- Statements of Income
- Statements Of Financial Condition
- Chairman’s Report 2019
- Treasurer’s Report 2019
- Supervisory Committee’s Report 2019
- President’s Report 2019
Annual Report 2019
INTEREST INCOME Interest on Loans $1,379,471 $1,323,696 Interest on Investments 1,116,196 1,083,473 TOTAL INTEREST INCOME 2,495,667 2,407,169 INTEREST EXPENSE Dividends on Members’ Share Accounts 441,641 361,829 NET INTEREST INCOME 2,054,026 2,045,340 PROVISION FOR (recovery of) LOAN LOSSES 50,000 1,897,110 NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 2,004,026 148,230 FEE AND OTHER OPERATING INCOME 401,053 437,534 NON-INTEREST EXPENSE Compensation and Benefits 984,044 919,207 Office Occupancy and Operations 833,153 861,647 Professional Fees 116,585 117,965 Travel and Conference 25,500 15,811 Publicity and Promotion 50,745 38,236 Loan Servicing 20,204 21,059 Other 135,785 381,224 TOTAL NON-INTEREST EXPENSE 2,166,016 2,335,149 NET INCOME(LOSS) $239,063 ($1,769,385)
ASSETS Cash and cash equivalents $9,249,170 $3,317,564 Certificates of Deposit 23,371,244 19,461,865 Investment Securities – held to maturity 12,066,238 17,316,238 Investment Securities -available for sale 7,726,760 8,839,818 Investments in Credit Union Service Organizations 247,705 246,878 Loans Receivable, net 29,826,492 30,021,660 Accrued Interest Receivable 245,242 274,552 Furniture and Equipment, net $63,457 $11,965 NCUSIF Deposit 671,178 680,973 Member Capital Share Deposit 80,594 80,594 Prepaid Expenses and Other Assets 1,613,409 1,214,448 TOTAL ASSETS $85,161,489 $81,466,555 LIABILITIES AND MEMBER’S EQUITY LIABILITIES Members’ Shares $76,064,361 $72,798,943 Accrued Expenses and Other Liabilities 985,955 1,364,314 TOTAL LIABILITIES 77,050,316 74,163,257 Members’ Equity, Substantially Restricted 8,111,173 7,303,298 TOTAL LIABILITIES AND MEMBERS EQUITY $85,161,489 $81,466,555
Had this been our usual Annual Meeting date in May, this report would have been much more focused on the positive results of 2019. Metro had a good year in 2019, better than 2018 and previous years, and on track for continued improvement. We had good reasons to be optimistic at the beginning of 2020.
We exceeded our budget for income, and assets are back up to $85 Million. Stable interest rates and increasing loan balances contributed to a healthy Net Income, while paying out very competitive dividends. After difficult years through the mortgage and financial crisis the economy was humming, and we expected to shift our focus from making the budget to expanding our products and services and attracting new members.
But the Annual Meeting for 2019’s results couldn’t be held in May, particularly not in person in New York City. By April, the world had changed. Work from home, meetings by Zoom and “flatten the curve” ended much economic activity in a matter of weeks. Unemployment soared. The Fed dropped interest rates by 150 basis points literally overnight. Our 2020 results through April showed our financials deteriorating quickly. If we had had the May Meeting to showcase our 2019 results, prudence would also have necessitated some statement on what was clearly happening in 2020. Our mid-year results show there is no way around having a significant operating loss this year.
Looking back today, 2019 is far in the rearview mirror, already forgotten, and none of the momentum, none of the plans, and especially none of the financial targets are makeable in 2020. We are in for a very difficult couple of years.
We are very thankful that our staff came through Covid unscathed, so far. Think of how upside down the world is when someone gets tested, “only” has pneumonia, and we all sigh with relief. Stay safe and healthy.
Robert G. Morrison
The US economy improved during 2019 with the unemployment rate at its lowest in several decades as well as a bullish stock market. Our budget for 2019 was based on the assumption that interest rates would increase. However, by the beginning of the year there were signs that interest rates may not increase. In fact, the yield curve started to invert by the first quarter indicating that the economy was slowing down. The inevitable happened when the Fed cut rates three times during the year – from 2.25% at the beginning of 2019 to 1.50% at year end. Although rates were cut, our investments were not significantly impacted and we were able to record a net income of $239k and honor our commitment to pay dividends on your share accounts.
