TRANSFORMING
2015 Annual Report
Transforming your dollars into more
for our Community
for our Members
for our Staff
Our new vision statement
A Vision Statement is an inspiring, clear, and concise statement that reveals the character, beliefs, and core of an
organization. It contains the aspirations of internal stakeholders and the hope of those who use the organization
towards its purpose. Our new Vision Statement accomplishes this and more, as it is an enduring message that reflects
the will of our employees, volunteers, and members.
Transforming
generations and communities.
e!
m
ak
e
Throughout this Annual Report, you will see examples of CFCU working towards
this Vision. Thank you for inspiring us to become more than just a financial
institution.
M
Transformations occur when a child takes his first steps, a student gets accepted into
college, a young couple gets married, an entrepreneur opens her first business, or a
co-worker retires after years on the job. At CFCU, we believe in helping these (and
many, many more) transformations happen.
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Simply. Personally.
1
1. Fold the dollar bill in half and then unfold.
Learn the meaning behind each word of our new
Vision Statement as you follow these origami instructions:
“Transforming”
We will change people’s lives for the better.
President’s Report
2015 was a busy and exciting year at CFCU Community Credit Union. We completed numerous strategic projects, met all financial goals, and continued
to provide exceptional member service. Through all our efforts, we kept in mind our new Vision Statement: “Transforming generations and
communities. Simply. Personally.”
Transforming…
The member experience was transformed in 2015 through initiatives such as Instant Issue Cards, e-signature
capabilities, online account opening, and financial counseling. A new Intranet portal has transformed the
employee experience by improving the way employees receive information, search for resources, and communicate
with one another, all leading to enhanced service to our members!
generations…
Lisa Whitaker
President & CEO
We established new partnerships with SUNY Cortland and Borg Warner in 2015, enabling CFCU employees to interact with
and provide education to a broader section of our community. In addition, we awarded over $40,000 in scholarships and
community service awards to students representing 12 area high schools.
and communities.
In 2015, CFCU provided financial support to over 75 not-for-profit organizations and employees gave almost 2,400 hours volunteering throughout our communities.
Simply.
As a member-owned, community-based financial institution, we do everything with your best interests in mind. Our core focus is on helping our members
and our communities succeed.
Personally.
CFCU is proud of the personal service we deliver to members. In 2015, we created new positions in Human Resources, Business Lending, Branch
Operations, and Mortgage Underwriting to provide additional resources for employees, leading to even more individualized support for members.
CFCU is a transformative organization in our community. We look forward to serving you and your family for generations to come. Thank you for your membership and support.
Sincerely,
2
2. Now fold the top left-hand and right-hand corners to the center crease, creating a triangle.
“Generations”
Indicates the depth of our commitment to our communities and to our members.
Both will feel the positive impact of our actions and aspirations.
transforming our members
mb
er
s
95
me
CU
,2
CF
-Maria Guiles
CFCU Member
of
The whole process was surprisingly quick and
simple, with CFCU running like a well-oiled machine!
The clear communication and personal care that I was
given was excellent. Exactly 31 days after this all began,
I was paying a much lower interest rate on my mortgage,
and was beginning to pay off my other bills with the
money I saved on my lower monthly payment.
Being in the insurance industry I hear
on a daily basis about how long, drawn
out and stressful refinance is, and how my
clients will never ever think of doing it again.
I just smile and say… If you have
a credit union like I do, you’d do it
several times over!” #
You can bet I’m thankful I did!
So thanks again to CFCU for the help and
saving me well over $38,000.00 in interest
alone! All in all you guys are the
most enjoyable and professional
people I have ever had the
pleasure of doing business with.
66
“CFCU Community Credit Union has completely
transformed my perception of financial
institutions. When I was first reached out
to by CFCU about refinancing my home,
I was very skeptical for sure. Much of
that skepticism came from frustrating
experiences with my local bank; I tried
not once or twice, but four times to
talk to someone about my mortgage and
was never given the time of day, much less
the courtesy of a call back from the numerous
messages I had left. So, with this negative experience
in mind, I decided to give it one last skeptical shot.
3
3. Flip over. Fold the two sides so that they meet in the center.
Then pull the flaps from behind to form two triangles.
“AND”
Small but important word. Inclusive.
