cse federal credit union annual report 2013
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COMMUNITY.
STRENGTH.
EXCELLENCE.
IT’S IN OUR
DNA
ANNUAL REPORT
2013
A Message from thePRESIDENT AND CHAIRMAN
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CLARK J. YELVERTONPRESIDENT/CEO
KEN GARDNERBOARD CHAIRMAN
strong heritage. smart future.®
As the great Yankee catcher Yogi Berra once said, “it’s déjà vu all over again.” In 2013, CSE’s déjà vu was the similarity in
the credit union’s financial footings at the end of the year compared with those at the beginning of the year. Although those benchmarks fluctuated up and down during the year, the end results were remarkably similar to year end 2012. Equally similar is the fact that CSE remains an extremely safe, sound and strong credit union.
2013 was a largely successful year in positive growth, but there were some areas where growth was not so positive. Assets grew by 0.7% to just over $279.6 Million. Capital, the measure of a financial institution’s net worth, grew by 2.7% to 12.47%. That is roughly 2% higher than the national peer average and almost 5.5% higher than what the credit union’s regulatory agency, the National Credit Union Administration, considers being a well-capitalized credit union. In fact, with capital of 12.47%, CSE could reach $498 Million in assets and still be a well-capitalized credit union.
The membership continued to demonstrate its trust in CSE by maintaining deposits of almost $242.8 Million, a slight 0.6% increase over 2012. Regular share account deposits increased by over $7.5 Million while share certificate accounts decreased by almost the same amount, indicating a shift from term deposits to more liquid deposit accounts. Because of the inability of credit unions, including CSE, and other financial institutions to deploy deposits in loans and/or investments, interest and dividend rates remain historically low. Until loan demand increases and the economy demonstrates significant and sustainable growth, this low rate environment will continue within the financial services industry.
While the economy is still being hampered by the lingering effects of the recession and very sluggish growth indicators, we in Southwest Louisiana continue to be encouraged by the news about
upcoming oil and gas industrial expansion projects in our area. These projects are developing, and the signs of a significant “boom” in our communities are creating excitement and anticipation. This turnaround in our economy will hopefully help release some of the pent-up demand that keeps consumers and CSE’s members from making the loans they need for new or used vehicles, home repairs and other things that they may have delayed over the last few years. CSE’s loan volume declined in 2013 by about 2.7% even though our loan rates are very competitive and in most cases lower than the competition. We urge members to call and let us show how we can provide quality loan products at favorable rates and a level of service that is unparalleled.
Our earnings in 2013 were positive but still diminished somewhat by the expenses associated with the corporate stabilization assessments. Those assessments are tapering off and hopefully will be history in the very near future. Membership increased by about 1.7% to over 34,400. We also added another 50 local businesses and associations to our field of membership, allowing more people the benefits of membership in CSE Federal Credit Union. We welcome all of our new members and urge you to take advantage of the benefits and services CSE has to offer.
Our biggest undertaking in 2013 was a renovation of our Sulphur branch on Swisco Road. As you know this office was CSE’s only location from 1994 to 2006. So at 19 years old, it was time for some remodeling and improvement. The biggest concerns were a very leaky flat roof and the increasing costs of an unreliable air conditioning system. With a growing membership and higher traffic in the building, we determined that a full remodel was necessary and started the six month project in July. As this report is being written, there are only a few lingering finishing touches to be made. We think the renovations we made to the building will provide the membership with
an attractive, comfortable, and efficient place to conduct their credit union business. Please take an opportunity to visit the newly renovated office and watch for announcements of an upcoming grand reopening.
While that renovation is winding down, we will soon begin construction of a full-service branch on Highway 378 in Moss Bluff. We hope to open this branch around the beginning of the fourth quarter of this year.
We want to thank and congratulate CSE’s staff for another great year of service and dedication to the credit union and to the membership. That service is second to none and is significant to the success CSE has achieved throughout its 70 year history. Also significant is the time and effort given to the credit union by its member-elected Board of Directors and the appointed members of the Supervisory Committee. These unpaid volunteers are responsible for the direction the credit union takes and are tireless in the contribution of their time and talents. We want to thank them as well.
We never forget that we would not have a credit union were it not for the 34,415 member-owners of CSE Federal Credit Union. Our promise is to always provide the best quality financial services to satisfy the needs of a growing and versatile membership. We recommit ourselves to that promise every time we experience the joy of helping members achieve their financial goals. We thank the membership for giving us that opportunity.
