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2011 Annual Report - OE Federal Credit Union


									2011 Annual Report
                              Mission Statement
            “To build lifelong financial partnerships with our union members
and their families through affordable financial products and exceptional personal service,
                      while assuring our long-term financial strength.”
Executive Team     Mike Donohue, Chief Executive Officer
                   Jeff Hampton, Executive Vice President
                   Cyndi Guerzon, SVP Lending
                   Ronald Poff, SVP Business Development
                   Leslie Ramirez, VP Organizational Development
                   Mike Miller, VP Information Technology

Credit Committee   Manuel Ramirez
                   Caan Nguyen
                   Kim Sandelin
                   Judy Allen                                      1
                   Dana Mierkey
                   Kathy Rasmussen
    Board of Directors   Russ Burns, Chairman
                         Fred Herschbach, Vice Chairman
                         James Sullivan, Secretary/Financial Officer
                         Carl Goff
                         Dan Reding
                         Pete Figueiredo

                         Bradley Parres                                Stanley Green
                         Mark Fitzgerald                               Jim Graham
                         James Spain                                   Larry Watson
                         Andrew Lagosh                                 Phillip Herring
                         Dennis Dorton                                 Glenn Smith
                         Michael Johnson                               Michael Brandt III
                         Ronald “Gus” McClain
                         Luther Slack

    Committee            Mariano Gonzalez, Chairman
                         Steve Bentivoglio, Secretary
                         Ken Oku
CEO’s Message   In January of 2011, I had the privilege of       regulator, the National Credit Union
                succeeding Leon Lanfri (retired) as President/   Administration (NCUA), reported that
                CEO of Operating Engineers Federal Credit        OEFCU continues to be one of the strongest
                Union (OEFCU). It is truly an honor to lead a    capitalized credit unions in the country and
                credit union with a unique history of serving    awarded us our best annual exam results in
                labor union groups and their membership.         several years. We continue to position our
                Our organization has certainly grown since       credit union for ongoing success; for example,
                its inception in 1964, yet we continue to be     in response to a member survey, we recently
                defined by our mission to help hard-working      introduced a mobile-banking suite of services
                union members and their families attain          and an electronic signature feature that
                their financial goals. This commitment is        put greater convenience at our members’
                best expressed in our Mission Statement:         fingertips. These mobile services complement
                                                                 the traditional, one-on-one member service
                OEFCU exists…
                                                                 that will always be at our core.                 3
                   To build lifelong financial partnerships
                                                                 As a thank-you to our loyal members,
                   with our union members and their
                                                                 OEFCU and the Board of Directors posted
                   families through affordable financial
                                                                 a “loyalty dividend” to member accounts.
                   products and exceptional personal
                                                                 The dividend, based on 1% of interest paid
                   service, while assuring our long-term
                                                                 on applicable loans in 2011, was paid at the
                   financial strength.
                                                                 end of 2011. OEFCU has always been member-
                Throughout OEFCU’s history, we have              owned and member-driven, and by keeping
                persevered through challenging economic          our members’ interests at the forefront of all
                times to maintain this financial strength,       we do, we will remain strong through the
                and 2011 has been no exception. Our federal      changes and challenges to come.

                                                                 Mike Donohue
    Message      Even in a slow-growing economy, your credit         Additionally, it is a privilege for OEFCU
                 union found ways in 2011 to return value back       management and staff to serve you. They
                 to you, our members. We achieved this as our        are prepared to be your guide, no matter
                 financial position continued to strengthen, which   what your situation entails.
                 allows us to stay competitive as we keep looking
                                                                     Your financial well-being remains our utmost
                 for ways to grow our relationship with you.
                                                                     priority as we plan for the challenges and
                 OEFCU’s goal remains steadfast: providing you       opportunities of 2012. The accomplishments
                 with the tools needed to prosper. Members           your credit union reached over the past year
                 are taking advantage of favorable rates on a        helped us secure an even healthier future,
                 wide variety of loans and savings accounts, not     which we always try to share with you through
                 to mention other products created for their         better rates. Bank Transfer Day (Nov. 5, 2011)
                 financial success. In 2011 we introduced our        spotlighted credit unions as trusted financial
                 MEMBERS Auto and Homeowners Insurance               institutions to do business with as the
                 Program to provide the quality protection           movement swept our nation. Many consumers
                 you deserve while minimizing your cost.             discovered the value of financial cooperation
                 It’s another premier option to accommodate          as they moved $4.5 billion from their for-profit
                 your needs in addition to our Mechanical            banks into not-for-profit credit unions and
                 Breakdown, Term Life, Debt Protection,              discovered the same cooperative principles
                 and other enhanced insurance offerings.             that have guided OEFCU from its beginnings.

                 Your credit union’s board is honored to serve       With the economy showing some noticeable
                 you and grateful for the confidence you place       improvement and your continued loyalty, OEFCU
                    in us. While we are always considering how       remains safe, secure, and positioned for success.
                      to provide the best service and products,
                       it’s your commitment to this cooperative
                                                                     Russ Burns
                        institution that encourages us to aim
                              even higher.