Board of Directors Report
These are exciting times for the CFCU Community Credit Union. We are experiencing tremendous growth across the entire list
of products available to our members. We have seen fantastic increases in shares, auto loans, mortgages and many more areas
that are important for members. This happens because we have members confident in CFCU.
Brian Mitteer
Chair
We have an outstanding team of leaders throughout the organization. The best interest of our members is the forefront of
decisions by the Board of Directors, Executive Officers, Vice Presidents and every staff member. They follow a well-planned
creative strategic plan, budget and comprehensive policies that provide direction at all levels. This, in turn, leads to actions
that are beneficial to members as demonstrated in the many products.
We look forward to the future
of the organization. That
future involves expanded
products, services and
opportunities. The Board of
Directors looks forward to
continuing its responsibility
to you as members to make
this the best credit union
and financial institution. We
appreciate your input and
ideas. We especially look
forward to working with
the management team to
accomplish our lofty goals.
Robert A. Cree
Vice Chair
Joseph H. During
Treasurer
Skip Hewitt
Secretary
Dana Decker
Katie Foley
Amy Wood Gonzalez
James W. Place
Lisa Whitaker
Sincerely,
4
4. Flip the bill back over.
to match where the two
Fold the top of the bill down
flaps meet at the bottom.
“Communities”
Depending on your point of view, a community can be large or small. We view it as an extension of
our families. We will have an impact wherever our members and employees experience community.
TRANSFORMING Our Community
50
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Ca d t
rin o th
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In exchange for a donation of a non-perishable food item, concertgoers were entered to win an electric guitar signed by all
of the bands who played throughout the summer. We had a number of community members who donated at every concert!
U
The United Way Raffle!
2,
- The United Way of Tompkins County
Community Partner
0
“CFCU has been a longtime community supporter through its partnership with United Way of Tompkins County. As
a Corporate Cornerstone Partner, CFCU provides leadership and funding for United Way’s operating expenses by
ensuring that 100% of all gifts
made by CFCU employees
THE CFCU DOWNTOWN SUMMER CONCERT SERIES
and other donors go directly
Concertgoers were able to experience community on a whole new
to the programs and services
level together. Partnering with the Downtown Ithaca Alliance and the
that need them most. CFCU
United Way of Tompkins County, CFCU was able to give our
staff also play an important
community the opportunity to experience charity, music, and shared
role as volunteers with
interests in an iconic local atmosphere on the Ithaca Commons.
United Way, utilizing their
collective knowledge to assist
United Way’s administration through service on the Board of Directors, campaign and community
investment committees. CFCU’s support of the United Way’s mission begins
with organizational and board policy development and moves through
resources raised, managed and reinvested in the community.”
5
5. Next, fold the top up so that the crease matches the fold line underneath.
“Simply”
Banking and personal finance are complicated. Caring is not. We strive to know our members
on a more intimate level, giving us the ability to provide you with the knowledge you need…
cutting through the clutter.
SUpervisory Committee Report
The role of the Supervisory Committee is to verify that adequate internal controls are in place to safeguard member assets, monitor compliance with applicable laws and regulations and ensure the fiscal
integrity of CFCU. An internal audit staff fulfills these responsibilities and reports to the Supervisory Committee. In addition, the Committee engages independent auditors to perform an annual audit of CFCU.
The Supervisory Committee meets quarterly to review the work of the internal audit staff. Zenaida Choy prepares an annual audit plan at the start of each year that is approved
by the Committee. Comprehensive reports are prepared for each audit conducted, as well as a quarterly summary report. Written responses addressing any audit findings are
subsequently provided by the responsible party for each internal audit conducted. At the end of 2015, there were only five audit findings from audits completed in November
and December that were pending resolution. All audit findings reported from performed internal and external audits during 2015 were closed-implemented or a resolution were
in progress at the end of 2015.
The 2015 internal audit plan included 60 audits – 29 of which were outsourced, and 31 performed by internal audit staff. Of the 60 audits in the 2015 audit plan, 55 were
completed and five were in process or carried over to the 2016 audit plan. The in process and carried over audits are all outsourced audits. Outsourcing certain audits has been
recommended by the New York State Department of Financial Services and NCUA regulatory examiners. The practice of alternating audits from internal to external provides
an increased level of quality control, provides for opportunity for industry standards to be included in future audits, and validates internal auditing practices and procedures.
