2015 Annual Report
Federally insured by NCUA
Purpose
Bringing Your Dreams to Reality!
Mission Statement
Southland Credit Union is dedicated to exceptional
Member service resulting in superior financial
strength, offering convenience, courtesy, and valued
solutions.
Vision
Southland Credit Union will be a dynamic,
innovative and exemplary financial institution
dedicated to meeting the needs of its Members.
Core Values
Provide exceptional service with integrity, honesty
and creativity.
Provide staff with an atmosphere of respect,
education, and career growth.
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Table of Contents
Board of Directors & Supervisory Committee............................4
Executive Team......................................................................................5
Board Chair & President’s Message................................................6
Our Community....................................................................................8
Consolidated Statements of Financial Condition.................. 10
Consolidated Statements of Income.......................................... 11
Treasurer’s Report.............................................................................. 12
Supervisory Committee Report................................................... 14
3
Leadership
Board of Directors
Walter Finnigan
Board Chair
Dolores M. Arriola
Director
Angie Avery
Secretary/Treasurer
Annie Perez
Vice Chair
Robert L. Hale
Director
Jose L. Manzano
Director
Bradley P. Silcox
Director
Supervisory Committee
Morris J. Litwack
Committee Chair
4
Thomas H. Willingham
Committee Member
G. David Mills
Director-Emeritus
Executive Team
Ferris R. Foster
President & CEO
Thomas G. Lent, CPA
Executive Vice President & CFO
Rene M. LeJay
Senior Vice President & COO
Curt A. Bannock
Vice President & CIO
Matthew P. Herrick
Vice President of Sales & Marketing
Patty Jimenez
Vice President of Lending
Cynthia E. Smolinski
Vice President of Human Resources
Bertrand Villavert
Vice President & Controller
5
Board Chair &
President’s Message
Trusted Loyalty
Southland Credit Union has been and continues to maintain a
prominent position as one of the strongest credit unions in
America. Because of your strong loyalty and support, along
with our sound lending practices, conservative financial
practices and effective resource management, we exceeded
almost every one of our financial and operational goals for the
year. We ended the year with a net income of $1.8 million while
maintaining a strong net worth
ratio of eleven percent—a
figure well above the seven
percent requirement which by
the Federal Regulators is
considered well capitalized.
Our success is in large part
because of you, our valued
Member, who continues to
inspire us to do even more
than we ever thought
possible. For example,
we funded more
than $100
million in
home
loans,
opened over 4,000 new checking accounts, added over 4,700
new Members, and paid over $1.3 million in dividends to our
Members.
Innovation and Excellence
Of all of our many accomplishments in 2015, the single most
important one of all is knowing we have earned and exceeded
your satisfaction with your Credit Union. Our most recent
survey revealed that over 97% of our Members were either
satisfied or very satisfied with the service they received from
Southland. This score places Southland solidly within the top
five percent of all credit unions in the nation. We are honored
and grateful to know we have not only earned the trust you
placed with us, but have also performed for you with such an
outstanding level of excellence.
In 2015, we introduced a new Relationship Rewards program
providing several additional benefits to our Members who
participate in multiple financial services with us. We also
completed a major, state-of-the-art upgrade to our website
and made significant investments in our eServices, bringing
solutions for your everyday financial requirements. Each of
these enhancements complement our partnership with CO-OP
Financial Services, providing you with more than 5,000 shared
branch locations and nearly 30,000 ATMs throughout the
country.
With these new enhancements, we have better positioned
ourselves to be even more competitive with other financial
institutions both in convenience and personalized service.
Our personalization coupled with our innovative solutions with
excellence allow us to respond even quicker and more
Walter Finnigan
Board Chair, Board of Directors
6
effectively to whatever your financial requirements might be.
In 2015, we provided more financial education workshops than
ever before. These workshops were conducted in response to
our Members’ requests to learn more of how to take advantage
of business opportunities in order to build financially secure
futures for themselves and their families. We also increased the
staff levels in our telephone service center to lower the call wait
times in order to exceed the level of service you expect from us.
We do not measure the value we bring to our Members
exclusively through our financial performance as an institution,
but, more importantly, it is through the value of our financial
products and services and the convenience of our delivery
systems to you. We have created a strong culture of
innovation and excellence in banking, with our staff serving as
the catalysts in assisting our Members’ to maximize their full
financial potential.
Power of Potential
Our goal is simple—we want to be the first and only financial
institution you think of and rely on for every financial milestone
in your life. We know accomplishing this is not an easy task but
we fully embrace the challenge. However, we are confident
that staying laser-focused on the intersection of strength,
potential and value to our Members will ensure our
achievement of that goal. We will continue to embrace change
through enhancing our products and delivery channels,
improving our internal processes, staying in close touch with
our Members’ financial needs and the continual delivery of
state-of-the-art solutions with the highest value to our
Members.
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Education Foundation
Title sponsor of Los Alamitos Race on the Base
Title sponsor of the Seal Beach Christmas parade
Sponsor the Los Alamitos Wings, Wheels and Rotors Expo
Sponsor of Run Seal Beach
Cypress Police Foundation
Concerts in the Park
Downey Kids Day
Walk to End Alzheimer’s
We also thank our many committed employees who provided
their time, talent and financial resources to support these
programs.