                  CheCking ACCounts
Financial Officer
Report              As we closed the door on 2011, your credit           to provide excellent service. They understand
                    union’s cautious management of loans,                our members’ individual situations and are
                    deposits, and expenses ensured we ended              committed to helping resolve the challenges
                    on a firm foundation. OEFCU remains                  you face. OEFCU is dedicated to walking
                    financially sound and prepared to meet               members through this challenging economic
                    your needs as it looks toward the future.            period, leading them to successful results.

                    Member loan originations rose 5 percent to           As the economy improves, your credit union
                    more than $128 million in 2011, which means          is optimistic about your future. We are here
                    your credit union has loaned more than               to serve, here to stay, and remain true to the
                    $3.44 billion since its founding in 1964.            reason we were created: to help you thrive.
                    There were 74,640 member accounts as                 Our sole mission is your financial progress,
                    of Dec. 31, and total deposits grew almost           and we anticipate fulfilling this for many years
                    3 percent to $661.95 million. We were pleased        to come. In fact, we are hopeful 2012 will be a
                    to pay out $5.85 million in dividends, and we        positive year for many of you. Thank you for
                    reported $5.38 million in earnings for the year,     your unwavering involvement in OEFCU—
                    a nearly 25 percent increase compared to             we couldn’t do it without your support.
                    the year prior. OEFCU’s success is due to our
                    devoted members who continue making this
                                                                         James Sullivan
                    institution their financial destination for loans,
                                                                         Secretary/Financial Officer
                    savings accounts, and insurance products.

                    We also want to thank our experienced
                    management and staff who continue

                                       MortgAge LoAns
    Committee     On behalf of the Supervisory Committee,            The National Credit Union Administration
                  I am pleased to report that your credit union      (NCUA), the agency that oversees the
                  has operated in a safe and responsible             financial strength of credit unions, conducted
                  manner. The Supervisory Committee is a             a review in March 2011, also with excellent
                  dedicated group of volunteers who play an          results. In fact, OEFCU not only meets
                  important role at OEFCU; we are appointed by       the NCUA’s requirements but goes above
                  the Board of Directors to monitor operations,      and beyond those requirements in many
                  ensuring compliance with federal regulatory        instances. With these results, you can rest
                  requirements and internal policies and             assured that OEFCU will handle your financial
                  procedures. It’s our duty to work continuously     needs safely and securely.
                  with the external auditors and regulatory
                                                                     The Supervisory Committee thanks the
                  examiners to ensure compliance with the
                                                                     Board of Directors, the management, and
                  Federal Credit Union Act, the rules and
                                                                     the staff of OEFCU for their continued support
6                 regulations of the National Credit Union
                                                                     of our mission to maintain fiscal soundness.
                  Administration (NCUA), and our bylaws.
                                                                     It is our pleasure to serve you and your fellow
                  The credit union’s 2011 financial records          OEFCU members.
                  were reviewed by Turner, Warren, Hwang &
                  Conrad, AC, Certified Public Accountants &
                                                                     Mariano Gonzalez
                       Consultants and received an excellent
                                                                     Chairman, Supervisory Committee
                              audit, determining that the books
                                and records accurately reflect the
                                    healthy financial condition
                                     of the credit union and
                                      are in accordance with
                                     generally accepted
                                  accounting principles.

                   Auto LoAns
                                                                   2011              2010
                       Loans to Members                         $350,708,219      $373,153,245
                       Allowance for Loan Losses                $(16,726,444)     $(19,804,717)
Financial Statements   Investments:                             $375,651,406     $326,284,803

as of December 31
                       Cash:                                      $36,350,511      $41,080,729
                       Land & Building:                          $20,892,983        $21,250,372
                       Furniture & Equipment:                       $446,274         $246,465
                       Other Assets:                              $10,519,081       $12,122,126

                       Total Assets:                          $777,842,030      $754,333,022

                       Liabilities & Capital
                       Share Accounts:                          $661,950,284     $644,165,499
                       Borrowings                                 $13,248,217      $10,775,378
                       Accts Payable/Other Liabilities:           $4,857,464        $6,366,133

                        Regular Reserve:                          $18,030,137      $18,030,137
                        Undivided Earnings:                       $82,741,760      $77,358,815
                        Accum. Gain/Loss on Investments:         $(2,985,832)     $(2,362,939)
                        Unrealized Gain/Loss on RE Sales:                  $-               $-

                       Total Liabilities & Capital:           $777,842,030      $754,333,022

                       Income & Expense
                        Income from Loans:                       $23,178,665      $26,677,036     7
                        Income from Investments:                   $7,149,191      $7,641,222
                        Other Income:                              $5,421,117      $5,472,515

