2019 VolCorp Annual Report

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FLAGSHIP

STEWARDSHIP LEADERSHIP

FELLOWSHIP

PARTNERSHIP


OUR

Mission To serve as the primary financial partner with credit unions in providing superior products, services and support.


Table

OF CONTENTS Partnership:

Member Survey Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Fellowship: FORUM’19 Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Leadership: Superior Products and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Stewardship: Enterprise Risk Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Flagship: WE ARE VOLCORP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Corporate Information: Chairman/President’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Treasurer’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Supervisory Committee’s Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Senior Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Member Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25




from our

MEMBER SURVEY

WHAT MAKES YOUR VOLCORP EXPERIENCE UNIQUE?

We have no other partners like VolCorp. Readily accessible and always willing to help. VolCorp looks out for our best interest; they’re not just making a pro t off us. VolCorp knows our business. They make us feel like we are their number one partner. VolCorp’s mission is our success. They make us feel like we are their number one partner. VolCorp is not only our Corporate, but our partner in getting the business accomplished that we need for our members. Our concerns are VolCorp’s.

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from our

MEMBER SURVEY

ARE YOU LIKELY TO RECOMMEND VOLCORP TO YOUR PEERS?

YES! 97.46%

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from our

MEMBER SURVEY

WHAT ONE WORD OR PHRASE BEST DESCRIBES VOLCORP?

Cooperative

Professional Vendor Simple ValueExcellent Critical Quality

Help Great Resource

Dependable

Completely Committed

Integrity

Easy

Help

Service

Satis ed EfficientNecessary

PartnerTrust

Win Ally Amazing

Knowledgeable

Strategic

Relationship Awesome

Solid

Expanding

Friendly

Courteous

Ours

Reliable Quality Friend

Honesty Committed

Reliable Needed

Collaboration

Ongoing Relationship

Good Competitive

Accommodating

Valuable

Needed

Enjoyable

StrongDependablePartnership Stable Con dence Steadfast

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Turn

from our

TO VOLCORP...

MEMBER SURVEY

for a

PARTNERSHIP

ARE YOU VERY SATISFIED you can trust! OR SATISFIED WITH YOUR RELATIONSHIP WITH VOLCORP?

YES! 96.61%

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Amanda Thomas President, TwoScore

Rock & Roll Pianos at Ravenswood Mansion

Ted Ahn President, CRF Advisors

Artists at work at the AR Workshop

Golfers at Vanderb

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Dr. Samuel L. Jones Raising the B.A.R.

Matt Davis Founder, gameFI

Je Merry CEO/President, VolCorp

David Mills Carr, Riggs & Ingram

Phillip Fulmer University of Tennessee Athletic Director

Coach Fulmer with VolCorp Credit Union Members

bilt Lengends Club

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Enterprise Risk Management (ERM) is the

process narrows the gap between risk

process of identifying and determining risk

management and decision making.

appetite corporate-wide. A well-structured

Strategic, competitive, economic, credit,

program encompasses the culture,

compliance, operational, nancial and

capabilities, and practices, integrated with

reputational risks are all identi ed and

strategy-setting and performance, which

assessed by VolCorp’s board and

organizations rely on to manage risk in

management. VolCorp’s program ties all risk areas together including strategic planning,

creating, preserving, and realizing value.

regulatory and legal compliance, vendor management, business continuity,

VolCorp’s ERM program provides a

operational controls and security, along with

framework for risk management that

nancial and credit risk. This framework

proactively addresses risks and

strengthens each process individually and

opportunities that will create value to the

facilitates a strong unity of all resources to

corporate and to our members. The ERM

better protect and serve you, our member.

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MATT HOLDEN VP LENDING - BOWATER CU

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2019 CHAIRMAN AND PRESIDENT’S REPORT A year of reinforcing foundational strength – that would

With that accomplishment would come the ability to

be a good way to characterize 2019 for VolCorp.

count all Perpetual Contributed Capital in our Tier One

Throughout the year, we put much emphasis into

Leverage Ratio. We achieved that milestone in March

strengthening areas such as our regulatory posture, our

of 2019, providing further evidence in our numbers of

systems, culture, and

what we already

risk management

knew, which was that

processes, and our

VolCorp was on a

support of the

solid nancial

movement as a whole.

foundation.

