1970
1980
1990
2000
2010
2017
NEWLY CREATED POSITIONS
1,565,200 HUECU ANNUAL REPORT
10
PROMOTIONS
CUMULATIVE HOURS OF WORK EXPERIENCE
4%
GENERATION Z (1996 – 2 010)
33%
MILLENNIALS (1980 – 1 995)
7%
HUECU members by
THE SILENT GENERATION (1925 – 1 945)
GENER ATION
28%
28%
GENERATION X (1965 – 1 979)
BABY BOOM GENERATION (1946 – 1 964)
STUDENT LOA NS
FINA NCI A L W ELLNESS
COMMUNIT Y IN V ESTMENT
SERV ICED LOA NS TO 27 DIFFER EN T SCHOOLS IN 10 STAT ES.
1 47 FINA NCI A L W EL L N ESS PR ESEN TAT IONS GI V EN. 2,852 COM MU N I T Y MEMBERS AT T EN DED.
5 SCHOL A RSHIPS AWA R DED TO LOC A L HIGH SCHOOL SEN IORS.
249,791
BR A NCH T R A NS AC T IONS
80,578
CON V ERS AT IONS W I T H T HE CON TAC T CEN T ER
2017
Report from the Chairman & CEO George White Chairman of the Board
Eugene J. Foley President & CEO
In 2017, Harvard University Employees Credit Union continued to shatter records. We reached $635 million in total assets, a pinnacle for HUECU, while our mortgage servicing portfolio hit an all-time high of $647 million. These unprecedented achievements, along with vigorous growth in membership and products, are testament to the top quality benefits HUECU continues to provide to the communities we serve. A NOT HER R ECOR D -SET T ING Y E A R
S TAT E OF T H E I N DU S T RY Across the nation,
total of $635 million by the end of the year, with solid
the credit union industry built on three years of strong
earnings performance.
performance to reach new milestones in 2017.
Meanwhile, our mortgage servicing portfolio hit
Overall assets experienced a robust growth of 6.8%,
an all-time high of $647 million. More than 700
with total assets of U.S. credit unions at more than
community members started their home buying journey
$1.36 trillion by the end of the third quarter in 2017.
by attending one of our workshops. First mortgage
Loan balances rose by 10.6%, marking four consecutive
originations for the year climbed to $208.6 million, a
years of double-digit growth—something we haven’t
growth of 15% year-over-year. Purchases rose by 27%,
seen since 1988, nearly 30 years ago. Credit union
which helped overcome a slow-down in refinancing
membership in the U.S. also saw robust growth, with 4.3
activity. These strong performances, along with a 4%
million new members joining a credit union by the end
membership growth, demonstrate that our community
of the third quarter in 2017.
continues to find significant value in products and
The total number of U.S. credit unions continued to
services offered by HUECU.
decrease in 2017, albeit not as quickly as the year before.
E VOLV I NG A N D E X PA N DI NG OU R
Falling by 3.7%, the year-over-year decline is consistent
SE RV IC E In 2017 we further developed several
with long-running industry consolidation trends.
member benefits and expanded our footprint to help
R E A C H I NG N E W M I L E S T ON E S In 2017 we
our members meet their financial goals.
saw record-breaking performance across the board.
In April of 2017, HUECU opened a new full-service
Overall assets grew by a remarkable 11.3% to reach a
branch in the Partners HealthCare facility at Assembly
HUECU ANNUAL REPORT
Row in Somerville, MA. This was an exciting opportunity to come together with Partners HealthCare, the largest private employer in Massachusetts, and better serve our members. Partners HealthCare is a not-for-profit health care system that is committed to patient care, research, teaching, and service to the community. Several of the group’s hospitals are teaching affiliates of Harvard Medical School, and Partners is a national leader in
community C A R D S F OR K I D S For the third year in a row, HUECU gathered the community at Partners HealthCare to craft cards and create messages of inspiration for hospitalized children at Boston Shriner’s Hospital for Children, Boston Children’s Hospital, Dana Farber Cancer Institute, MGH Hospital for Children, and Spaulding Rehabilitation Hospital.
biomedical research. The new full-service branch along with an ATM serves the 4,500 employees that reside in the new building. The Partners HealthCare departments in the new facility serve key support functions including finance, human resources, information systems, communications, legal, and more. We are also continuing to support members’ financial wellbeing
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.
through counseling and education initiatives. In 2017, the Credit Union awarded five deserving high seniors with an $1,000 HUECU
T H I N K P I N K C A M PA IG N
scholarship. HUECU is proud to invest in the futures of its
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.
young members by providing scholarship awards towards higher education for the first time. In HUECU’s own financial literacy workshops, we are making good on our promise to be a trusted partner in the community
C H A L K T H E WA L K
for financial services and advice. Last year HUECU hosted over
Once again, HUECU volunteered their artistic abilities at Harvard Square’s annual MayFair fundraiser. This year over $22,000 was raised for local charities and scholarships in support of children’s welfare, clean water projects, global healthcare and more.