Sincerely,
Clark J. Yelverton Ken GardnerPresident/CEO Board Chairman
It’s in our DNA
It’s a thread that unites all of our members, from one generation to the next. It binds our network of employees, volunteers, and members to a higher idea
of community. CSE offers more than just a commitment to excellence in financial services. We are dedicated to serving the Southwest
Louisiana communities that we have called home for 70 years. No matter how your membership is obtained–whether passed
on from father to son, mother to daughter, or business to employee–joining CSE Federal Credit Union means you’re a part of our family.
GRANDFATHER Compa s s i o n
GRANDMOTHER
Hon e s t y
MOTHER
Comp e t e n c e
FATHER
I n t e g r i t y S ISTER
Tr u s two r t h y BROTHER
There’s a strand running through the CSE Federal Credit Union family.
The Administration ofCSE FEDERAL CREDIT UNION
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strong heritage. smart future.®
CLARK J. YELVERTONCHIEF EXECUTIVE OFFICER
JOYCE DAVISCHIEF FINANCIAL OFFICER
BONNIE MCDONALDCHIEF OPERATIONS OFFICER
BOB RUSTCHIEF LENDING OFFICER
KASEY CORMIERHUMAN RESOURCES MANAGER
TL STEGALLCHIEF INFORMATION OFFICER
TONJA BLACKACCOUNTING MANAGER
DIANA LANDRYBRANCH MANAGER
JUDY MORRISSEYBRANCH MANAGER
SHERRY WOODSMEMBER SERVICES SUPERVISOR
KURT SCHULTZCOLLECTIONS SUPERVISOR
REBEKAH GIEGERMEMBER SERVICES SUPERVISOR
CHRISTINA DAVISCONSUMER LENDING SUPERVISOR
MICHELLE JINKSFINANCIAL ANALYST
ANNETTA SHARPINTERNAL AUDITOR
PEGGY WRIGHTMORTGAGE LENDING MANAGER
COLLEEN DESSELLEDIRECTOR OF MARKETING
TOM BALDASSARICOMPLIANCE OFFICER
TYLER THERIOTELECTRONIC SERVICES SUPERVISOR
JIM SWIFTBUSINESS LOAN OFFICER
Senior Management
Middle Management
KEN GARDNERCHAIRMAN
BILL DEITCHVICE-CHAIRMAN
MIKE TUCKERTREASURER
RICK SCOTTSECRETARY
RICHARD PELLOQUINBOARD MEMBER
Board of Directors
RON KEMERLYSUPERVISORY COMMITTEE CHAIRMAN
Supervisory Committee
LENARD COLEBOARD MEMBER
RICK HUMPHREYBOARD MEMBER
LEO BLACKMERBOARD MEMBER
JOHNNIE BOTLEYBOARD MEMBER
We’ve been here since our community’s grandparents got their first jobs, bought their first
homes, and began living the American dream.
JANICE WILTZSUPERVISORY COMMITTEE MEMBER
RICHARD CUNNINGHAMSUPERVISORY COMMITTEE MEMBER
Meet the People Who Are Here to Serve You!
At CSE we are consistently striving to serve our members with great products and services. We want you to know that we are here for you. We want to experience the joy of helping you achieve your financial goals.
IN MEMORIAMGERALD M. “JERRY” MILLER 07/26/1952 - 08/03/2013
Jerry was a dedicated and prudent member of the Board of Directors for eight years. He continues to be greatly missed.
The Supervisory Committee independently evaluates the soundness of CSE Federal Credit Union’s operations and activities in compliance with the Federal Credit Union Act. The Committee helps to ensure that management protects and safeguards assets
by implementing sound internal controls and maintaining practices and procedures that are in agreement with generally accepted accounting principles. The Committee
also ensures that the Credit Union’s financial statements provide a fair and accurate representation of the Credit Union’s financial condition and results of operations.
The Supervisory Committee is assisted in carrying out its responsibilities by engaging the independent accounting firm of Postlethwaite & Netterville to conduct an audit of the
financial statements. Postlethwaite & Netterville issued an unmodified, clean opinion on the financial statements as of and for the year ended December 31, 2013. A complete copy of the
audited financial statements, including footnote disclosures, is available upon request. A summary of the financial results is included in this Annual Report.
The Supervisory Committee is confident that it has fulfilled its responsibilities as outlined above. It is the opinion of the Supervisory Committee that CSE Federal Credit
Union is in sound financial condition, the integrity of its member accounts is maintained, and its assets are properly safeguarded.