All the while we Internally, we also

served 332 credit

invested during the

unions in 19 states,

year on further

ranging from under $1

strengthening our

million in assets to

technology, culture,

greater than $5 billion,

and risk

with correspondent services, liquidity solutions, investment

management Jeff Merry President/CEO

John Jacoway Board Chairman

processes to address the new realities in

solutions, and much

which we operate. The technology train is moving fast

more. When these regulatory, internal, and external

and it is paramount we keep up, so we spent time

areas come together with uni ed strength and loyal

making sure the foundation is strong enough to

members, you have a recipe for success.

handle all that needs to be built on top of it in this The strengthening of VolCorp’s regulatory posture

ever-changing environment. Having that foundation

came in the form of a project beginning nearly a

strong enough for what lies ahead is key to our ability

decade ago when the regulations governing corporate

to support our credit unions in the way you deserve.

credit unions (Part 704) were overhauled and the Externally, VolCorp also stepped up in 2019 to help

lengthy mission of satisfying those capital

support the movement by backing the Open Your Eyes

requirements began. As many of you know, just a

Campaign efforts of CUNA on behalf of our credit

couple of short years ago, the regulation was

unions to support you and your ability to deepen

modernized and the expectations of corporates shifted

relationships in your communities. With hopes that this

to achieving a retained earnings ratio of 2.50%.

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CONTINUED - Chairman and President’s Report campaign will build momentum for all of our credit

scores and will continue to work to, not only live up to

unions, the movement can gain further foundational

these expectations, but to exceed them.

strength and momentum together.

We talk a lot at VolCorp about why we do what we do

As we continue to explore ways to strengthen our

leverage our expertise, technology, and relationships to build a member experience for you that is unparalleled anywhere else, we look to your feedback every year to get an idea of how we are doing. And every year, we are proud of what we hear and gladly report some of the highlights back to you. Some of the most important and gratifying feedback from the member survey were the percentage of credit union respondents who

success. We have a phenomenal team here

foundation and to

and how each one of our staff is a critical part of our

...we put much emphasis

into strengthening areas such as our regulatory

at VolCorp who are passionate about what they do. We also talk about how each and every one of our members is an essential piece of what we do and we know the

posture, our systems,

passion you have for your

culture, and risk

those dots and realize the

management processes, and our support of the movement as a whole.

indicated they view VolCorp as a Trusted Strategic Partner (96%),

members. We connect

better the experience we create for you, the easier it is for you to take your passion forward to your members. We are honored to be a part of that equation. We are humbled to be able to serve you. And, we are blessed to be a part of helping your

who feel VolCorp stays true to its mission and values

credit union succeed. We thank you for so many years

(97%), who feel VolCorp always operates with integrity

of creating success together and we are excited about

(99%), and who indicated they can always trust

working with you to do that for many more.

VolCorp (99%). Overall satisfaction scores were 4.77 on Respectfully submitted.

a 5.00 scale. We are very humbled and proud of these

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2019 TREASURER’S REPORT As a corporate credit union our primary

and asset-backed securities with

objective is to be a trusted partner,

sufficient collateral and/or credit

providing liquidity and a safe haven for

support continued to dominate the

member deposits with dependable

portfolio composition, both providing

access to funds and services. Over the

that unique balance VolCorp seeks.

last few years, both the economy and

Securities are carefully selected to t the

member loan portfolios have expanded,

conservative risk pro le VolCorp adheres

underscoring the importance for

to while maintaining a balanced focus

VolCorp to maintain a liquidity level

on safety and yield. Unrealized losses of

sufficient to meet members’ needs.

