The Board of Directors' and President's Report
Since it was chartered in 1948, Alaska USA’s mission has been to provide financial services to members, affordably, conveniently and professionally. Throughout the credit union’s 71 years of operations, it has remained true to its original purpose of providing members a safe place to save and earn highly competitive rates on savings and, at the same time, an available source of low-cost credit.
In 2019, the credit union set new records for membership, deposits, loans, net worth, assets, and net income. At year end, assets totaled $8.336 billion with net worth of $791.8 million, and the credit union membership totaled 678,527.
Better than Banking
In terms of financial performance, 2019 was one of the most successful years in the credit union’s history. At the same time, the credit union expanded and enhanced services and processed a record 455 million transactions and 92,827 new loans totaling over $6.605 billion. The majority of this loan volume was consumer loans as the credit union continued to expand its market presence in Arizona, Washington and the high desert region of Southern California.
As a member-owned cooperative, Alaska USA transfers value to members by providing services more cost effectively than other financial organizations. To measure the credit union’s success in this regard, the value transferred is rigorously calculated based on the dollar benefit Alaska USA members receive from higher rates on deposits, lower loan rates, and lower fees compared to those of competing banking institutions. We are pleased to report that this value transfer to members in 2019 was $122.82 million, an approximate return of $181 per member.
People Helping People
In addition to returning profits back to the members, Alaska USA is committed to serving the communities in which members live, work and attend school. Through corporate giving and community support programs, Alaska USA contributed $706,060 to non-profit organizations in more than 50 distinct communities. Employees separately donated over $28,034 to the United Way in 2019. Charitable contributions weren’t limited to the credit union and its employees; credit union members donated over $93,500 to local food banks in the annual “Cash for Cans” food drive and an additional $51,300 to the Alaska USA Foundation, an organization that directly funds needs-based services to children, veterans, and active duty members of the armed services. While financial support of non-profit organizations is incredibly important to the co-operative mission of the credit union, Alaska USA employees in Alaska, Arizona, California, and Washington also volunteered more than 2,980 hours supporting organizations they are passionate about.
As financial security is a cornerstone of a strong society, 1,135 school-aged children took part in Alaska USA financial literacy courses, and 1,079 high school students participated in financial reality fairs presented by credit union staff. Lastly, we hosted numerous retirement, Social Security, and Medicare seminars ensuring members are financially prepared for major life events.
SERVICE FIRST
In terms of service, numerous enhancements were made during the year to make the credit union more convenient for members. At year end, the credit union operated 74 branches, which includes eight financial centers in four states as well as a 24/7/365 contact center.
Another way the credit union measures its success in serving members is to conduct regular surveys asking members their opinion about the level of service the credit union provides. This member service survey has been conducted each month for the last 21 years. In 2019, the survey responses revealed the highest levels of member service satisfaction ever recorded. In addition, the credit union was again selected by consumers as the favorite financial institution in several separate communities that we serve, including the four largest market areas in Alaska.
We are confident that Alaska USA’s experience, sound business philosophies and practices, and strong financial foundation position the credit union well to meet the many challenges and opportunities that lie ahead. We are certain that Alaska USA’s 72nd year of operation will be another year of success in serving members’ financial needs.
We want to thank the membership for their seven-plus decades of support and participation in the credit union. We also want to congratulate and thank the volunteer officials and all the employees for their service to members and contributions to Alaska USA in 2019.
|
Bobby W. Alexander Ronald E. Lee Geri M. Wacker Kent B. Berthiaume Richard F. Hawley Lorran J. Skinner RaeDene K. Turner Geoff Lundfelt |
Chairman 1st Vice Chairman 2nd Vice Chairman Secretary-Treasurer Director Director Director President and CEO |
Commitment to Members
"Loans are much more than an investment for the credit union, they’re a commitment to a legacy of faith in members going back more than 70 years.”
