2021 HUECU Annual Report

2021

ANNUAL REPORT H A R VA R D U N I V E R S I T Y E M P L O Y E E S C R E D I T U N I O N

2021 Highlights 10.8%

$1.038

ASSET GROWTH

TOTAL ASSETS

billion

2021

New Heights $196.8

+10%

CHECKING ACCOUNT BALANCES Millions

When the books closed for the month ending September 30, 2021, HUECU’s Assets were $1,013,494,008. This marked the first time that our institution officially surpassed $1 billion in assets!

$844.5

DEPOSIT ACCOUNT BALANCES

Millions

18

NEWLY CREATED POSITIONS

16

PROMOTIONS

1

YEAR END 2021

HUECU ANNUAL REPORT

+12%

New Products & Services

While not quite “normal,” the improved sense of stability in 2021 allowed HUECU to forge ahead on the mission to provide an exceptional banking experience for our members. We developed new products that return more value to members.

CREDIT CARD

CHECKING

LOAN PRODUCT

Introduced the Platinum Rewards+ credit card, offering 1.5% cash back on all purchases.

Launched Smart Rewards checking accounts, with choice of premium interest or cash back benefits.

Added boat and RV loans to our vehicle loan offerings in response to increased member demand.

MORTGAGE

ZELLE®

FICO ® SCORES

Expanded home lending footprint to provide mortgages to members in all New England states.

Introduced Zelle® , the industry leading P2P platform, to enhance our members’ digital experience.

Began offering free FICO® Scores for all members integrated into our Mobile and Online Banking platforms.

2021

2

Report from the Chairman & CEO

George White Chairman of the Board

Craig Leonard President & CEO

A Y E A R OF R E S I L I E N C E & G ROW T H

to-person payment platform. We also introduced

In 2021, as all of us continued to adjust to the re-

free FICO® score access for all members within our

verberating effects of the global pandemic, HUECU

Online Banking interface and HUECU Mobile App.

renewed our focus on helping members meet their financial goals amidst these changing times. The legacy of trust between the Credit Union and the community we serve propelled our sixth consecutive year of double-digit asset growth: taking us above the $1 billion mark for the first time, and enabling us to extend more value to our members who remain at the heart of everything we do.

R E T U R N I N G VA LU E T O M E M B E R S HUECU’s growth and prosperity allows us to give back more rewards to our members: returning the value they’ve invested in the Credit Union. This year we introduced a new Rewards+ credit card with generous cash back benefits for cardholders.

In addition, we launched Smart Rewards Checking products to offer cash back on debit payments or

A DA P T I N G W I T H OP T I M I S M

premium interest on checking account balances –

While we’ve all been challenged to rethink our

two great benefits that aren’t commonly extended

understanding of “normal,” the improved sense

to checking account holders.

of stability in 2021 allowed HUECU to forge ahead

3

on our mission to provide an exceptional banking

N E W B OR ROW I N G OP P ORT U N I T I E S

experience for members. Like many within our

As our members shifted their habits, HUECU intro-

community, we learned to adapt to new ways of

duced enhancements to our loan programs to meet

working, living, and connecting. With optimism

their changing financial needs; underpinned by our

and resilience, we found creative ways to overcome

long-standing commitment to banking products

the challenges and enhance our members’ financial

with low rates and simple design, that are easy to

lives in brand new ways.

understand and use.

As an ever-increasing share of member busi-

This year we saw an increase in member purchase

ness is conducted through digital channels, we’ve

activity on boats and RVs, so in response, HUECU

continued to add new features and functionality

launched a new boat and RV loan product to give

to our Online and Mobile Banking platforms. In

members more ways to finance their adventures.

2021 HUECU launched a partnership with Zelle®

Our membership has also become more geographi-

to provide members a seamless way to send and

cally diverse, prompting a 2021 expansion of the

receive money with the industry’s leading person-

HUECU mortgage footprint. Now wherever they re-

HUECU ANNUAL REPORT

side in New England, members have access to straightforward, hassle-free home loans.

COMMUNITY

S O C I A L R E S P ON S I B I L I T Y HUECU takes seriously our commitment to be a socially responsible actor for our members, our employees, and the community at large.

In 2021, recognizing the unprecedented financial impact of COVID for many households, we bolstered our offering of free Financial Wellness education. HUECU hosted

DEETTA JONES We partnered with DeEtta Jones and Associates in August 2021 to enhance our workplace diversity, equity and inclusion efforts.

70 personal finance webinars, and we launched FICO® Scores within Online Banking to give members easier access to essential information about their credit.

This year was also an important opportunity to continue the momentum of 2020 in terms of fighting for diversity and inclusion. Intent on learning from the experts and holding ourselves accountable, in August HUECU partnered with DeEtta Jones and Associates – a minority- and woman-owned management consulting

CHARITABLE GIVING We increased our charitable giving, making $225,000 in donations to a variety of community organizations.

and training firm – to make new inroads for diversity, equity and inclusion within the HUECU workplace.

N E W M I L E S T ON E S Steady strides forward amidst the stabilizing conditions of 2021 supported HUECU to end the year with a strong financial performance. Our sixth consecutive year of double-digit asset growth propelled us over the $1 billion mark for the first time. As always, this success

FINANCIAL LITERACY OUTREACH We presented more than 70 Personal Finance events, promoting critical financial skills within our communities.

would not be possible without the trust and commitment of our members; and as we move forward, HUECU remains steadfast in our promise to reward that loyalty with exceptional member value and experience.