$581 thousand remain at less than one

Our ALCO committee meets monthly

percent of the portfolio, an impressive

overseeing asset-liability management, investments, and credit risk. The

Ron Smith

position during a period of increasing

Treasurer Enbright Credit Union

interest rates. Strategic new purchases

committee monitors corporate liquidity

and the continued rise of LIBOR and Fed

in order to ensure funds are available when our

overnight rates during the year added to portfolio

members need them, while at the same time allowing

earnings, allowing VolCorp to pass rate increases on to

earnings and growth opportunities for both the

members during the year.

corporate and member credit unions. Financial performance depicts 2019 as another VolCorp strives to be a strategic partner, with whom

exceptional year for your corporate. Regulatory and

our members look to rst for value added services.

nancial ratios re ect strong nancial growth. The

This can only be achieved through a commitment to

retained earnings ratio grew to 2.84% at December 31,

service excellence, offering new and innovative

2019, exceeding the retaining earnings regulatory

products such as iCare and Transfund. Your corporate

threshold at which point all PCC is now included in the

is also devoted to continually enhancing existing

Tier 1 capital calculation. NCUA regulations consider a

premium services such as our V-Portfolio platform.

Tier 1 capital ratio of 4% “adequately capitalized”, while 5% or greater is “well capitalized”. Over the year

At December 31, 2019 VolCorp’s securities portfolio

VolCorp’s Tier 1 capital ratio grew from 6.73% to 8.12%.

stood at $802 million. Government/agency securities

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CONTINUED - Treasurer’s Report A review of the audited nancial statements indicates

accustomed, and we look forward to providing value to

internal operations are sound. VolCorp is well

your credit union in 2020 and for many years to come.

positioned to serve members as they have become

VolCorp strives to be a strategic partner, with whom our members look to rst for value added services...offering new and innovative products such as iCare and

Transfund. Your corporate is also devoted

to continually enhancing existing premium services such as our V-Portfolio platform.

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2019 SUPERVISORY COMMITTEE’S REPORT The focus of the Supervisory

audit function for VolCorp during

Committee is to oversee management

2019. All audits and their

practices and policies, safeguard

recommendations were reported

member assets, and ensure that

to the Supervisory Committee.

VolCorp’s nancial reporting

Information Security and Cyber

objectives are met. To administer

Security reports were provided to the

these responsibilities the Committee

Committee monthly by Information

must establish audits, inspect or

Security Officer Mr. Tyler McNair.

cause to be inspected the securities Based on the results of the internal

portfolio, cash and other accounts of

audits, security reports, external

VolCorp, to inspect or cause to be

audit and the joint examination by

inspected the internal controls over nancial reporting, to opine on the

Rick Mikels Committee Chairman Tennessee Members 1st Federal Credit Union

nancial statements at the end of the

...

scal year and to cause a full report of these audits to be made to the Board.

Veritas Federal Credit Union

Healthcare Services Credit Union

responsibilities, the independent accounting rm of Carr, Riggs & Ingram, LLC was engaged to perform

Institutions and the National Credit Union Administration conducted

Karen Woodall

Susan Tant

In accordance with these

Tennessee Department of Financial

Nick Arvon West Virginia Federal Credit Union

during scal 2019, the Committee believes that it has properly represented the interests of the membership and its responsibilities to VolCorp.

John Merritt Enrichment Federal Credit Union

VolCorp's annual audit. Their letter

The Committee would like to commend the board of directors,

renders an “unmodi ed” opinion on

management and staff for their

the nancial statements of Volunteer Corporate Credit

continued support and commitment to the audit and

Union as of December 31, 2019 and 2018, and the years

review process and for their continuing dedication of

then ended. Mr. Phillip Reynolds, CPA, CIA, was

services to member credit unions.

