Annual Report 2016

Annual Report 2016

Statements of Income
Years Ended December 31, 2016 and 2015

2016

2015
INTEREST INCOME
Interest on Loans $1,289,546 $1,375,285
Interest on Investments 840,705 925,400
TOTAL INTEREST INCOME 2,130,251 2,300,685
INTEREST EXPENSE
Dividends on Members’ Share Accounts 289,961 364,597
NET INTEREST INCOME 1,840,290 1,936,088
   
PROVISION FOR (recovery of) LOAN LOSSES 442,061 1,759,790
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 1,398,229 176,298
FEE AND OTHER OPERATING INCOME 385,020 397,329
NON-INTEREST EXPENSE
Compensation and Benefits 1,019,456 985,234
Office Occupancy and Operations 874,590 874,137
Professional Fees 102,406 97,578
Travel and Conference 36,669 48,343
Publicity and Promotion 17,379 38,770
Loan Servicing 12,680 11,085
Other 52,029 58,858
TOTAL NON-INTEREST EXPENSE 2,115,209 2,114,005
OTHER  INCOME (EXPENSE) (186,766) 66,032
NET INCOME(LOSS) ($518,726) ($1,474,346)

Statements Of Financial Condition
Years Ended December 31, 2016 and 2015

2016

2015
ASSETS
Cash and cash equivalents $7,480,085 $6,708,944
Certificates of Deposit 22,915,000 23,710,711
Investment Securities – held to maturity 14,918,023 21,305,406
Investment Securities -available for sale 9,365,610 3,981,572
Investments in Credit Union Service Organizations 243,902 235,893
Loans Receivable, net 28,085,885 29,920,724
Accrued Interest Receivable 225,934 270,056
Furniture and Equipment, net $12,258 $20,423
NCUSIF Deposit 676,855 686,565
Member Capital Share Deposit 80,594 80,594
Prepaid Expenses and Other Assets 1,656,496 330,714
TOTAL ASSETS $85,660,642 $87,251,602
LIABILITIES AND MEMBER’S EQUITY
 
LIABILITIES
Members’ Shares $75,217,132 $76,113,391
Accrued Expenses and Other Liabilities 1,437,020 1,101,749
TOTAL LIABILITIES 76,654,152 77,215,140
Members’ Equity, Substantially Restricted 9,006,490 10,036,462
TOTAL LIABILITIES AND MEMBERS EQUITY $85,660,642 $87,251,602

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Chairman’s Report 2016

The news this year was completely dominated by the campaign and election.  From your Credit Union’s perspective what matters is reducing or eliminating the flood of new regulations coming out of Washington these past few years.  Most are due to legislation enacted in response to the Mortgage Crisis and financial meltdown that followed.   If you hear of “Dodd – Frank” or “the Durbin Amendment” in the news we hope to see changes to the legislation that have been detrimental, adopted in the rush to respond to the crisis.

Credit unions had nothing to do with creating the crisis, and it is difficult to see how any of the new regulations would have prevented, forestalled, or ameliorated it, yet new regs keep piling on.   It is safe to say we’re hoping for changes in the regulatory environment.

While Metro had a profitable year, our net income was down and we missed several budget targets.  We have taken actions which we expect will fix some problem areas and are monitoring the budget closely, expecting better results in 2017.  Please see our Treasurer’s Report and Audited Financials for more information.

I want to thank Management and our Staff for their dedicated service to Metro’s membership.

Sincerely,

Robert G. Morrison

Chairman

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Treasurer’s Report 2016

The markets, the Federal Reserve, and the World waited, perhaps not so patiently, for the results of the U.S historic 2016 elections.  As a result, Greater Metro endured yet another year of stagnant interest rates and challenging yields on the investment products our dedicated executive team considers whilst managing the membership’s portfolio.  The Fed did blip rates up ½ point in December which offered some opportunity for the team during the last weeks of the year.