External audit firms are carefully selected to ensure the highest possible expertise on the auditable entity.
Blixy Taetzsch
Chair
During 2015, the internal audit department successfully implemented new audit software (TeamMate) that has allowed for greater efficiency in the internal audit department,
including electronic workpapers and documentation. The Supervisory Committee was highly satisfied with the completion rate of the internal audit plan, the responsiveness to
new audit requirements, as well as management’s timely response to any audit findings. Our 2016 audit plan
currently includes 43 audits, with 18 outsourced (including the five carried over from 2015). Our goal is to
avoid the practice of carrying over planned and unplanned audits from year to year.
The Supervisory Committee is proud to report that our independent audit firm, CliftonLarsonAllen, has issued an unmodified (clean) opinion
report on CFCU’s consolidated financial statements as of, and for the years ended, December 31, 2015 and 2014. The full report is available
at the CFCU’s offices for inspection. As in previous years, members of the Supervisory Committee met with our independent auditors and the
New York State and NCUA regulatory examiners in 2015. Again, findings were minimal and management was quick to address and resolve
any issues or concerns. Based on the examiners’ reports, internal audit reports, and the positive results received from our independent auditors,
the Supervisory Committee remains confident that CFCU maintains adequate controls, complies with applicable laws and regulations, and is
well managed and fiscally sound.
I would also like to remind members that the CFCU code of ethics requires that any member who suspects there has been a violation of
Corporate Policy, laws or regulations, or general business ethics should report their suspicion. You may contact the Supervisory Committee in
writing or by email. All mail is strictly confidential. You do not have to identify yourself, but it is important that you provide enough information
and/or documentation to allow the Committee to investigate your concern. For further information, please go to Supervisory Committee
information on the CFCU website at www.mycfcu.com/about.
Many thanks go to our internal auditors, Zenaida Choy, Julie Burnham, and Kim VanDonsel for their outstanding work. The requirements
for internal audit become more demanding every year. The Supervisory Committee is grateful to have such dedicated, competent people
working with us. Thanks to the management of CFCU for responding promptly to our many questions and functioning in such a responsible,
knowledgeable manner.
Sincerely,
Dan Brown
Secretary
Susan T. Schattschneider
Internal Audit Staff:
Zenaida Choy, Assistant Vice President of Internal Audit
Julie Burnham, Internal Auditor
Kim VanDonsel, Junior Auditor
Independent Audit Firm:
CliftonLarsonAllen, LLP
6
6. Flip the bill over. Tuck the middle of
crease, creating a smaller lower the left wing under itself to form a
wing. Repeat on the right side.
“Personally”
We are not a bank. We are a credit union. At our core is a passion
to help members. If we can positively impact you as an individual, which impacts
your family and your community, then we have accomplished our goal.
crease
Transforming our staff
“Working at CFCU has transformed my life for the better. Before I started working here two years ago my days were spent
wearing Birkenstocks, covered in dirt, planting flowers, living paycheck to paycheck. But as much as I felt comfortable in that
environment, once I had my son, it was no longer a sustainable way to support my family. When I started off as a teller I lacked
confidence, felt socially awkward and out of place, so at first I couldn’t believe when members and colleagues alike would trust me to
help them. When I was offered the opportunity to work in the administrative offices in the Asset Recovery Department, I almost turned
down the position because I didn’t think that I could work in an office setting. I was afraid that I would be too anxious and didn’t know
how I should act; what if I said the wrong thing? what if I laughed too loudly? Fortunately I ventured beyond my comfort zone and
took a chance, because I couldn’t be happier with my job. I have gained confidence, conversation skills, knowledge, and a sense of
professionalism.
I feel like I have grown up with CFCU.
CFCU changed my life because they took a chance; every single person from day one has had faith in me. The team at CFCU is
unique, we all work together to never put down a fellow employee but only to pick them up. I have had some pretty life changing
events in the past two years, from my grandmother passing, to my best friend passing, a difficult pregnancy, to the birth of my
beautiful Ozzie Mae. Throughout it all, the love and support from my CFCU family kept me afloat… the cards
from Lisa and HR are still on my desk, just to remind me that I am not just a number and they honestly care.