Our Future
Southland is well positioned for growth as the economic
environment continues to show
signs of steady improvement.
Our Members look for a
strong and stable credit
union to collaborate with
in the achievement of
their financial goals and
objectives. Thank you for
your continued business
and ongoing support of
your credit union.
We look forward to a
prosperous future together.
Our Communities
In addition to helping our Members achieve their potential,
Southland is also a compassionate and community-centric
Credit Union helping several communities achieve their
potential, visions and dreams. For instance, in 2015 we
participated in numerous community events, a few being:
•
Winning the King of Hearts campaign for Los Alamitos
Ferris R. Foster
President and Chief Executive Officer
7
Our Community
A strong community is made through the active participation of local businesses.
That is why Southland Credit Union is committed to supporting our local
communities.
Our Associates volunteer and support our community throughout the year with
various charities, toy drives, food drives, women and children’s causes, local school
programs, community events, and many other important community needs.
Open House, LA Federal Branch
Through helping support local non-profits, community projects and our schools,
Southland is a partner in improving the areas our Members live, work, worship and
attend school.
Southland Sponsored—Team Southland Events
January—December 2015:
Run
Seal Beach, Seal
Beach
34th Annual Race on the Base - February 28
Run Seal Beach - March 21
Southland Annual Membership Meeting - March 26
LA Federal Building Branch Open House - March 30
Downey Street Faire – April 11
Downey Kids Day – May 9
Downey Street Faire, Downey
Garden Grove Strawberry Stomp– May 23
Liver Walk – June 27
Cypress 5k and Festival – July 25
Los Alamitos School Ghoul—October 11
Seal Beach Centennial Celebration—October 24
Los Alamitos Wings Wheels & Rotors—October 25
21st Annual Santa Monica New Heroes Celebration—October 26
Walk to End Alzheimer’s—November 14
Strawberry Stomp, Garden Grove
Seal Beach Christmas Parade—December 4
Los Alamitos Winter Wonderland—December 5
Annual Membership Meeting, Ay
8
Seal Beach Christmas Parade
Cypress 5k and Festival, Cypress
yres Hotel
Proudly Serving the Employees of over 300 Companies
P R OV I DEN CE ST. JOHN’S HOSPITAL
MI LI TA RY P ERS O N N EL OF THE F ORM E R MARINE CORPS
A I R STATION E L TORO
S A N TA M O NIC A C IT Y E M PLOYE E S
R E T IR E D E M P LOYEE S OF LOS ANGE L E S COUNT Y (RE L AC )
I N T E RN AL RE V E NUE SE R V ICE
H A N S E N & A DK INS AUTO TR ANSPOR T INC .
LO S A N GE L ES COUNT Y BAR ASSOCIATION
LO S A N GE L ES PAR AL E GAL ASSOC IATION
GR E AT ER LO S A N GE L E S ASSOC IATION OF L E GAL
A DM I N I STR ATORS (GL A AL A)
LO S ANGE L E S TIM E S
LO S A N GE L ES COUNT Y SANITATION DISTRIC T
L A CO UN T Y DE PA R TM E NT OF PARKS & RE CRE ATION
L A CO UN T Y DEPAR TM E NT OF M E NTAL HE ALTH
L A CO UN T Y H O US ING AUTHORIT Y/COM M UNIT Y
DE V E LO PM E NT COM M ISSION
HYDR AF LOW USA
ROYAL PAPE R BOX CO.
H AT H AWAY- S YC AM ORE S CHIL D & FAM ILY SE R V IC E S
B I E N V E N I DO S COM M UNIT Y HE ALTH C E NTE R
L A F RE IGHTL INE R
TA RZ A N A T R E ATM E NT C E NTE R, INC
R E GA L M E DIC AL GROUP
L A KE S I DE CO M M UN I T Y HE ALTHC ARE M E DIC AL GROUP
U. S . MARSHAL L SE R V IC E S
U. S . BA N K RUP TC Y COUR T AND DISTRIC T COUR TS
U. S . DEPA R TM ENT OF HOM E L AND SE CURIT Y
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Financials
Co n so l id ated S ta temen ts of Fi na nci a l Cond i ti on
As of December 31, 2015 and 2014 (in thousands) (unaudited)
Assets
Cash and Cash Equivalents
Investment Securities:
Available-For-Sale
Other Investments
Federal Home Loan Bank Stock
Loans to Members, Net of the Allowance for Loan Losses
Accrued Interest Receivable
NCUSIF Deposit
Property and Equipment, Net
Other Assets
$
2015
69,270
$
74,068
14,665
2,191
379,874
1,374
4,899
11,386
21,500
2014
42,138
65,349
29,745
2,176
389,873
1,428
4,917
12,214
20,091
TOTAL ASSETS
$
579,227
$
567,931
Liabilities
Members’ Shares and Savings Accounts
Accounts Payable and Other Liabilities
$
508,726
7,055
$
499,727
6,461
TOTAL LIABILITIES
Members’ Equity
Regular Reserve
Undivided Earnings
Equity Acquired in Merger
Accumulated Other Comprehensive Income
TOTAL MEMBERS’ EQUITY
TOTAL LIABILITIES AND MEMBERS’ EQUITY
10
$
515,781
506,188
12,887
43,946
7,221
(608)
12,887
42,158
7,221
(523)
63,446
61,743
579,227
$
567,931
Consolidated S ta tem en ts of I ncome
For the years ended December 31, 2015 and 2014 (in thousands) (unaudited)
Interest Income
Loans to Members