We continue to monitor closely any effects the Taxi Medallion investments may have on the Credit Union financial health.   At the close of 2015 financial period, the NCUA commended our proactive funding of the Allowance for Loan Loss account in the amount of $1.6 million.   After further adjustments, we now have a total of $1.4 million apportioned as of December 31, 2016.  The NCUA, our auditors Wojeski, the Board, and Management all believe this figure is a sustainable solution for any potential loss.  As the Taxi Medallion sector has waned as an investment opportunity, the Board has approved commercial real estate participation loans as a low risk attractive return on investment for management to add to its coffers in 2017.  As always, Management is diligently focused on the safety and financial stability of the Credit Union, so as to ensure Greater Metro continues to be a strong membership institution, to grow our existing membership base, and to attract additional SEGs in our field of membership.

Included in this Annual Report is Greater Metro’s Balance Sheet and Income Statement for 2016 compared to 2015.  For a complete report, please submit a written request to the Credit Union.  Should you have any question, please contact me at rstoffo@greatermetrofcu.org.

Respectfully,

 

Rosemarie E. Stoffo

Treasurer

Chairperson Asset Liability Committee

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Report of the Supervisory Committee

The Credit Union Supervisory Committee consists of volunteer members appointed by the Board of Directors. The Supervisory Committee acts as a link between the board, management, and the membership. Any member who feels that their concerns are not being appropriately addressed, may escalate them to the Committee. In 2016 the volunteers were Thomas Amato, Thomas McCarthy, Andrea Nelson, John Forster and Vincent D’Agostino. Thomas Amato was selected as Chairperson

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 engages the public accounting firm of Wojeski & Co.to conduct an annual opinion audit of the Credit Union’s financials. In the course of this audit they are able to assess whether Management is effectively carrying out the plans and policies established by the Board. As usual, it’s worthwhile noting that Credit Unions are not required to have this financial opinion audit until they reach $500 million in assets. Your Volunteers and Management have always believed that this more extensive review is a way of further safeguarding the assets of the Credit Union.

The complete version of Wojeski’s Audited Report of the 2016 Financial Results may be obtained by requesting them from the Credit Union in writing.

In addition to the Annual Audit, the Supervisory Committee also engages Wojeski & Co. to perform monthly on-site internal audits to review specific aspects of the Credit Union’s operations.

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@www.greatermetrofcu.org

 

Thomas Amato
Chairperson

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President’s Report – 2016

Although the Presidential campaign and election dominated the news in 2016, credit unions were stifled by a continued low rate environment and ongoing concern over the Taxi Medallion industry. As we reported at last year’s annual meeting, our 2015 results were impacted by a charge of $1.6mm related to a drop in the market values of our Taxi Medallion Loan Participation portfolio. This was an aggressive pro-active action applauded by the regulators and affirmed by our auditing firm as they issued their opinion audit for 2015. As a result, our bottom line showed a loss of $1.5mm but our Net Worth Ratio remained strong at 12.7%.

In 2016 our operations yielded a bottom line of $64 thousand and a Net Worth Ratio of 12.97%. Credit Unions, their accounting firms and the NCUA spent the year strategizing on how to address the billions of dollars tied up in Taxi Medallion loans. Even with only $5.5mm in our portfolio, we have been spending an inordinate amount of resources meeting the requirements set by the NCUA in the handling of the loans. As was the case last year, an extension to produce audited statements was granted to us by the Regulator. We expect our Auditing firm to issue their opinion by June 30, 2017.

As is the case when reporting the results from the prior year, it is always with keeping our sights on the year to come. What can we do better? We believe our “Taxi” issues have stabilized. The Board approved a budget for 2017 cutting back further on expenses and re-emphasized to management the need to grow membership and revenue.

Work that began in 2016 to add the Dutch Kills Civic Association to our field of membership was finalized in 2017. This “community” association located steps from our main office should prove to be a successful partnership in both our futures. Besides reacquainting ourselves with a number of longtime sponsor organizations such as the Interchurch Center and the Population Council we are close to adding a large Queens housing cooperative to our field of membership. We believe that adding these groups will translate into fresh revenue streams sorely missing. Adding new members will also give us an opportunity to review fees, products and services and modify them where necessary.

I would like to assure the membership that I and the staff of Greater Metro are completely committed to the success of our Credit Union. We will do whatever we can to bring professional service and competitive products to our members.

 

Peter Nalaskowski
President & CEO

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