I no longer consider this my job, this is my career and there wouldn’t be a better place I’d rather call
my home away from home. And even though some days it still surprises me to see business cards with
my name on them on my desk, I know that I have come a long way and look forward to further
developing myself and my career with the help of CFCU.”
27
I had my second child this past year, and while there was a part of me that thought about staying home with her indefinitely, I knew that I
needed to come back, because my priorities have changed from just my family, to bettering myself and the lives of the members that I help
every day as well. My job has given me purpose beyond myself.
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Kaelee and Family
Developing my career at CFCU has offered me stability. I no longer have to worry about covering the basics for my family like health
insurance and car payments. Now I get to help members who are on the edge, who are where I used to be. I always say “I want to
keep your car in your driveway,” because I can relate to members who have fallen on hard times because I’ve been there. I remember
having to choose between rent or my car payment or birthday presents for my kid. Now I am happy to have the opportunity to help our
members who are in that situation now.
#
of
CF
-Kaelee Rydzik
CFCU employee and member
7
7. Pinch wings together to create the “body”of the butterfly.
Treasurer’s Report
As I prepared this report, I could not help but reflect on the significant accomplishments and growth of our Credit Union over
the past several years. That growth is a direct result of the efforts put forth by the Senior Management and staff of your Credit
Union. Their knowledge and dedication has helped us achieve levels of customer service and profitability that bring value to
you, our members, and stability to the Credit Union, as a whole.
Joseph H. During
Treasurer
2015 was another profitable year for the Credit Union. While it did not set a record for annual earnings, the 2015 results were
well within our budget forecasts and management’s long-range plans. We continue to be a leader in most areas of lending
in our communities and our investment in technology and personnel, while significant, has provided our members with high
quality service and, at the same time, utilize the latest advancements in technology. We are constantly looking at new ways to
provide our services in this technology driven world. Our focus is to provide the best services to you, our members, at a
reasonable cost to the Credit Union.
Our annual financial audit, which was conducted by our independent certified
public accountants, resulted in an unmodified opinion. This is a testimony to the
hard work and dedication of our Board of Directors, the Senior
Management team and all the employees of the Credit Union.
I am pleased to tell you the CFCU Community Credit
Union is financially sound and well-positioned to
provide our members with high quality products and
services. It is my privilege to serve as the Treasurer of
the Credit Union. Thank you for your confidence and support
of the undertakings we embark upon.
Respectfully submitted,
6
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8
8. Fold the two sides in half from behind.
Financial Report
CFCU COMMUNITY CREDIT UNION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
DECEMBER 31, 2015 AND 2014
ASSETS
2015
2014
Cash and Cash Equivalents
$182,699,034
$138,808,787
Deposits in Other Financial Institutions
250,000
Securities - Available-for-Sale
107,553,659
150,700,592
Other Investments
2,350,896
2,319,495
Loans Held-for-Sale
1,258,025
Loans, Net
658,765,891
597,650,246
Accrued Interest Receivable
2,356,234
2,206,038
Premises and Equipment, Net
9,488,326
8,289,859
NCUSIF Deposit
7,433,841
7,196,017
Other Assets
2,215,341
1,878,990
TOTAL ASSETS
LIABILITIES AND MEMBERS’ EQUITY
LIABILITIES
Members’ Share and Savings Accounts
Accrued Expenses and Other Liabilities
TOTAL LIABILITIES
MEMBERS’ EQUITY
Regular Reserves
Undivided Earnings
Accumulated Other Comprehensive Income (Loss)
TOTAL MEMBERS’ EQUITY
TOTAL LIABILITIES AND MEMBERS’ EQUITY
$974,371,247
$909,050,024
$843,820,404
4,462,726
$786,494,685
3,387,833
848,283,130
789,882,518
15,582,928
110,602,400
(97,211)
126,088,117
15,582,928
103,285,734
298,844
119,167,506
$974,371,247
$909,050,024
CFCU COMMUNITY CREDIT UNION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 2015 AND 2014
INTEREST INCOME
Loans
Securities, Interest Bearing Deposits and Cash Equivalents
TOTAL INTEREST INCOME
2015
$27,067,198
2,113,188
29,180,386
2014
$24,349,340
2,363,570
26,712,910
3,322,528
25,857,858
3,399,615
23,313,295
2,673,094
921,671
23,184,764
22,391,624
NON-INTEREST INCOME
Service Charges and Fees
Other Non-Interest Income
Net Gain on Sale of Loans
Net Gain on Sale of Securities
TOTAL NON-INTEREST INCOME
8,060,111
1,131,711
165,640
150,749
9,508,211
7,166,283
1,066,136
51,250
3,432
8,287,101
NON-INTEREST EXPENSE
General and Administrative:
Employee Compensation and Benefits
Office Occupancy and Operations
Other Operating Expenses
Net Loss on Sale of Assets
TOTAL NON-INTEREST EXPENSE
12,879,924
7,654,904
4,802,411
39,070
25,376,309
11,036,638
7,027,407
4,137,093
55,304
22,256,442
NET INCOME
$7,316,666
$8,422,283
INTEREST EXPENSE
Members’ Share and Savings Accounts
NET INTEREST INCOME
PROVISION FOR LOAN LOSSES
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES
The condensed consolidated financial statements presented herein do not constitute a complete set. The complete set, including the consolidated statements of
comprehensive income, changes to members’ equity and cash flows and notes to the consolidated financial statements, is available in the Credit Union’s administrative office.