Supervisory CommitteeRon Kemerly, Chairman
Janice WiltzRicky Cunningham
Lending REPORT
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In CSE’s 70 years of operation, over 200,000 loans have been made to members totaling well over a Billion Dollars. Just to make a point, in number of loans per year that’s an average of 2,857, and an average of $14,286,000 per year in dollar amount of loans. To put that in perspective, CSE began in 1943 and it wasn’t until September of 1980 that assets reached $14,000,000. I use this historical information to emphasize the fact that for the last 70 years CSE has done its best to exemplify the credit union motto of “People Helping People” by providing loan products to allow members to borrow deposits from other members to finance loans for life’s needs. Our loan products have changed over the years, as have our faces, but our mission has not changed. We strive to experience the joy of helping our members achieve their financial goals.
CSE has a wide variety of loans to offer members – whether it be a personal loan for just about any purpose, or a loan to buy that new or used dream car you’ve been looking at, or to buy a piece of land to build a house on, or to buy or refinance a home for a growing family, or maybe a 4-wheeler or a boat for fishing or family fun, or even a member business loan to expand and grow your business. CSE has loans for all of these uses and more.
Consumer loans these days are very competitive. There are loan providers on every street corner and online offering loans and we know you have a choice. When it comes to loan rates, we ask that you look at CSE’s rates, call us to discuss options and give us a chance to show you how we can help you defeat the lure of seemingly more attractive financing elsewhere. One thing we specifically ask is that you allow CSE a chance to show you how financing a new car with CSE is better than allowing another lender
to finance your new vehicle through an auto dealer. Those lenders have to pay a high price for every loan that dealer sends to the lender. Those lenders have to recoup their cost somehow and it is usually done with higher rates. CSE’s rates are very competitive and in many cases much lower than the dealer rates. So give CSE a chance to finance your new or used vehicle. Check out our rates online at www.csefcu.org before you go car shopping and give us a call before you make that deal.
We hope you will take advantage of all the products and services CSE has to offer. We will make the lending process as simple as possible and we will provide it to you with the great service we are known for. This is our promise to you, it’s in our DNA. Thank you for your loyalty and your business.
Sincerely,
Bob RustChief Lending Officer
strong heritage. smart future.®
Supervisory Committee REPORT
Statement of FINANCIAL CONDITION Statement of INCOME
ASSETSINCOME
EXPENSELIABILITIES AND MEMBERS’ EQUITY
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Cash and cash equivalents $ 11,551,447 $ 14,797,725Interest-bearing time deposits in other financial institutions 41,317,000 37,827,000Investment securities: held to maturity 43,285,967 37,446,594Loans receivable, net 164,808,826 169,166,889Accrued interest receivable 617,947 687,259NCUSIF deposit 2,338,368 2,324,920Membership deposit at corporate credit unions 34,148 34,148Investment in CUSOs 109,274 109,274Premises and equipment - net 14,508,251 13,288,547Land held for sale – 993,441Other assets 1,055,936 952,864TOTAL ASSETS $ 279,627,164 $ 277,628,661
LIABILITIESMembers’ shares and savings accounts $ 242,780,446 $ 241,403,157Accrued expenses and other liabilities 1,989,647 2,287,648Total Liabilities $ 244,770,093 $ 243,690,805Commitments and contingent liabilitiesMembers’ EquityRegular reserve 10,712,305 10,712,305Undivided earnings 24,144,766 23,225,551Total Members’ Equity 34,857,071 33,937,856TOTAL LIABILITIES AND MEMBERS’ EQUITY $ 279,627,164 $ 277,628,661
INTEREST INCOMELoans to members $ 8,495,497 $ 9,498,610Investment securities 764,362 790,661 9,259,859 10,289,271 INTEREST EXPENSE Members’ share and savings accounts 888,365 1,164,215NET INTEREST INCOME 8,371,494 9,125,056PROVISION FOR LOAN LOSSES 569,768 937,330NET INTEREST INCOME AFTER PROVISION OF LOAN LOSSES 7,801,726 8,187,726NON-INTEREST INCOME Overdraft, NSF, other fees and charges income 1,959,139 2,136,522Gain on disposition of assets - net 408,804 95,013Other non-interest income 455,861 312,971 $ 2,823,804 $ 2,544,506
NON-INTEREST EXPENSECompensation and benefits 4,718,929 4,475,652Office operations 1,847,038 2,016,574Professional and outside services 755,894 794,140Advertising and Promotion 646,551 591,157ATM/debit card and other servicing expenses 1,134,857 1,088,084Other non-interest expense 415,977 387,715NCUA assessments 187,069 220,867 9,706,315 9,574,189NET INCOME $ 919,215 $ 1,158,043
