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Statements Of Financial Condition
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ASSETS |
2010 |
2009 |
Cash and cash equivalents |
5,579,014 | 7,970,816 |
Certificates of deposit |
31,362,000 | 22,181,000 |
Available-for-sale securities |
634,954 | 629,971 |
Held-to-maturity securities |
26,090,327 | 24,856,795 |
Investments in credit union service organizations |
119,705 | 113,157 |
Loans receivable, net |
21,920,084 | 24,077,516 |
Accrued interest receivable |
327,593 | 353,018 |
Premises and equipment, net |
100,510 | 165,129 |
NCUSIF deposit |
698,061 | 652,229 |
| Member Capital Share Deposit | 0.00 | 152,297 |
| Prepaid Expenses and Other Assets | 580,845 | 654,556 |
| Total Assets | $87,413,093 | $81,806,484 |
LIABILITIES AND MEMBER'S EQUITY |
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Liabilities |
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Members' shares |
75,604,056 | 70,140,064 |
Accrued expenses and other liabilities |
345,577 | 318,032 |
Total liabilities |
75,949,633 | 70,458,096 |
Member's Equity, substantially restricted |
$11,463,460 | $11,348,388 |
Total liabilities and members equity |
$87,413,093 | $81,806,484 |
All considered, 2010 was a solid year for your Credit Union. We are profitable, grew in assets, and are in solid shape, unlike the dozens of Credit Unions and hundreds of banks that have failed in the last two years.
2010 was a year of financial reform but little recovery. The Dodd-Frank financial reform bill seems to change nearly everything it can without actually doing anything about the cause of the mortgage crisis. Fannie Mae and Freddie Mac are untouched and still making no-asset mortgages.
Greater Metro purposely avoided making such risky mortgages or investing in the high-yielding “securitized” mortgage products known as CDO’s (Collateralized Debt Obligations). Despite having no part of the “troubled assets” which the $700Bn TARP (“Troubled Asset Relief Program) attempted to stabilize, Metro is still paying a heavy price in assessments and costs while our Federal regulator (NCUA) works to close and/or conserve Credit Unions that had such assets and are now insolvent. The bad economy and high unemployment also creates higher non-mortgage loan losses and reduced loan demand.
We now believe this mortgage mess will wind up costing Greater Metro around $1,000,000 by the time all the special insurance fund assessments are done. We’ve already expensed a large portion of this in 2009 and 2010 and are budgeting each year for the rest. We expect to be able to ride out this financial storm better than many, if not most other Credit Unions.
I want to thank our staff and volunteers for their hard work and look forward to the challenges that await in 2011 and beyond.
Sincerely, Robert G. Morrison
Chairman
I would categorize the 2010 financial performance of your credit union as positive. Although the economy is still lagging behind, we continue to experience growth and profitability. We recognize that consumer confidence has not fully returned, but we are anticipating that recovery is on the horizon. The Credit Union’s Management team, under the direction of your Board, is putting plans in place to capitalize on the economy’s rebound.
Greater Metro FCU continues to weather the storm, in part due to the conservative nature of the Board, who puts safety and our Members First! I feel confident saying once again that your credit union did have a better year than most. We have hired a new loan officer and dropped our loan rates to very competitive levels while giving our members the best savings rates within the tri-state area. So if you need a loan please look us up! Put your money to work with us so that you all can benefit from it.
The financial highlights for 2010 included:
We continue to be very conservative with our investment dollars as we have been doing all along. This approach is keeping our financial team very active and challenged in finding safe and secure instruments to offset what we pay our members in the form of dividends.
As reported last year we continue to make our involuntary contribution to the Credit Union Corporate System. Despite the related non-operating 2010 expense of $329k we are still profitable. The Corporate Stabilization Assessment and the replenishment of the Insurance Fund will be annual charges affecting our bottom line for the next several years. We are therefore committed to develop new streams of income to offset these non Greater Metro generated charges.
This annual report contains more of the financial details and the auditors report for 2010. Take a look through the report and feel free to contact me at vdagostino@greatermetrofcu.org if you have any questions or comments regarding the financial details.
We look forward to better times in 2011 and will continue to provide the very best products and services to our members. We greatly appreciate the opportunity to serve and are completely committed to the success of our credit union.
