2017 Annual Report
Sharefax Credit Union (513) 753-2440
www.sharefax.org
From the Chairperson
From the President
Welcome to our annual 2016 could easily be referred meeting. In 2017, Sharefax to as “the year of the remains a financially sound, underdog” after the surprise competitive credit union victory by President Donald devoted to its members. The Trump, and with longtime needs of our members always underachievers, the Cleveland come first as shown by the Cavaliers, winning their first Board’s decision on policies, NBA championship, and the products, and quality service. Chicago Cubs finally earning a This year has been not only World Series ring in more than successful but hectic as we are in the process of converting over to a new computer 100 years. This truly has been an astonishing year. system. In addition, the purchase of a tract of land for our new corporate/branch office is complete and In many ways, credit unions are the “underdogs” a new marketing team is in place eager to promote in the financial service industry. With banks the benefits and maintain the image of Sharefax. constantly lobbying to limit our services and growth capabilities, credit unions have continued to gain Sharefax is performing well relative to our peers. Our assets are up and our delinquently ratio is down in members, vehicle loan market share, and assets despite the bankers’ resistant efforts. Sharefax is to .89% as of December 31, 2016. proud to be one of those successful credit unions. The IT department and entire staff are in the process The primary reasons for this positive growth are that of upgrading to a new core computer system. It will credit unions provide great value to their members be more efficient and user friendly for our members. and continue to be relevant to consumers even in this highly technical world. Our land at Ivy Point, next to the future Mercy Hospital, is now under development. The street However, to remain relevant has required the work is starting and talks with Mercy Hospital concerning signage facing I-275 are moving forward. Board of Directors to make difficult decisions on expenditures for technology. These investments Many hours of planning will take place before any are expensive, but necessary to provide the type final decisions are made. of delivery channels desired by our members. Alli Hauer and Raye Kimberlin, our new marketing The primary example of this commitment is our representatives, bring both experience and youth upcoming conversion on July 1st to a new core to our program. In our marketing focus, we are system, which includes upgrades to our home & trying to instill in the millennial generation the need mobile banking products. This will result in the for a sound financial understanding and the value credit union becoming more individual centric Sharefax can offer in mortgage, business, home whereby a member will have easier access to their improvement, and personal loans. Quite simply, if entire relationship at Sharefax. One way that this you need a loan for any reason, you should always consider Sharefax and compare what Sharefax has to will be accomplished is by the electronic delivery of documents and signatures including both loan & offer to other financial institutions. membership cards. This feature will allow members I am proud to be on the Board and to support the ability to join the credit union and to close our members. It is a great pleasure to be working loans over the internet. These additions will be with dedicated employees and directors, who are critical pieces in our ability to offer members the committed to constantly improving our financial technology expected in 2017. services for our members. Sincerely, Janet Lake, Acting Chairperson of the Board
Conversions of this magnitude are never easy. Mass amounts of data must be mapped and transferred correctly to the new system. New operational procedures must be developed and employees
trained in every aspect of the credit union. Some inconveniences cannot be avoided; such as being closed on conversion weekend without access to our branches, home banking, call center, or shared branching. The sheer amount of change will be stressful for both staff and members. However, at the end of the day, our members and employees will have an efficient, advanced system able to offer state-of-the-art technology to our members. During the upgrade, member data security will remain a top priority for the new core system. Improvements in firewalls & protocols, and implementation of the EMV chip in our plastic cards have improved the overall security level of the credit union. The IT department is committed to protecting our data and will continue to invest in the necessary technologies to accomplish this goal. Not only are we experiencing change in operations, but also in our interest rate environment. The economy has been growing in strength over the past 8 years and is now functioning at a robust level. As a result, the Federal Reserve has begun implementing their long awaited strategy of raising rates to combat anticipated inflation. Their approach so far has been slow with two 25 basis point increases since December and at least two more expected over the remainder of the year. Whether this rate pace continues, slows, or even quickens is dependent upon inflation and the state of the economy. To prepare for the anticipated lift from our upgrades and to address our lack of office space for support staff, the credit union has purchased land in the Eastgate area for a future corporate office and branch. Our current location is being negatively impacted by the county’s plan for changes in Rt. 32 and Old State Route 74, which will affect our visibility and access to the Batavia office. The new location will resolve those concerns and allow the credit union to continue to grow. The time schedule for construction has not yet been determined, but the new road is now being installed. After construction is complete, the current Batavia office will remain open as a branch for the foreseeable future. Part of our growth strategy is to appeal to Millennials. In order to reach this demographic, the credit union has introduced products; such as
