Dear Members:
Happy 2014!
I am pleased to report another excellent year for the credit union from a financial performance perspective. Total assets increased by more than $15,000,000 during 2013, ending the year at $399,473,600, and net income totaled $2,300,000. Total credit union capital now stands at $39,244,200 or 9.82% of total assets, and, by the way, credit unions are considered very well capitalized at 7.0% or better. In addition to our capital reserves, we fund reserves for potential loan losses, and this account totaled $4,600,000 at the end of 2013. Bottom line, 2013 was a solid year for Hoosier Hills Credit Union.
The Credit Union is going through significant changes caused by the ways members have embraced shifts in technology and by the financial arena in general. How members access their money, apply for loans, get information on their accounts, etc. has changed dramatically over the past few years. Providing appropriate service delivery channels that meet members' needs has been, and continues to be, a key strategy for us. The historically low interest rate environment of the past 4 years continued to impact how we operate. In 2013 we had exceptional growth in our mortgage and commercial loan areas; our insurance agency more than tripled in size; and our Investment Service business (401k rollovers and investments in stocks, bonds, mutual funds and annuities) grew to more than $100,000,000 under management. In 2014 we expect continued growth with mortgages, especially second mortgages, first mortgage refinances and Home Equity Loan products since these services will be available at all of our branch locations from branch member service staff. We also anticipate a significant rebound in traditional consumer lending as loan capture programs (incenting members to move loans they have at other institutions to HHCU) are made available to the membership.
Good results come from the combined efforts of our staff, Board of Directors and Supervisory Committee members. It takes a team. Providing good advice related to financial products that work best for each member and having the products you need at a good price are what we strive to deliver everyday. Thanks for doing business with Hoosier Hills.
Before closing I want to shed a little light on a couple of recent national developments you may find interesting.
The Target Data Breach
At last count from Target, more than 70,000,000 debit and credit cards were compromised when someone broke into its system and stole information. Basically, what the perpetrators got were names, addresses, email addresses, phone numbers, and credit and debit card numbers. This has been all over the news, but you don't hear much about the rest of the story. Consumers are protected by federal law from losses incurred by electronic fraud on anything above $50.00 if they notify the institution in a timely manner. The liability for any amount above this actually falls back on the financial institution that issued the card to the individual. In Hoosier Hills' case, we had 890 cards impacted. Our response, once we received the list of members whose cards were breached, was to re-issue new cards. At this point, we estimate the Target Breach has cost the credit union $16,000. Target's inability to protect the personal information of their customers caused our members concern and time, and it cost the credit union staff time and $16,000. (In 2012 the data breach at TJ Maxx affected twice as many members as the Target data breach).
JP Morgan Chase Settlement
The other national story that deserves mention is the recent announcement that the Department of Justice settled with JP Morgan Chase for $13,000,000,000. The settlement with JP Morgan Chase ties back to the mortgage-backed securities fraud perpetrated by the bank. They committed fraud, as did many of the other large money center banks, which, it can be argued, was the root cause of the worst recession and run up of national debt that our country has ever experienced. Of the $13 billion, The National Credit Union Administration received $1.417 billion. This was for losses Corporate Credit Unions suffered because of the fraud. Federally insured natural person credit unions (Hoosier Hills, IUCU, Crane, etc. are natural person credit unions) have been paying large assessments to NCUA each year since 2008 to cover the losses suffered by the Corporate Credit Unions. Collecting on this settlement will benefit us going forward by allowing lower annual assessments.
Finally, I want to hear from you. Member feedback from previous "Cooperatively Speaking" letters have resulted in product and process adjustments for the benefit of all members. So, if you have questions and/or suggestions of how we can better serve you, please let us know by emailing us at feedback@hoosierhills.com (or simply click the "give us your feedback" button below).
Thank you,
George McNichols
President, CEO