                       Total Income:                           $35,748,973       $39,790,773

                       Employee Compensation/Benefits:            $10,776,341     $10,924,244
                       Member Insurance:                            $999,344        $1,967,667
                       Loan Servicing Expense:                      $482,591         $598,536
                       Educ. And Promotional Expense:               $295,602           $217,521
                       Office Occupancy Expense:                   $1,585,550       $1,661,578
                       Office Operations Expense:                  $4,131,691      $4,080,416
                       Proffesional & Outside Services:              $456,515         $527,653
                       Provision for Investment Loss:                      $-                $-
                       Provision for Loan Losses:                  $5,335,626      $6,662,035
                       Interest on Borrowed Money:                  $208,785         $409,633
                       Misc Operating Expense:                      $362,448         $470,494

                       Total Operating Expense:               $24,634,492        $27,519,776

                       Net Gain Before Dividends:              $11,114,480      $12,270,997
                       Dividends:                                $(5,847,781)     $(7,626,961)
                       Non-Operating Inc (Exp):                     $116,245       $(329,801)

                       Net to Reserve & Undivided Earnings:     $5,382,945        $4,314,235
                                                                           2011                2010
                           Financial Highlights
                           Earnings Paid to Members since 1964:         $406,740,254        $400,892,473

    Financial Statements   Earnings Paid to Members:                       $5,847,781         $7,626,961

    as of December 31
                           Number of Loans since 1964:                       281,230             276,792

    continued              Loan Amount since 1964:                     $3,438,825,140      $3,310,770,367

                           Number of Member Accounts:                         74,640               77,210

                           Avg. Savings Balance:                               $8,176             $7,752

                           Avg. Loan Balance:                                $13,259             $13,485

                           Distribution of Loans, Income & Growth

                           Number of Loans Granted:                           4,438               4,183
                           Amount of Loans Granted:                   $128,054,773        $121,907,992

                           Employee Comp & Benefits:                      $10,776,341        $10,924,244
                           Other Expenses:                                $9,028,714          $11,128,555
                           Dividends/Interest:                             $5,847,781         $7,626,961
                           Reserve & Retained Earnings:                   $10,718,570        $10,976,270

                           Assets:                                  $777.84 million     $754.33 million
                           Savings:                                 $661.95 million     $644.17 million
                           Loans:                                   $350.71 million     $373.15 million

                                                                         Youth ACCou nts
Branch Locations
           California              Modesto                            Stockton (Off Highway 99)                     Oregon
                                   538 McHenry Avenue                 1916 N. Broadway
Alameda                            Modesto, CA 95354                  Stockton, CA 95205                Gladstone
1620 South Loop Road                                                                                    805 E. Berkeley St.
                                   Morgan Hill                        West Stockton (Off Highway 5)
Alameda, CA 94502                                                                                       Gladstone, OR 97027
                                   325 Digital Drive, Suite B         1818 Grand Canal Blvd., Suite 1
Auburn                             Morgan Hill, CA 95037              Stockton, CA 95207
1915 Grass Valley Hwy, Suite 400
                                   Redding                            Yuba City                                       Utah
Auburn, CA 95603
                                   20308 Engineers Lane               468 Century Park Dr., Suite B
Burlingame                         Redding, CA 96002                  Yuba City, CA 95991               Salt Lake City
828 Mahler Rd., Suite A                                                                                 1958 W. North Temple, Suite B
                                   Rohnert Park (Sonoma County)                                         Salt Lake City, UT 84116
Burlingame, CA 94010
                                   6225 State Farm Drive, Suite 102
Dublin                             Rohnert Park, CA 94928
7300 Amador Plaza Road Suite A                                        Kapolei
                                   Sacramento (Off Highway 80)
Dublin, CA 94568                                                      2181 Lauwiliwili St., Suite 120
                                   3920 Lennane Drive, Suite 110
                                   Sacramento, CA 95834               Kapolei, HI 96707
1213 5th Street                                                                                                                         9
                                   Sacramento (Off Highway 50)
Eureka, CA 95501
                                   9806 Old Winery Place, Suite 5                   Nevada
Fairfield                          Sacramento, CA 95827
2540 N. Watney Way                                                    Elko
                                   San Jose
Fairfield, CA 94533                                                   1720 Mountain City Highway
                                   798 N. First St.
                                                                      Elko, NV 89801
Fresno                             San Jose, CA 95112
4860 N. Cedar Ave                                                     Reno
Fresno, CA 93726                                                      1290 Corporate Blvd.
                                                                      Reno, NV 89502

Reach Us                                                                                                 MobiLe bAnking

Mailing Address                    eBranch Banking                    Text Banking
PO Box 5073                                    Text 40293
Livermore, CA 94551
                                   Telephone Banking
Telephone                          925-454-4040 • 800-499-6328
(925) 454-4000 • 1-800-877-4444
                                   Mobile Banking
Web Address              
                                                                                                         ebranch bAnking
                                                   OEFCU offers you and your
                                                   family the personal service
                                                   of a small Credit Union, with
                                                   the convenience of a large

     P.O. Box 5073 Livermore, Ca 94551 • (800) 877-4444 •

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