Life happens one dream at a time. Good things happen at FEDERAL CREDIT UNION
Board of Directors Facilities Committee Finance Committee Member Relations Committee 1
2
President & VP s 3 What is a credit union? What purpose does a credit union serve in today s economic world? What should you expect from your credit union? These are questions that we wrestle with every day as a part of the credit union movement, and more specifically as SRP Federal Credit Union. The economic world that we live in today is often referred to as the new norm. Things are different now than five years ago. Property values have changed, regulatory requirements have changed, and people have changed. But through this your credit union has worked hard to maintain the same principles upon which it was founded over 50 years ago. People are important, people should have a choice and people deserve respect. We live in a very harsh economic world where credit unions are walking the balance between Regulator s happiness and the Member s happiness. The forgone era of understandable economic conditions is but a mere memory. As we enter 2013, things are getting better. We are becoming more acclimated to this new normal economy and we are finding new ways to serve you our membership. We are finding better ways to do old things and new ways to do previously unthinkable things. Technology is enabling us to do things quicker and more effectively than ever before. Our earnings have always been driven by the difference between interest earned on loans and interest paid on shares, but those days are long gone and not likely to return any time soon. We must look for new and inventive ways to generate revenue to continue to provide you high quality personal service. This new norm has created another new quote, we need to re-invent ourselves. A great new concept, but history has taught us another concept, never forget who you are and where you came from. As the pendulum continues to swing more changes are in store. Who knows what will come, but be certain that your credit union will remain focused on you, our member, and that focus will always be intricately woven in the fabric of decisions at SRP Federal Credit Union. Thank you for using your credit union and we look forward to serving you in the future. L to R: Ed Templeton, President; Faith Ann Borst, VP of Lending; Clifford Rushton, VP of Information Technology; Woody Shuler, VP of Finance; Steve Wilson, VP of Branches; Jean Roper, VP of Business Services; Ed Presnell, VP of Administrative Services
Supervisory Committee The Supervisory Committee represents the credit union membership. Our mission is to ensure that the credit union s operations conform to the Federal Credit Union Act and the rules and regulations of the National Credit Union Administration (NCUA). The Committee s responsibilities include ensuring all audits, account verifications, and acceptable business and accounting practices are followed. The Committee responds to all member complaints forwarded through the NCUA. We engaged Orth, Chalker, Murnane, & Co., CPAs as our external auditors this past year. Their latest findings, for the year ended March 31, 2012, reported no areas of concern with the credit union s financial reports or internal controls. The last NCUA examination was performed for the period ended December 31, 2011. From their review of financial statements, federal regulations, and internal controls, the NCUA found no material problems in any areas of the credit union s operations. Terry Meeks, Chairman Edie Corley-Stone Mark Utley The Supervisory Committee appreciates the hard work of the credit union employees in maintaining SRPFCU s clean bill of health. SRP Federal Credit Union is committed to remaining a safe, sound financial institution. 4
Treasurer s Report COMPARATIVE BALANCE SHEET ASSETS The following financial statements present the financial position of SRP Federal Credit Union as of December 31, 2012 and 2011 respectively, and the results of operations for the years then ended. December 31 2012 2011 Increase / (Decrease) $ % Cash $ 100,341,864 $ 131,062,821 $ (30,720,957) -23.44% Corporate Credit Union Investments 5,031,345 5,394,520 (363,175) -6.73% Investments 138,370,828 66,327,049 72,043,779) 108.62% Loans, Net 337,486,412 325,897,362 11,589,050) 3.56% Accrued Interest Receivable 1,108,608 1,159,690 (51,082) -4.40% P&E, Net 34,365,093 36,539,368 (2,174,275) -5.95% Share Ins Capitalization 5,705,581 5,368,752 336,829) 6.27% Other Assets 12,292,058 18,118,587 (5,826,529) -32.16% TOTAL ASSETS $ 634,701,789 $ 589,868,149 $ 44,833,640) 7.60% LIABILITIES AND EQUITY December 31 2012 2011 Increase / (Decrease) $ % Accounts Payable $ 5,703,236 $ 5,984,282 $ (281,046) -4.70% Dividends Payable 36,978 101,049 (64,071) -63.41% Share Drafts 145,447,994 133,567,572 11,880,422) 8.89% Shares 276,996,474 236,504,647 40,491,827) 17.12% Share/IRA Certificates 152,171,011 165,044,096 (12,873,085) -7.80% Regular Reserve 10,060,807 10,060,807 00000 0.00% Undivided Earnings 44,285,289 38,605,696 5,679,593) 14.71% TOTAL LIABILITIES AND EQUITY $ 634,701,789 $ 589,868,149 $ 44,833,640) 7.60% 5
COMPARATIVE INCOME STATEMENT OPERATING INCOME December 31 The following financial statements present the financial position of SRP Federal Credit Union as of December 31, 2012 and 2011 respectively, and the results of operations for the years then ended. 2012 2011 Increase / (Decrease) $ % Interest on Loans $ 19,072,697) $ 21,150,910) $ (2,078,213) -9.83% Income from Investments 949,048) 871,351) 77,697) 8.92% Earning Asset Income 20,021,745) 22,022,261) (2,000,516) -9.08% Less: Dividend/Interest Expense 2,572,801) 3,688,336) (1,115,535) -30.24% Net Interest Income 17,448,944) 18,333,925) (884,981) -4.83% Other Income 19,899,145) 17,125,300) 2,773,845) 16.20% OPERATING INCOME AFTER DIVIDENDS $ 37,348,089) $ 35,459,225) $ 1,888,864) 5.33% OPERATING EXPENSE December 31 2012 2011 Increase / (Decrease) $ % Employee Compensation & Benefits $ 14,967,248) $ 14,917,163) $ 50,085) 0.34% Occupancy & Equipment 6,260,702) 6,752,564) (491,862) -7.28% Data Processing & Professional Services 4,221,610) 4,135,598) 86,012) 2.08% NCUA Insurance and Assessments 542,030) 1,426,339) (884,309) -62.00% Marketing & Promotion 306,449) 280,444) 26,005) 9.27% Other Operating Expense 3,042,350) 3,153,618) (111,268) -3.53% Total Operating Expense 29,340,389) 30,665,726) (1,325,337) -4.32% Net Operating Income 8,007,700) 4,793,499) 3,214,201) 67.05% Less Provision for Loan and Lease Losses 2,275,107) 2,778,203) (503,096) -18.11% Non-Operating Items (53,000) (45,000) (8,000) 17.78% CHANGE TO UNDIVIDED EARNINGS $ 5,679,593) $ 1,970,296) $ 3,709,297) 188.26% 6
If you can dream it, you can do it.. - Walt Disney Good things happen at FEDERAL CREDIT UNION