S A LU T I N G T H E H U E C U T E A M It would be impossible to capture the talent and dedication of HUECU employees in just a few words, but suffice to say that our people are, without a doubt, the Credit Union’s most important asset. This year, our teams once again exhibited unparalleled perseverance and drive in pursuit of bringing HUECU members the

PBHA AWARD We received the Summer Urban Program (SUP) Champion award in April 2021 during the Phillip Brooks Housing Association’s (PBHA) Annual SUP Auction. HUECU was recognized as a partner whose support has been instrumental in making SUP possible.

best possible financial experience. To our staff and to our volunteer board: Thank you truly for all you do.

2021

4

Report from the Treasurer

John T. Litchen Treasurer

The Credit Union continued to perform strongly, posting another year of solid earnings. Assets increased by 10.8%, with a yearend total of $1.038 billion.

Positive growth was realized in many areas of the Credit Union, including 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.

LOANS OVER 5 YEARS In millions

DEPOSITS OVER 5 YEARS In millions $900

$900

$800

$800

$700

$700

$600

$600

$500

$500

$400

$400

$300

$300

$200

$200

$100

$100 2017

2018

2019

2020

2021

CHECKING

2%

2020

24%

MONEY Markets

36%

HUECU ANNUAL REPORT

4%

2%

Credit cards

DEPOSIT DISTRIBUTION

2021

Second Mortgages

4%

SHARES

5

2019

Auto loans

ira s

Certificates

2018

2%

23%

14%

2017

OTHER

LOAN DISTRIBUTION

22%

STUDENT LOANS

65%

First Mortgages

Statement of Condition

Selected Data in millions

2020

2021

Cash & Cash Equivalents

90.5

82.7

Investments

57.3

88.0

761.4

839.2

Property & Equipment, net

3.6

3.8

National Credit Union Share Insurance Fund Deposit

6.4

7.3

Other Assets

17.6

17.0

936.8

1,038.0

Members’ Shares

752.1

844.6

Borrowed Funds

90.2

90.6

Accrued Expenses & Other Liabilities

14.4

15.1

856.8

950.2

Retained Earnings, Substantially Restricted

79.3

88.4

Accumulated Other Comprehensive Income

0.7

-0.6

80.0

87.8

936.8

1,038.0

2020

2021

Interest Income from Loans & Investments

32.6

33.0

Interest Expense for Members’ Accounts & Borrowed Funds

-5.6

-3.9

Loan Loss Provision

-3.9

-1.9

Net Interest Income After Provision

23.0

27.2

Other Income

10.5

9.7

-25.5

-27.8

8.0

9.1

ASSETS

Loans to Members, net

Total Assets

LIABILITIES & MEMBERS’ EQUITY Liabilities

Total Liabilities Members’ Equity

Total Members’ Equity Total Liabilities & Members’ Equity

Statement of Income

Selected Data in millions

INTEREST INCOME

Operating Expenses

Net Income

2021

6

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 2021, the Committee met regularly to

Reimbursements to Board Directors, including

review the monthly financial statements and au-

other general expenses associated with Board

dit reports, as well as to discuss other operational

meetings, conferences, trainings, committee

topics of interest. We are assisted in our efforts

meetings and planning sessions within 2021

by external firms that provide audit support of the

totaled $10,710. No reimbursable expenses to

Credit Union’s finances and internal controls. Wolf

members of the Audit Committee and Credit

& Company, P.C., audits our financial statements.

Committee occurred. All Board Director expenses

Internal audits continued to receive significant at-

and reimbursements were made in compliance

tention during 2021. Healy & Healy, our partnered firm, performed internal audits throughout the

with the regulations of the National Credit Union Administration and the Massachusetts Division of

year to test Credit Union procedures and con-

Banks.

trols in branch operations, wire transfers, deposit

The Committee wishes to thank the Credit Union

operations, mortgage and student loans, among

management for their cooperation, support and

other areas. The Committee reviewed their find-

assistance throughout the year.

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

COMMITTEE MEMBERS

Dee Dee Chen

Susan Simon

April Edrington

George White

Harman Kaur

7

HUECU ANNUAL REPORT

Officers

Craig Leonard

Tom Montilli

Katie Armstrong

President & CEO

EVP, Chief Experience

SVP, Chief Financial

John Degnan SVP, Operations

Amy Murphy Associate Director of Human Resources

Officer

Peter Buchanan SVP, Real Estate Lending

Officer

Board of Directors

George White Chairman

Jeremiah Murphy Vice Chair

John Lichten Treasurer

Mary Straub Clerk

Dennis Campbell

Since 1999

Since 2003

Since 1992

Since 2004

Dee Dee Chen

Ann Dexter

April D. Edrington

Karrie Ford

Harman Kaur

Since 2015

Since 2015

Since 2016

Since 2014

Since 2021

Thomas Lucey

Jason Luke

Gonzalo Muñoz Sanz

Susan G. Simon

Shahar Ziv

Since 2006

Since 2014

Since 2021

Since 2017

Since 2016

Since 2013

2021

8

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 University

Beth Israel Deaconess Medical Center

Lesley University

Boston Children’s Hospital

Massachusetts Eye and Ear Infirmary

Brigham and Women’s Hospital

Mass General Brigham

Cambridge Health Alliance

Massachusetts General Hospital

The Coop

Massachusetts Mental Health Center

Dana Farber Cancer Institute

Medical Academic and Scientific Community Organization

Dumbarton Oaks Research Library GBH Boston

MGH Institute of Health Professions

Harvard Business Publishing

Mount Auburn Hospital

Harvard Management Company

Shriners Children’s Boston

Harvard Pilgrim Health Care

Spaulding Rehabilitation Hospital

Visit HUECU.ORG for the full list of affiliated organizations.

9

HUECU ANNUAL REPORT

2021

10

Not a bank. A benefit.

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.