2020 Annual Report (Sharefax CU)

Annual Report Sharefax Credit Union is a cooperative formed for the sole purpose of improving the financial well being of our members.

2020

CHAIRPERSON’S REPORT I want to welcome everyone to our 60th anniversary annual meeting. We have grown tremendously in the past sixty years due to the support of you, our members.

In 1960, the credit union first opened for business in the local UAW Union Hall and later that year rented space in a house on Reading Rd. With its continue growth and through the years, the Evendale, Batavia, Mason, Milford and Lebanon branch offices were constructed to better serve our members.

On January 23rd, the credit union held a groundbreaking ceremony for our new corporate office at Ivy Gateway in Clermont County. Members should be very proud of the success that your credit union has experienced to now require expansion of our corporate office in order to accommodate our growth.

Last year was another financially successful year. The credit union did better than expected exceeding budgeted net income by almost $600 thousand. This has allowed the credit union to invest in the new building and infrastructure to implement our strategic plans.

As my term as Chairperson comes to an end, I promise to continue to serve and support you, our members, in every possible way with the help of dedicated employees and directors. All of us are committed to constantly improving our financial services and will move into the future with the same determination that you have been accustomed to over the past sixty years.

Sincerely yours,

Janet Lake Chairperson

BOARD OF DIRECTORS

Janet C. DavidLake Taylor Chairperson

C. David Taylor

Dan Murphy Recording Secretary

Denny Messer Assistant Secretary

Susan Ochs

Dave Aaronson

Monica Palkovic

Mark Fox

A MESSAGE FROM THE PRESIDENT The world has changed drastically in a very short period of time. The Coronavirus pandemic has taken not only over 200,000 American lives and many more around the world, but also stunned the financial industry and changed operations forever for many businesses. Masks and social distancing have become part of everyone’s daily vocabulary. Working from home has become the norm for many employees. The fear of infecting oneself or older relatives has kept many individuals captive in their homes. Restaurants, bars, and the travel & entertainment industries have been damaged particularly hard. When these businesses will recover is anyone’s guess. An effective vaccine is everyone’s hope for an end to this period of health and financial misery.

Unemployment as low as 3.5% earlier this year is now fluctuating around 8 percent, but that number does not include individuals, who have dropped out of the job market unable to find suitable employment. Making things even worse, the federal deficit has exploded due largely to the taxpayer stimulus checks, the PPP loans, and tax incentives for businesses. However, the budget was already running a deficit of over a trillion dollars per year prior to the pandemic due to government spending and the 2017 tax cut. The resulting total federal deficit now stands at over $25 trillion dollars and cannot be ignored much longer without dire consequences. Although, the economy has recovered somewhat from its low point in June, there is a long way to go before the country regains its prior momentum.

The stock market is one area of the fiscal picture, which has held up relatively well over the past nine months. This is not due to economic results as much as short term interest rates being near zero. Investors are accepting the risk and gambling on better returns in the stock market than the extremely low rates being paid on savings certificates and bonds. In addition, the Federal Reserve appears committed to keeping rates artificially low for an extended period of time with most economists predicting rates not to increase until 2024 at the earliest.

One of the benefits of historically low interest rates was mortgages becoming more affordable for many consumers. These low rates have resulted in high mortgage demand and a surging housing market. This occurrence could not have happened at a better time for the credit union as interest in indirect lending was very low during the 1st half of the year due to Covid 19. The notable number of mortgage closings has been a bright spot during this unprecedented period.

With all of the volatility in the financial world today, there is one place where members can place their trust. Sharefax Credit Union has been a model of financial stability serving southwest Ohio for 60 years. 2019 was proof again of just how successful our credit union has been. The loan department generated over $101 million in loans and increased total loans outstanding by 7.67%. Our delinquency numbers were even better with the dollar amount of delinquent loans decreasing by over 25% and our reserves/undivided earnings increasing by over 7%. In addition, even with low investment and loan rates, the credit union was able to maintain a reasonable net spread and profit margin in 2019. The credit union has accomplished much of this financial success by containing costs and managing growth. However, continuing the financial success of last year has been difficult due to the slowdown in the economy. With consumer debt already higher than normal, the loss of jobs is starting to reflect higher delinquencies in 2020.

Although the economic concerns are real, the credit union is still very positive about the future and firmly believes that our economy is strong enough to survive this pandemic. Sharefax certainly has the resources to not only survive but prosper even while moving forward with the construction of our new corporate office.

Since Sharefax is entering a new phase in its long history, the Board decided to rebrand our credit union with a new logo representing trust, innovation, & service and to create a building that represented its vision of the future. Since credit unions historically have been burdened with the perception of restricted access, the credit union wanted to change this false image by building a signature facility, which reflects our openness to the entire community. The Board feels that this iconic building has met its objective and captured the essence of our brand. Hopefully, at next year’s annual meeting, Sharefax will be able to showcase our new corporate office.

The grand opening of our new corporate office will be a good way to celebrate our 60th anniversary in 2021. It will also be an extremely hectic year. Not only will the credit union be transitioning to our new corporate headquarters next year, but also are adding a new person-to-person payment system named Zelle, an ultimate benefit checking account, a real time responsive alert system, and instant issue plastic cards. However, even in the midst of this whirlwind of activity, your Board will never lose sight of our mission. There will be many challenges along the way including operating during a pandemic, but management & staff are up to the challenge and committed to improving the financial lives of our members.

Art Kremer

President/CEO

Statements of Income

Statements of Comprehensive Income

Statements of Financial Condition