DEC 2013DEC 2013
DEC 2013 DEC 2013
DEC 2012DEC 2012
DEC 2012 DEC 2012
strong heritage. smart future.®
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Credit unions were founded on the philosophy of “people helping people” and at CSE, we strive to continue to follow the traditions of our founders.SELECT EMPLOYEE GROUPS Added in 2013 Community INVOLVEMENT
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Acadian DentalAdvanced Office ProductsAdvantage Tire & Service, LLCAeroframe ServicesAlfred Palma, LLCApogee PhysiciansBDK Associates, LLCBriley’s Paint and Body Shop, Inc.Calcasieu Council on AgingCB & I Lake CharlesCB & I SulphurChildren’s Clinic of SWLA, Inc.Chosen Valley Homeowners Association, Inc.Compass Counseling, LLCEaves Remodeling, LLCESE International Consulting & EngineeringEvangeline Home Health AgencyFamous Foods, LLCFusion FiveGeorge Hayek Insurance AgencyImperial Calcasieu Surgical CenterImperial HealthKia of Lake CharlesLA Ash Products and Services, LLCLake Charles Bible ChurchLayonz Investments, LLCLee’s Transmission ServiceLicense 2 Drive Driving SchoolLouisiana Fins, LLCMcDaniel Constructors, LLCMiles Barber and Beauty SalonMyrtis Mueller RealtyNadine Dunbar Gills Attorney at Law, LLC
National Networks, LLCReed’s Metals, Inc.Rosewood Nursing CenterSasol North America, Inc.Star Concrete Pumpers, Inc.Steamboat Bill’s on the LakeStine, LLCSWLA Solar SolutionsThe Pathology LabTKS Properties, LLCUSS Orleck Naval Museum, Inc.Waffle House #1136Waffle House #1154Waffle House #1202Welsh Equipment of L.C. CorpWil-Pat Enterprises D.B.A Dance BizWord of Hope Family Worship Center in Lake Charles Louisiana
CSE is a credit union that not only provides complete financial services, but lives the motto of “people helping people”. We want to “experience the joy of helping our members achieve their financial goals.” We want our loyal members, who have been with us for many years, as well as our younger members, to feel they are prepared for anything they may experience in their financial future. This past year, CSE teamed up with Junior Achievement of SWLA to bring financial literacy assistance to our community’s youth. Staff participated in what is known as, “JA Day” (Junior Achievement) on April 24th at A. A. Nelson Elementary School. This event is an annual program presented by the SWLA Junior Achievement organization that allows business professionals to educate children ranging from elementary to high school, in ways of best home, work and financial practices. JA provided the teaching materials and we provided the volunteers. CSE was fortunate enough to have 10 volunteers from Management & Marketing trained on how to teach the J A programs. From those 10, six went as a team to A. A. Nelson Elementary for JA Day. One employee taught the lesson, while the other supported by passing out supplies and keeping the children on task. Our hope is to continue to grow with this program while shedding light on important financial material.
While CSE is joining forces to bring in Generation Y, we are also looking out for our current members as well. If you are looking to be financially fit but don’t know where to start, CSE provides financial literacy, free of charge. This service is provided as a tool to pave the path to success in healthy finances. CSE Financial Literacy Online Services:• SavvyMoney – is an online service which allows members
to understand and manage their debt, while devising a budget plan. Simply visit www.csefcu.org for more details.
• Home & Family Finance – is another online service with tips and tools to remember when making changes to your auto, home and retirement finances. Information can be found in our Quick Links area at www.csefcu.org.
• Consumer Education Fraud Series – Protect your finances and don’t be a victim of fraud. Use this online series, located on our Hot Topics page at www.csefcu.org to gain awareness of fraud tactics.
CSE Financial Literature (Available in Lobby):If you are in need of printed information regarding:
• Savings Account Practices• Budget Maintenance• Developing a good Credit Score and what that means• IRA Tips• College Fund Preparation
All of this information can be found in our lobbies in Lake Charles or Sulphur, free of charge. So make CSE a part of your healthy financial makeup and ask for more information today! It’s in Our DNA; why not yours?
strong heritage. smart future.®
Federally Insured by NCUAMembership & Eligibility Required.
MAIN OFFICE
4321 Nelson Road, Lake Charles, LA Phone: 337.477.2000Fax: 337.562.3109
SULPHUR BRANCH
2154 Swisco Road, Sulphur, LAPhone: 337.625.5747Fax: 337.626.3394
strong heritage. smart future.®Toll-Free 1.800.625.5747 www.csefcu.org