140 workshops that were attended by 2,850+ members of our community on a variety of topics including the home buying process, financing college, establishing or repairing credit, creating a personal budgeting, and how to save money. Additionally, over 1,300 of our members took advantage of calling the free financial counseling service we provide. A C K NOW L E D GI 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. As we work toward yet another year of 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 48,000+ members—for whom we will continue to provide sincere, best-in-class service.
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!
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.
B O S T ON M A R AT HON TEAMS For the 121st 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, Dana-Farber, Mount Auburn Hospital and Spaulding.
2017
By the Numbers HOME LOA NS
MORTGAGE OR IGINAT ION
201 5
$1 21 . 3
2016
$1 81 .6
2017
$208.7
MILLIONS
268
MORT G AGE S T O F IR S T-T I M E HOM E BU Y E R S
713
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
ST U DEN T LOA NS
ST U DEN T L OA N B A L A NCE S
201 5
$ 8 4.4
2016
$95.9
2017
$10 4.0
MILLIONS
$ 4.5
MIL L ION
S T U DE N T L OA NS R E F INA NC E D
HUECU ANNUAL REPORT
2017 CHECK ING
CHECK ING ACC OU N T B A L A NCE S
201 5
$90.0
2016
$9 9. 2
2017
$1 10.9
MILLIONS
5,142 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 5
$1 22 . 5
2016
$1 26.0
2017
$1 33.9
MILLIONS
9,003,027 R E WA R D S P OIN T S E A R N E D
2017
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 $635 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
2013
2014
2015
2016
2017
2013
2014
2015
2016
2017
4%
23%
CHECKING
6%
3%
AUTO LOANS
7%
SECOND MORTGAGES
IRAs
CREDIT CARDS
2% OTHER
12%
CERTIFICATES
26%
DEPOSIT DISTRIBU TION
MONEY MARKETS
LOA N DISTRIBU TION
19%
STUDENT LOANS
36%
62%
SHARES
FIRST MORTGAGES
HUECU ANNUAL REPORT
Statement of Condition
SEL EC T ED DATA IN M IL L IONS
ASSETS
2017
2016
Cash & Cash Equivalents
33.8
35.9
Investments
39.4
45.1
545.3
476.8
Property & Equipment, net
1.7
2.3
National Credit Union Share Insurance Fund Deposit
4.8
4.4
Other Assets
10.0
7.8
Total Assets
635.0
572.3
Members’ Shares
525.8
493.2
Borrowed Funds
39.0
18.0
Accrued Expenses & Other Liabilities
12.6
10.7
577.4
521.9
Retained Earnings, Substantially Restricted
57.8
50.4
Accumulated Other Comprehensive Income
-0.2
0.0
Total Members’ Equity
57.6
50.4
635.0
572.3
Loans to Members, net
LIABILITIES & MEMBERS’ EQUIT Y Liabilities
Total Liabilities Members’ Equity
Total Liabilities & Members’ Equity
Statement of Income
SEL EC T ED DATA IN M IL L IONS
INTEREST INCOME
2017
2016
Interest Income from Loans & Investments
25.2
21.7
Interest Expense for Members’ Accounts & Borrowed Funds
-1.9
-1.2
Loan Loss Provision
-1.5
-1.2
Net Interest Income After Provision for Loan Losses
21.8
19.3
6.5
5.4
-20.8
-19.3
7.5
5.4
Other Income Operating Expense Net Income
2017
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 2017, 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 2017 totaled $114,208.
firms that provide audit support of the Credit Union’s
Reimbursable expenses of $169 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 2017. 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
Jim Barrows
George White
Dee Dee Chen
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
Susan G. Simon Since 2017
Mary Straub Clerk Since 2004
George White Chairman Since 1999
Shahar Ziv Since 2016
2017
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
2017
617.495.4460 huecu@harvard.edu @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.