Respectfully Submitted:
Vincent D’Agostino
Report of the Supervisory Committee
The Credit Union Supervisory Committee consists of volunteer members appointed by the Board of Directors, plus a Board liaison and acts as a link between the board, management, and the membership. In 2010 the volunteers were Chairperson, Lisa Belifore, Thomas McCarthy, Steven Goldberger, Andrea Nelson, and Marco Resendiz. Robert Ambrose was the Board liaison. During 2011, Thomas McCarthy replaced Lisa Belifore as the Chairperson, who remained an active member of the Committee.
Once appointed by the Board of Directors, this Committee acts independently of the Board and carries out its oversight duties on behalf of the membership. In addition to providing a link to the members, the Supervisory Committee is also responsible for conducting an internal audit and to review that management is effectively carrying out the plans and policies established by the Board. The Supervisory Committee again retained the outside accounting firm of Wojeski and Company to audit the Credit Union’s practices and internal controls, and to render a decision on the financial reports that Management prepares. The year-end audit resulted in receiving an unqualified opinion, indicating that Wojeski is comfortable with the reporting done by the Credit Union’s Management, and the financial condition of the Credit Union as of December 31, 2010.
To provide an extra level of comfort, the Committee has retained the services of Wojeski and Company, who provided us with the services normally performed by an internal audit function. Monthly, an accountant from Wojeski and Company makes an on-site visit to the Credit Union to review particular aspects of the Credit Union’s operation. A strict schedule has been prepared and approved to assure that all operations of the Credit Union are reviewed multiple times during the year.
The Supervisory Committee is established to serve all members, and to respond to any concerns or questions that may arise. The Committee may be independently contacted at:
Supervisory Committee
Greater Metro Federal Credit Union
31-10 37th Avenue, Suite 403
Long Island City, New York 11101
An email address is also available for members to contact the Supervisory Committee to voice any concerns or complaints. The address is: supervisorycommittee@greatermetrofcu.org Thomas McCarthy
Chairperson
As the nation attempted to implement strategies to recover from the financial meltdown, all areas of the economy tried as well. The Credit Union world as a whole fared better than most, due to the conservative and cooperative nature of our industry. Although profits are a necessary goal of every business, it is not the end all for Credit Unions and avoiding the strategies and practices to achieve maximum profits at all costs minimized credit union losses. Profit has never been the driving force for us; Member Service has been. As noted on numerous occasions, Credit Unions did not escape losses. Some Credit Unions located in parts of the country that experienced significant housing declines were not as fortunate as those of us located in the Northeast. The Corporate Credit Union system, which has stabilized and is on the mend, was a victim of its own growth and a “Bailout” program was developed by our regulator, the National Credit Union Administration (the”NCUA”) to cover their losses. These losses will be paid for by all Credit Unions over the next ten years in the form of annual assessments. As you can see on our Statement of Operations, our 2010 charge was $177k. This was in addition to the final write-down of $152k in our investment with our Corporate. These non-operating expenses of $329k significantly impacted our bottom line which still showed a profit for 2010.
Maintaining profitability has been challenging. Our Credit Union has long suffered from an aging membership which results in less borrowing. This coupled with our existing members moving funds to us for safety and higher savings rates forced us to look at longer term and higher yielding government guaranteed investments and holding off on initiatives to reduce expenses to continue to reward our members for their loyalty while staying profitable. Assets grew again by 7% in 2010, but lower than the 24% growth we experienced in 2009. As you look at the comparisons between 2010 and 2009, you’ll notice that Greater Metro increased its Net Interest and Fee Income and reduced its Expenses. Other than the Non-Operating charges mentioned above, we have had to increase our reserve for member loan losses. We still expect to be as profitable if not more so in 2011. Our capital position continues to be one of the stronger ones in the industry. Plans to enhance our products and systems have been ongoing. Our plans for a successful future however, revolve around our ability to attract new members and ones who will borrow. The connections with our sponsoring employer groups have diminished over the years. These relationships are being rekindled. Although the employees at the Veteran’s Administration in Manhattan continue to be one of our more active groups, the employees of the Visiting Nurse Service of NY and the current employees of IBM are severely missing from our membership rolls. Our message to them is “We’re coming to get you!”
Peter Nalaskowski
President & CEO
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