Investment Securities and Cash Equivalents
Total Interest Income
2015
18,638
1,326
19,964
$
2014
16,436
1,087
17,523
$
Interest Expense
Members’ Shares and Savings Accounts
Net Interest Income
1,301
18,663
1,489
16,034
Provision for Loan Losses
Net Interest Income After Provision for Loan Losses
952
17,711
774
15,260
Non-Interest Income
Fees and Charges
Other Non-Interest Income
Other Non-Interest Gains
Total Non-Interest Income
Income Before Non-Interest Expense
5,128
2,131
54
7,313
25,024
4,299
1,748
508
6,555
21,815
Non-Interest Expense
Compensation and Benefits
Operations
Occupancy
Total Non-Interest Expense
12,048
8,202
2,986
23,236
10,514
7,085
2,566
20,165
NET INCOME
$
1,788
$
1,650
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Report
Treasurer’s Report
Your volunteer Board of Directors and Supervisory Committee Members work diligently to
ensure the continued safety and soundness of the Credit Union and we thank you for your
membership. In 2015, Southland built upon its solid foundation of financial strength by focusing
on its core values as well as identifying and acting upon opportunities to improve Member
service.
Total assets increased $11.3 million this year and are now $579 million, a new all-time high. At
the same time, the Net Worth Ratio improved to 11.05%, which is significantly higher than the
7% regulatory minimum to be considered “well-capitalized.”
Net loan balances decreased $10 million to $380 million while Member deposits
increased $9 million to $509 million. Although net loan balances decreased, 7,900
loans were funded in 2015 totaling more than $180 million. The net loan decline
is due to the fact that a majority of fixed-rate mortgage loans continue to be sold
on the secondary market by the Credit Union to reduce the exposure to any
interest rate risk in the event interest rates increase. These sold loans continue
to be serviced by the Credit Union and total another $169 million, bringing total
loans serviced to $549 million.
Net income for 2015 was nearly $1.8 million, an improvement of 8% over
2014. We also returned $1.3 million in dividends and interest to our Members.
Southland Credit Union is in excellent financial condition, and is poised
for continued success and future growth. We thank you for allowing us to
serve you and look forward to an exciting and innovative 2016. You can be
proud of the many accomplishments attained in the past years while being
assured the future of Southland Credit Union is looking brighter.
Sincerely,
Angie Avery
Secretary/Treasurer
Board of Directors
12
$154,855 $124,275
$109,995
$102,771
$9,521
$7,311
13
Report
Supervisory
Committee Report
The Supervisory Committee is comprised of three volunteers who are elected
by the membership. The Committee is primarily responsible for assisting the
Southland Board of Directors in fulfilling its oversight responsibility of providing
an independent appraisal of the safety and soundness of the operations and
activities of the Credit Union.
In carrying out this responsibility, the Committee meets with the federal
and state regulatory agencies during their routine examinations, and
engages and oversees the internal and external audits and verification
of accounts performed by two nationally recognized CPA firms.
The Independent Auditor’s Report as of and for the years ended
December 31, 2015 and 2014 indicated that the Credit Union’s
financial statements are fairly stated in accordance with generally
accepted accounting principles. It is the opinion of the
Supervisory Committee that your Credit Union is financially
strong, complies with sound business practices, and has
effective internal controls to adequately protect and safeguard
the Members’ assets.
Sincerely,
Morris J. Litwack
Committee Chair
Supervisory Committee
14
$154,237 $122,289
$53,726
$28,953
$10,279
$8,405
$3,201
$2,564
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BRANCHES
DOWNEY
8545 Florence Ave.
Downey, CA 90240
LOS ANGELES
200 S. Spring St.
Los Angeles, CA 90012
GARDEN GROVE
12860 Euclid St.
Garden Grove, CA 92840
LOS ANGELES
(Federal Building)
300 N. Los Angeles St.
Los Angeles, CA 90012
LOS ALAMITOS
(Corporate Office)
10701 Los Alamitos Blvd.
Los Alamitos, CA 90720
SANTA MONICA
(St. John’s Branch)
2020 Santa Monica Blvd.
Koll Building—Third Floor
Santa Monica, CA 90404
SANTA MONICA
525 Santa Monica Blvd.
Santa Monica, CA 90401
SHARED BRANCHING
Access to over 5,000 shared branch locations Nationwide.
ATMs
30,000 Surcharge-FREE ATMs Nationwide,
that’s more FREE ATMs than the largest banking network.
To find a Shared Branch or ATM near you, visit www.SouthlandCU.org
P.O. Box 3003
Los Alamitos, CA 90720-1303
www.SouthlandCU.org • 800.426.1917