student checking, 1st time home buyer seminars & program, a partnership with Star One Realty offering closing cost discounts, and our Champion Club “dividend plus” account. Many of these products and programs appeal not only to the younger generation, but to all of our members. Sharefax is marketing these benefits by advertising in partnership with FC Cincinnati Soccer, a professional team with a quickly growing fan base in Cincinnati. Hopefully, our young members, who grew up playing & loving soccer before the sport was highly recognized in this country, can relate with another “under-appreciated underdog” and begin taking advantage of the benefits offered by their credit union. All of these upgrades and improvements have been made possible by the financial health of your credit union and the Board’s commitment to the financial betterment of our members. With this type of support and dedication, the future of Sharefax can only be bright. Art Kremer, President
Credit Committee Report The primary function of the credit committee is the supervision of loans to members in an effort to ensure the safety and soundness of Sharefax Credit Union’s loan portfolio. Keeping with the credit union’s philosophy of providing affordable loan opportunities to its members, Sharefax approved 3592 loans during 2016 for a total amount of $59,697,117. Loans outstanding decreased by 2.9%. Loans versus savings on the books at year end was 59.02%. For 2016, our delinquency amounts decreased from 1.04% to 86%. We extend our sincere appreciation to our members for their continued support of our products and services and to our staff for their hard work and dedication. C. David Taylor, Committee Chairman
Statements of Income & Comprehensive Income
Years Ended December 31, 2016 & 2015 2016 2015 Interest Income Interest and fees on loans $ 8,377,467 $ 8,500,140 Interest on investments 1,215,255 1,125,743 Total Interest Income 9,592,722 9,625,883 Interest Expense Members’ share and savings accounts 2,717,327 2,380,233 Borrowed funds 16 Total Interest Expense 2,717,343 2,380,233 Net Interest Income 6,875,379 7,245,650 Provision for Loan Losses 1,110,195 1,657,259 Net Interest Income after Provision for Loan Losses 5,765,184 5,588,391 Non-Interest Income Interchange income 1,340,165 1,420,870 ATM and ACH fee income 940,444 935,543 Share draft fee income 946,692 928,456 Insurance commissions 156,865 147,562 Gain (loss) on other investments 208,070 105,180 Gain (loss) on foreclosed assets 341 16,957 Other 177,776 164,468 Total Non-Interest Income 3,770,353 3,719,036 Non-Interest Expense Compensation and benefits 3,918,027 3,752,486 Occupancy 417,786 463,569 ATM network 787,313 793,066 Indirect lending 746,771 964,539 Data processing 201,755 211,684 Marketing and promotions 311,767 241,981 Credit card program 171,954 155,163 (Gain) loss on sale of fixed assets 236 2,176 Other 1,492,213 1,525,142 Total Non-Interest Expense 8,047,822 8,109,806 Net Income $ 1,487,715 $ 1,197,621 Net Income $ Net change in unrealized gain on securities available-for-sale Net change in fair value of defined benefit retirement plan Total Comprehensive Income $
2016 1,487,715
$
1,344 (175,413) 1,313,646
2015 1,197,621 30,440
$
Statements of Financial Condition
Years Ended December 31, 2016 & 2015 ASSETS 2016 Cash and Cash Equivalents $ 25,243,579 Deposits at Corporate Credit Union 1,500,000 Time Deposits 42,859,000 Securities Held-to-Maturity 69,376,806 Securities Available-for-Sale 223,122 Other Investments 16,052,752 Federal Home Loan Bank Stock 568,800 Loans to Members, Net of Allowance for Loan Losses 190,275,773 Loans in Process of Foreclosure 324,615 Loans in Process of Liquidation 666,632 Accrued Interest Receivable 734,632 Foreclosed Assets Property and Equipment 5,577,070 NCUSIF Deposit 2,978,359 Defined Benefit Plan Asset 3,417,619 Other Assets 282,099 Total Assets $ 360,080,858
2015 $ 34,219,531 2,293,807 16,134,000 63,827,222 221,778 15,286,707 568,800 196,035,139 495,685 422,118 614,350 40,000 3,764,545 2,838,353 3,575,127 205,849 $ 340,543,011
LIABILITIES AND MEMBERS' EQUITY Members' shares and savings accounts $ 326,223,293 $ 307,967,373 Line of credit Accrued interest payable 131,334 113,547 Accrued expenses and other liabilities 1,366,937 1,423,246 Postretirement liability 145,468 138,665 Total Liabilities 327,867,032 309,642,831 Commitments and Contingent Liabilities - Members' Equity, Substantially Restricted Regular reserves 9,699,748 Undivided earnings 24,097,628 Accumulated other comprehensive income (loss) (1,583,550) Total Members' Equity 32,213,826 Total Liabilities and Members' Equity $ 360,080,858
9,699,748 22,609,913 (1,409,481) 30,900,180 $ 340,543,011
(526,570) 701,491
Board of Directors
C. David Dan Murphy Taylor
Denny Messer
Dave Aaronson
Susan Ochs Phil Carlberg
Mark Fox
Janet Lake