Annual Report 2017

Annual Report 2017

Statements of Income
Years Ended December 31, 2017 and 2016​

2017

2016
INTEREST INCOME
Interest on Loans $1,245,606 $1,289,546
Interest on Investments  1,001,646 840,705
TOTAL INTEREST INCOME 2,247,252 2,130,251
INTEREST EXPENSE
Dividends on Members’ Share Accounts  275,807 289,961
NET INTEREST INCOME 1,971,445 1,840,290
PROVISION FOR (recovery of) LOAN LOSSES  83,641 442,061
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 1,887,804 1,398,229
FEE AND OTHER OPERATING INCOME  497,451 385,020
NON-INTEREST EXPENSE
Compensation and Benefits  1,059,758 1,019,456
Office Occupancy and Operations  830,836 874,590
Professional Fees  116,681 102,406
Travel and Conference  17,020 36,669
Publicity and Promotion  17,549 17,379
Loan Servicing  13,018 12,680
Other 229,494 238,795
TOTAL NON-INTEREST EXPENSE 2,284,356 2,301,975
NET INCOME(LOSS) $100,899 ($518,726)

Statements Of Financial Condition
Years Ended December 31, 2017 and 2016

2017

2016
ASSETS
Cash and cash equivalents $5,110,041 $7,480,085
Certificates of Deposit 22,610,000 22,915,000
Investment Securities – held to maturity 17,439,754 14,918,023
Investment Securities -available for sale 9,175,300 9,365,610
Investments in Credit Union Service Organizations 245,487 243,902
Loans Receivable, net 29,123,776 28,085,885
Accrued Interest Receivable 273,762 225,934
Furniture and Equipment, net $12,912 $12,258
NCUSIF Deposit 688,830 676,855
Member Capital Share Deposit 80,594 80,594
Prepaid Expenses and Other Assets 1,301,138 1,656,496
TOTAL ASSETS $86,061,594 $85,660,642
LIABILITIES AND MEMBER’S EQUITY
LIABILITIES
Members’ Shares $75,580,486 $75,217,132
Accrued Expenses and Other Liabilities 1,279,304 1,437,020
TOTAL LIABILITIES 76,859,790 76,654,152
Members’ Equity, Substantially Restricted 9,201,804 9,006,490
TOTAL LIABILITIES AND MEMBERS EQUITY $86,061,594 $85,660,642

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Chairman’s Report 2017

From my report last year:

“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.”

That about says it all for 2017.  We made major changes to our budget and while Net Income was not what we were hoping for, we think we turned a corner in 2017.  The economy is gaining strength, interest rates are no longer hovering around miniscule, and we’re adding new Membership Groups, such as Dutch Kills Civic Association and The Big Six Towers.

Several Credit Unions have had massive losses on Taxi Medallion loans which are severely impacted by ride-hailing services.  While Metro’s Medallion portfolio is relatively modest, we booked a reserve for potential losses.  We are in far better shape than most.

For detailed financial information, please see our Treasurer’s Report and Audited Financials.

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 2017

With the economy picking up in 2017, the Fed saw fit to begin a more regular raising of rates. From the lowest fed funds rate of .25% in December 2008 and one increase each in December of 2015 and 2016, there were three increases in 2017 and one in March of 2018. Although the benefits of the increases have only begun for the Savings Consumer in 2018, the Credit Union has been able to increase Investment Income throughout 2017. And as unfortunate as it will be for the Borrowing Consumer, Greater Metro’s bottom line should see gains from the already increasing loan rates. We diversified our lending to include Commercial Real Estate in our portfolio mix and after funding a few more loans in 2018 should have a significant increase in loan income in 2018. As always, the Credit Union manages its vendor relationships and expenses very well.

Greater Metro’s Net Worth Ratio has held steady at the 12.5% mark, which is considered very well capitalized by our regulator, the NCUA. We continue to actively manage our Taxi Medallion portfolio amid the continuing struggles in that industry. Although the loans in our portfolio continue to make payments, most have been restructured and additional charges to our reserves will most likely continue until the market values stabilize.

The Board of Directors and Management are 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. Our goal is to bring financial products and services to a growing membership base. In 2017 we welcomed the members of the Dutch Kills Civic Association and in early 2018 we added the residents of the Big Six Towers in Woodside.

Included in this Annual Report are Greater Metro’s Statements of Financial Condition and Statements of Operations for the years ended December 31, 2017 and 2016. They are accompanied by an unmodified opinion from our Independent Auditor’s. 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 2017 the volunteers were Thomas Amato, the Chairman, Thomas McCarthy, Andrea Nelson, John Forster and Vincent D’Agostino.
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 2017 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
Chairman

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President’s Report – 2017

The goal of most business Presidents is to oversee an operation that adds the most profit to the bottom line. My goal as a Credit Union President is to bring the best financial products and services that we can afford to our owner-members. That means structuring the business where a profit can be earned in order to redistribute it to its member/customers in the form of higher savings and lower rate loans while providing convenience and friendly service.

The Profit
Our stable net worth ratio of 12.42% at the end of 2017 represents a life to date accumulation of profits that keeps Greater Metro in a “Very Well Capitalized” position per our regulator; the NCUA. Most of our earnings come from our loan and investment portfolios. Since we don’t pride ourselves on earning off of the backs of our members, we do the best we can from our $50mm conservative investment portfolio. With rates at their lowest for the last 9 years, it has been challenging. We expect to see higher returns as we move ahead with the help of the Federal Reserve’s rate increases. We supplemented our core earning vehicles by investing in Taxi Medallion Loan Participations. For decades, a dream. For the last few years, a nightmare. Managing this asset continues to be a struggle. Due to a stabilizing of their market values, we were able to show a bottom-line profit in 2017 after two years of losses. A corporate strength of ours continues to be maintaining excellent vendor relationships while managing our expenses.

The Convenience
The days of stopping by the office branch to make a deposit or withdrawal before going to lunch or home for the day are long gone (except for those at the VA in Manhattan). Convenience was a Credit Union staple. With employers shutting down or cutting back on fringes, members have struggled with our access. Many still mail in deposits and utilize our shared branching network. We’ve added online banking and bill pay. More recently a mobile app and remote deposit capture. We plan on adding more in the digital arena as well as partnering up with more vendors to bring discounted services and products to the membership.

The Service
As always, we do take pride in the fact that our staff of twelve are committed to the stewardship of our member assets ($86mm at 12/31/17) and the personal handling of member needs. Although it could be frustrating not getting picked up on the first call, but rarely does anyone who leaves a message not get a callback that same day.

We optimistically look ahead to 2018 to grow revenue and membership. We will increase our outreach efforts to our newer sponsor groups, Dutch Kills Civic Association and The Big Six Towers, and never take for granted the loyalty of all of our members. On behalf of our Volunteer Board and Committees and our Staff, it is our pleasure to serve you!

Peter Nalaskowski
President & CEO

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