During 2019 we funded over 223 loans totaling $4.3mm and made dividend payments in the amount of $442k. The Credit Union’s Net-Worth Ratio slightly decreased from 11.43% the prior year to 10.77% as of December 31, 2019, which is still considered well capitalized by our regulators, the National Credit Union Administration (NCUA). The decrease was due primarily to an increase in total assets.
As with most financial institutions, Greater Metro has been severely impacted from the effects of COVID-19 pandemic, where the economic crisis in the US has reached an unprecedented scale. It has created a demand and supply shock that has never been seen since the Great Depression. The Federal Reserve Bank took immediate action and slashed interest rates to near zero in March 2020. This action has severely impacted the Credit Union investment portfolio. Prior to COVID-19, our weighted average interest rate on investments was 2.16% compared to 1.34% as of August 2020. Matured and Callable investments for the remaining months in 2020 and beyond will be renewed at significantly lower rates. The challenge for Greater Metro to increase revenue will be enormous, because there are very few risk-free options available. In fact, experts believe that interest rates will remain low through 2023.
In light of the grim news about the US economy, the Board of Directors and Management will continue to focus on the safety and soundness of the financial stability of the Credit Union. You can be assured that the Net Worth of Greater Metro will remain strong as we navigate our way to find products that are profitable and at the same time provide services to you the members.
Included in this Annual Report are Greater Metro’s Statements of Financial Condition and Operations for the years ended December 31, 2019 and 2018, respectively. They are accompanied by an unmodified opinion from our Independent Auditors. For a complete report, please submit a written request to the Credit Union. Should you have any question, please contact me at firstname.lastname@example.org
Chairperson Asset Liability 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 2019 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.
Included in this Annual Report is a condensed version of our audited financial statements along with an unmodified opinion from our auditors, Wojeski & Co. The complete version of Wojeski’s Audited Report of the 2019 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 reviews of 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:
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: email@example.com
The Pandemic. The reason that our Annual Meeting was rescheduled to September 23rd from its usual date in May. The reason that our Credit Union’s 50th Year Anniversary will be celebrated in 2021. The reason that all of our members were impacted in so many different ways with some suffering the ultimate loss, in the death of a family member or friend.
Greater Metro salutes all of those who stood on the front lines serving those in need, especially our members at the VA Hospital and our Visiting Nurses. We at Greater Metro stayed available throughout. With limited branch hours at Long island City and some down time at our VA Branch, employees worked both from the office and home to provide continuous service.
This is still an Annual Meeting to report on our financial and operational health and successes during 2019. Our audited financial statements reported income of $239k for the year with assets increasing $3.7mm to $85.2mm. Our Net Worth was a strong 10.8%. This translates to success and health.
With these results as a starting point and with the economy doing well, we were projecting a banner year for 2020 complementing our 50th Year Anniversary celebration. Then in March, the floor dropped out from under everyone. The Federal Reserve dropped rates to the lowest since the Financial Crisis of 2008, schools and businesses were closed, millions laid off, tenant and borrower protections and deferrals put in place, a healthcare system swollen to bursting levels and words and terms such as COVID, self- Quarantine, shelter in place, swabs, PPE and PPP became common. Everything came to an unprecedented halt.
As the Greater Metropolitan New York area and the country move gingerly towards normalcy, the development and distribution of a vaccine, the Presidential election, a resurgence (or not) of COVID cases and their handling may all dictate how difficult the challenges will be to remain successful this year and ahead.
Your Board of Directors, Volunteers, Management and Staff have always been and continue to be committed to serving this membership. We plan on celebrating our 50th Anniversary (which actually occurs in October 2020) during 2021. We will roll out products, services and campaigns that were suspended this year into next as we navigate through the challenges that lie ahead in order to maintain our financial strength and a safe and sound institution.
We hope for all of our members and families to remain safe and be optimistic over the future!
President & CEO