engaged by the Committee to perform the internal

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2019 SENIOR MANAGEMENT

Jeff Merry

Phillip Cochran

Jeff Dato

Susan Stack

President/CEO

SVP/CIO

SVP/CRO

SVP/CFO

Ben Williams

Sandy Swofford

Lisa Wright

SVP/CTO

SVP Member Experience/Consulting

VP Administration & Facilities

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2019 BOARD OF DIRECTORS

John Jacoway

Todd Swims

Ron Smith

Mike Cooper

Chairman Southeast Financial CU

Vice-Chairman Leaders CU

Treasurer Enbright CU

Secretary AllWealth FCU

Rick Mikels

Brian Trotter

Sandra Yocum

Tennessee Members 1st FCU

EPB Employees CU

Strip Steel Community FCU

Sandy Lingerfelt

Judy Hester

Clinch eld FCU

Northern KY Educators’ FCU

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MEMBER SERVICES ezfunds ACH

EFT

Liquidity

ACH Settlement ACH Receipt ACH Origination ACH SEG Origination ACH Return (Exception) Handling ACH Contingency Services

Electronic Funds Transfer:

ALM/IRR

Investment

Asset/Liability Management & Interest Rate Risk Management:

V-Portfolio: Online Trading Monthly Reporting Pre-Purchase Analysis Portfolio Accounting Portfolio Analytics Brokerage Service Investment Consultation Certificates of Deposit SimpliCD Securities Settlement and Safekeeping Reverse Repurchase Agreements Loan Participation (LoanStreet)

Lines of Credit Term Loans Secured Loans Unsecured Short-Term Loans Letters of Credit SimpliCD Issuance Central Liquidity Facility (CLF) FRB Discount Window Program Loan Participation (LoanStreet)

ALM/IRR Modeling ALM/IRR Validation Service ALM/IRR Policy Consultation ALM/IRR Seminars ALM/IRR Training

Consulting ACH Audits ACH Risk Assessments BSA Reviews Strategic Planning Charter Expansion/Conversion Corporate Statement Reconciliation Education/Training Policy & Procedure Development & Review Special Projects

Convenience Interactive Website VolCorp Online Access Image-NET NET-Statement e-Alerts

Wire Transfers ezfunds Foreign & Domestic Wires) Tele-Transfer Electronic Debit Transfer (EDT) Wire Contingency Services

Item Processing Member Share Drafts Corporate Share Drafts Money Orders Cashiers Drafts Check Collection (ezcapture): Branch Capture Merchant Capture Image Delivery of Deposit Return Items Receipt & Processing of X9 Files (Check Collection) Home Banking Images

Correspondent Cash Vault Program Federal Reserve Check Collection Federal Reserve Coin & Currency Ordering Treasury, Tax & Loan Depository Reserve Requirement Settlement Pass Through Settlements

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Member Accounts Transaction Account Premier Account Member Managed Fund Account Notice 90 Account Christmas Club Accelerator Perpetual Contributed Capital

Strategic Partnerships Business Services (CU Business Group) Smart Option Private Student Loan Referral Program (Sallie Mae) Bill Pay (My CU Services) Instant Issue Debit Cards (Card@Once) Surcharge Free ATM Services (CULIANCE)

VolCorp Design Web Design & Redesign Web Maintenance Web Hosting Logo Creation Newsletter Design Promotional Items Web Graphics


Address 2460 Atrium Way Nashville, TN 37214 Online volcorp.org vportfolio.volcorp.org v-portfolio.org volcorpdesign.org Numbers (615) 232-7900 (800) 470-3444 After Hours: (615) 232-7977 Operations Fax: (615) 232-7979 Extensions 1 - Member Services/Operations/Item Processing/ACH 2 - Investment Sales 3 - Marketing and Business Development 4 - Administration and President’s OďŹƒce 0 - Operator Hours Monday, Tuesday, Wednesday and Friday: 7:30 a.m. to 4:30 p.m. (Central time). Thursday: 8:30 a.m. to 4:30 p.m. (Central time). Our Member Services Department closes at 4:15 p.m. (Central time) each day. Office closings are coordinated with the Federal Reserve Bank holiday schedule.

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

Savings Federally Insured to at least $250,000. NCUA, a U.S. Government Agency.


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