9
9. Then fold them back out again at the wings to give your butterfly a 3-D shape.
Strategic Report
Strategic Planning is the process of developing a
long-range plan for the direction and goals of an
organization. The CFCU Strategic Plan includes
10 Strategic Goals that provide a roadmap
for the continued success of the Credit
Union. We ensure any new initiatives
meet objectives toward one or more of
these Goals, and make all decisions with
the Strategic Goals in mind.
10 Strategic
Goals
Board Development
Deepen Member Relations and Cross Sell
Embrace Technology
Emphasis on Community Involvement
One of these Goals is to revise our Vision
Statement and Mission Statement, and to
develop a set of Values. As noted earlier
in this Report, a Vision Statement
should be inspirational, clear, and
concise, with a long-term view of why
CFCU exists. A Mission Statement is
a more grounded statement that clarifies
what makes CFCU unique and answers the
questions of “What do we do?”; “How do we
do it?”; and “For whom?” Values are shared
beliefs among stakeholders in an organization
which help shape actions and establish priorities.
Developing these statements is a complex
process, as we want to ensure that they
Employee Engagement
Establish Vision, Mission, Values
are sustainable over many years and
incorporate perspectives of employees,
volunteers, members, and the community at
large. The process began in late 2014 with
a Vision Statement brainstorming session
among CFCU supervisors and project
managers. Various potential statements
were discussed over the course of
several meetings, and the final version
was approved by the Board of Directors
and presented at the introduction to this
Report:
Facilities Master Planning
Maintain Financial Health
Market Expansion and Retention
Organizational Effectiveness & Efficiency
Approved by Board of Directors
in alphabetical order
Transforming
generations and communities.
Simply. Personally.
Our next steps are to revise our
Mission Statement and develop a set of
Values. We will provide ways for members
to be involved in this process and look
forward to hearing your ideas. Thank you
for providing the opportunity to transform
your experience with a financial institution!
10
10. Congratulations! You have transformed an ordinary dollar
bill into more, which is what we strive towards every day.
CFCU Vice Presidents
Jennifer Carlton-Cooper
VP Technology
Paul Cognetta
VP Human Resources
Eileen Covey
VP Electronic Services
Michael D’Angelo
VP Member Experience
Jeff Dobbin
VP Business Lending
Mark Hillegas
VP Consumer Lending
Eliza Mulhern
VP Compliance &
Associate General Counsel
Jim Struble
VP Sales and Service
Sarah Tomei
VP Finance & Controller
Christine Werner
VP Mortgage Operations
CFCU Executive Team
Paul Kirk
Chief Financial Officer
Cathy Benson
Chief Lending Officer
Beth Putnam
Chief Retail Officer
Rebecca Roberts
Principal of Strategic Initiatives
Mallorie David
Executive Assistant
William Crane
Chief Administration Officer
General Counsel
Loo
king
forw
20
16
ard
to
Lisa Whitaker
President & CEO
Make this scene yourself! Visit mycfcu.com/transform for instructions.