Wayne Bailey, Executive Vice President and CXO
As a financial institution, Alaska USA thrives when members find financial success. The credit union helps members achieve financial wellbeing through a comprehensive portfolio of products and services, thoughtful, skilled, and well-trained professionals, and by ensuring members receive services for less than they might elsewhere.
Alaska USA prides itself on a knowledgeable employee workforce. Across the organization Alaska USA has accredited financial advisors and insurance brokers who are experts in all facets of the coverage they research for members, experienced mortgage loan originators with Certified Military Housing certification, and a dynamic executive staff with years of experience in working directly with members.
KEEPING MEMBERS ENGAGED WITH ALASKA USA
As more and more members take their financial lives online, the internet and social media have become essential platforms to immerse members in both financial education and the multitude of ways that being part of a credit union benefits them. In 2019, the Alaska USA Learning Center published 29 new articles on a variety of topics raging from small business funding and savings tips, to safeguarding personal information and retirement planning.
CONNECT WITH US
Alaska USA’s social media presence has emerged as a vital tool to maintain communication with members. In 2019, alaskausa.org saw an 8% increase in website visitors from social media outlets, thanks in large part to campaigns encouraging members to to interact with both the credit union and fellow members by sharing financial wellness tips, and to follow Alaska USA to stay informed about products, services, and events.
Better than Banking
Alaska USA reinvests in members, providing better products and services for less.
MEMBERSHIP
14,025 / 2.11%
Increase oVER prior year-end
ASSETS TOTALED
$ B
$685.59 / 8.96%
Increase in millions over prior year-end
LOANS TOTALED
$ B
5.25%
Increase over prior year-end balances
VALUE TRANSFERRED
$ M
$181
Amount per member
We Are Where You Are
The benefits of Alaska USA membership follow you wherever you go.
74
BRANCHES IN 4 STATES
24/7
MEMBER CALL SUPPORT
5,000+
SHARED BRANCHES
55,000+
NATIONWIDE SURCHARGE-FREE ATMs
Commitment to Community
Healthy communities benefit everyone. Alaska USA’s commitments extend beyond members and into the communities we serve. Through financial donations and volunteerism, Alaska USA supports a wide variety of charitable organizations and non-profits.
Armed Services YMCA
Alaska USA honors its deep military roots by supporting organizations like the Armed Services YMCA, which provides specialized programs and services focused on building resilient military families that can thrive under the immense challenges they face.
Kids Day
Alaska USA is the primary sponsor of Kids Day, an annual event focused on family fun and celebrating youth. 80 youth-serving organizations provide no-cost programs and a day of fun activities, including free access to the Alaska Zoo courtesy of Alaska USA.
United Way
In 2019, Alaska USA employees raised $28,034 to benefit the United Way. Funds were used to help families become financially stable, to prepare kids for future success in life and work, and to connect families with affordable healthcare options.
CHILDREN’S MIRACLE NETWORK
Contributions from Alaska USA helped fill the financial gap in funding for some of the more than 10 million sick and injured children that visited a children’s hospital in 2019.
Financial Reality Fairs
Financial education begins with a strong foundation in personal finance and budgeting. Alaska USA provides financial education programs and supports the credit union community’s Get Real Financial Reality Fairs to help youth participants understand how short-term financial choices can have long-term implications. In 2019, Alaska USA employees volunteered to coach over 2,215 students through real life scenarios and events to prepare them for the future.
GOVERNMENT SHUTDOWN ASSISTANCE
The government shutdown, which was referenced in the 2018 annual report, continued into the first quarter of 2019 and created financial hardship for many members. The credit union responded by offering financial support in the form of loan payment assistance and extensions, waiving or adjusting certain fees, and special signature loans to help affected members through the shutdown.
It’s About Community
Supporting the people and organizations that are passionately dedicated to improving our communities.
$706,060
NON-PROFIT CONTRIBUTIONS
$93,500
FOOD BANK DONATIONS
2,980
VOLUNTEER HOURS
Supervisory Committee Report
The credit union’s Supervisory Committee is comprised of five volunteer members who function as the credit union’s audit committee. It is the Committee’s responsibility to ensure that internal controls are effectively maintained; accounting records and reports are promptly prepared and accurately reflect the results of operations; the operation of the credit union is in accordance with the policies and procedures established by the Board of Directors; and member account inquiries are promptly and fairly considered. Your Supervisory Committee has fulfilled these responsibilities during the past year as follows:
Retained Crowe Horwath, a certified public accounting firm, to conduct the credit union’s annual audit;
Worked with the credit union’s Internal Audit department to ensure that internal controls were maintained;
Responded directly to members with account inquiries;
Completed a random sample verification of member account balances and of closed accounts through direct correspondence; and
Met regularly, and as required, to consider matters that were within the Supervisory Committee’s area of responsibility.
It is our opinion that the enclosed financial statements fairly and accurately reflect the financial condition of Alaska USA Federal Credit Union on December 31, 2019, and that the credit union operates and is managed on a sound basis, in accordance with current federal regulations.
|
Craig S. Wood Catherine M. Woods John K. Hogue Thomas E. Holder Sarah M. Warrington |
Chairman Secretary Member Member Member |
Consolidated Statements
of Financial Condition
ALASKA USA FEDERAL CREDIT UNION AND SUBSIDIARIES
December 31, 2019 and 2018
(Dollars in thousands)
| 2019 | 2018 | |
|---|---|---|
| ASSETS | ||
| Cash and due from financial institutions | $ 115,961 | $123,691 |
| Interest bearing deposits in other financial institutions | 95,709 | 93,517 |
| Securities purchased under agreement to resell | 390,000 | 395,404 |
| Total cash and cash equivalents | 601,670 | 612,612 |
| Investment securities available for sale | 699,441 | 324,947 |
| Member Loans | ||
Loans to members, net of allowance for loan loss of $46,133 and $48,579 as of December 31, 2019 and 2018 |
6,454,834 | 6,195,684 |
| Real estate loans held for sale | 150,526 | 80,179 |
| 6,605,360 | 6,275,863 | |
| Deposit in National Credit Union Share Insurance Fund | 66,394 | 62,605 |
| Federal Home Loan Bank stock, at cost | 9,180 | 8,677 |
| Accrued interest receivable | 22,350 | 19,755 |
| Other receivables | 8,454 | 13,747 |
| Premises and equipment, net | 186,280 | 192,292 |
| Assets acquired in liquidation of loans, net | 4,609 | 5,047 |
| Goodwill and intangible assets, net | 5,861 | 6,410 |
| Mortgage servicing rights | 46,888 | 43,977 |
| Net pension asset | 61,340 | 67,552 |
| Other assets | 17,862 | 16,606 |
| Total assets | $8,335,689 | $7,650,090 |
| LIABILITIES AND MEMBERS’ EQUITY | ||
|---|---|---|
| Liabilities | ||
| Members’ share accounts | $7,528,212 | $6,957,234 |
| Accrued expenses and accounts payable | 135,656 | 117,143 |
| Total liabilities | 7,663,868 | 7,074,377 |
| Members’ equity | ||
| Statutory reserves | 42,658 | 42,658 |
| Undivided earnings | 749,149 | 677,898 |
| Accumulated other comprehensive loss | (119,986) | (144,843) |
| Total members’ equity | 671,821 | 575,713 |
| Total liabilities and members’ equity | 8,335,689 | $7,650,090 |
Consolidated Statements of Income
ALASKA USA FEDERAL CREDIT UNION AND SUBSIDIARIES
Years Ended December 31, 2019 and 2018
(Dollars in thousands)
| 2019 | 2018 | |
|---|---|---|
| Interest income | ||
| Interest and fees on member loans | $278,995 | $242,507 |
| Interest on investment securities | 12,838 | 11,343 |
| Other interest income | 11,297 | 9,089 |
| 303,130 | 262,939 | |
| Interest expense | ||
| Dividends on members’ shares | 56,121 | 38,876 |
| Borrowings | 1,710 | 1,689 |
| 57,831 | 40,565 | |
| Net interest income | 245,299 | 222,374 |
| Provision for loan losses | 27,284 | 32,940 |
| Net interest income after provision for loan losses | 218,015 | 189,434 |
| Noninterest income | ||
| Interchange fees | 47,535 | 44,534 |
| Other fees and charges | 37,483 | 41,937 |
| Net gain on sale of real estate loans | 26,280 | 22,828 |
| Net gain on sale of investments | 4,725 | |
| Other | 29,153 | 29,164 |
| Total noninterest income | 145,176 | 138,463 |
| Noninterest expense | ||
| Compensation and benefits | 176,273 | 166,396 |
| Office operations | 53,507 | 27,936 |
| Office occupancy | 28,384 | 22,224 |
| Other | 31,033 | 53,266 |
| Total noninterest expense | 289,197 | 274,822 |
| Net income | 73,994 | $53,075 |
2019 Executive Staff
|
Geoff Lundfelt |
President and CEO |
Wayne Bailey |
Executive Vice President and CXO |
Mike Brady |
Chief Information Officer |
John Cassidy |
Chief Financial Officer |
Jessica Graham |
Chief Risk Officer/General Counsel |
Scott Hansen |
Chief Lending Officer |
Tom Newins |
Chief Operations Officer |
Rachel Norman |
Chief Administration Officer |
Steve Larson |
Executive Director, Mortgage & Real Estate Lending |
Robert McNaughton |
Executive Director, Business & Commercial Services |
Julia Niziolek |
Executive Director, Insurance & Investment Services |
Elizabeth Pavlas |
Executive Director, Retail Financial Services |
Michelle Bradshaw |
Senior Vice President, IM Governance |
Chris Brown |
Senior Vice President, Special Credits |
Scott Chertkow |
Senior Vice President, IM Applications |
Shannon Conley |
Senior Vice President, Branch Administration |
Dan McCue |
Senior Vice President, Corporate Relations |
Phenie Miller |
Senior Vice President, Member Service Center |
Tod Miller |
Senior Vice President, Consumer Lending |
Maria Quick |
Senior Vice President, Accounting and Treasury |
Troy Shelden |
Senior Vice President, Controller |
Brian Spink |
Senior Vice President, Internal Audit |
Bob Thompson |
Senior Vice President, Corporate Properties & Supply |
Tim Woolston |
Senior Vice President, Marketing |
Marci Aguayo |
Vice President, Branch Administration, SW Region |
Vilma Chavez |
Vice President, Commercial Services Administration |
John Collins |
Vice President, Mortgage Operations |
Joe Crosson |
Vice President, Direct Consumer Lending |
Bryce Deeney |
Vice President, Payments |
Leisa DeYarmon |
Vice President, Special Credits Collections |
Holli Frenchik |
Vice President, Consumer Loan Administration |
Cindy Fry |
Vice President, Branch Administration, PNW Region |
Jeff Gregg |
Vice President, Business and Commercial Lending |
Clinton Hess |
Vice President, Financial Analysis |
Doug Horner |
Vice President, IM Operations |
Brenda Lind |
Vice President, Personnel |
Stephanie Maxwell |
Vice President, Digital Channels |
Julie Moore |
Vice President, Mortgage Administration & Compliance |
Laura Moore |
Vice President, IM Applications |
Athar Nazir |
Vice President, Special Credits Operations |
Sharlyn Ruyan |
Vice President, Member Service Center |
Jayson Schmett |
Vice President, Secondary Marketing |
David Vanzant |
Vice President, Enterprise Security |
Sonya Watkins |
Vice President, Branch Administration, AK Region |
Victoria Worley |
Vice President, Operations |