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2009 Annual Report
76th Annual Membership Meeting - March 30, 2010
MISSION STATEMENT                                                         ...
BOARD OF DIRECTORS                                 Term ends   OFFICERS
 Dr. Jane K. Silva                  Chairman      ...
Statement of Financial Position                                                          Statement of Income and Expenses
...
Asset Growth                       Total Loans Outstanding                          Net Worth Ratio                    Gro...
Annual Meeting Minutes                                                                      March 24, 2009


The Annual Me...
were displaced out of the administrative offices, we needed to be very thankful. Things        He then stated that had it ...
mented that the Credit Union’s performance is rock solid, however, external issues going on   Mr. Tuma expressed his since...
and Four for three-year terms. Dr. Ollie B. Harris seconded the motion. The motion carried.   Clay Strack (Concordia Luthe...
Report from the Chairman
Serving on the Board of Directors for Smart Financial Credit Union is a challenging and        Th...
fund-raising and charitable events throughout 2009. A number of employees, and their           increases and increased fee...
Report from the President
I am pleased to report to the membership that Smart Financial Credit Union remains        We als...
In addition, Smart Financial has enjoyed a long and successful business relationship with     While it is debatable as to ...
Fee Schedule Changes
Loan Accounts All Loan Accounts (Unless otherwise listed)             Single Payment Loans           ...
Primary Checking                                                   Debit MasterCard/ATM Card Services                     ...
Office Locations                                                                         Outlet Locations
Newcastle Office...
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SFCU Annual Report 2010

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Transcript of "SFCU Annual Report 2010"

  1. 1. 2009 Annual Report
  2. 2. 76th Annual Membership Meeting - March 30, 2010 MISSION STATEMENT MEETING AGENDA Provide Superior Service to Every Member Invocation Ascertainment of Quorum VISION STATEMENT Appointment of Recording Secretary Our vision is to be the financial services provider most admired for its people, Welcome and Introduction of Guests performance and innovation. Adoption of Standing Rules STANDING RULES Approval of Minutes of the 75th Annual Meeting Report of the Board of Directors I. Robert’s Rules of Order, Newly Revised, are the governing rules of this meeting. Dr. Jane Silva, Chairman of the Board II. Debate by any one member is limited to two minutes at one time on any motion. Report of the President III. A member may speak only twice on any motion and the second time only after others Mr. Gary Tuma, President/Chief Executive Officer who wish to have been allowed to speak once. Unfinished Business IV. Affirmation and negative views will be recognized alternately, when possible. New Business Report from the Nominating Committee & Election of Directors V. All motions must be submitted in writing, signed by the maker, if requested by the Chairman. Scholarship Presentation VI. The Credit Union Bylaws state that written ballots shall be required for any contested Drawing for Door Prizes position; otherwise, the election may be by voice vote. The nominee receiving a majority Other New Business of the votes cast shall win the election. Adjournment 2
  3. 3. BOARD OF DIRECTORS Term ends OFFICERS Dr. Jane K. Silva Chairman 2011 Gary Tuma Chief Executive Officer Ms. Alys Dore’ Vice-Chairman 2010 Cheryl Davis CUSO CEO Mr. Larry Frazier Treasurer 2011 Linda Webster Executive VP Mr. Arthur M. Gaines, Jr. Secretary 2010 John Greer SVP/Chief Human Capital & Strategy Officer Mrs. Yolande Eugere Director 2009 LeAnn Kaczynski SVP/Chief Financial Officer Mrs. Douthulia Gardner Director 2010 Dana Rawlings SVP/Chief Operations Officer Mr. Jeffrey W. Hamlin Director 2010 Virginia Smith SVP Business Development & Facilities Dr. Ollie B. Harris Director 2010 Michael Warrell SVP Member Services Mr. Samuel Massie Director 2009 Janice Carothers VP Call Center Mr. Michael O’Neill Director 2010 Susan Chapman VP Marketing Strategy Jason Deitz VP Business Development & Facilities Dr. Ralph O. Teter Director 2011 Eric Gnospelius VP Learning & Development Dr. Jean Wren Director 2009 Roger Granad VP Special Projects Dr. William A. Young, Jr. Director 2011 Michael Piwetz VP Chief Information Officer * Mr. John Hoyt Term expired September 2009 Diane Ray VP Controller * Mr. Mark Kline Term expired September 2009 Sandra Robertson VP Collections Joanne Robinson VP Lending & Branch Production AUDIT COMMITTEE Nancy Schwind VP Branch Operations Sandra Torres VP Board Services/Assistant to CEO Mr. Chad G. Greer Chairman Corbin Wilson VP Service Delivery Systems Mrs. Maria Diaz Loretta Wolsey VP Risk Management & Compliance Ms. Ann Petrillo 3
  4. 4. Statement of Financial Position Statement of Income and Expenses ASSETS December 31, 2009 December 31, 2008 INCOME December 31, 2009 December 31, 2008 Cash $21,796,518 $26,046,186 Income on Loans $17,236,212 $17,788,781 Investments 70,661,660 71,674,028 Income from Investments (2,766,957) 1,088,022 Loans 278,140,815 256,323,768 Other Income 13,705,536 13,069,778 Receivables 407,833 13,100,341 Total Operating Income $28,174,791 $31,946,581 Accrued Income 1,701,919 1,595,726 Land 3,586,059 3,586,059 EXPENSES Building & Leasehold Improvements 8,110,017 8,651,047 Salaries & Benefits $12,002,683 $12,491,726 Furniture & Equipment 3,124,277 3,540,155 Travel & Conference 70,992 103,987 Other Assets 13,643,001 6,594,679 Office Occupancy 1,947,602 1,879,942 Office Operations 4,550,582 5,258,202 Total Assets $401,172,099 $391,111,989 Marketing 809,495 855,316 LIABILITIES Loan Services 1,027,655 611,847 Accounts & Drafts Payable $1,787,574 $3,293,958 Professional Servicing 2,851,340 3,051,555 Other Payables 1,764,463 1,886,363 Provision for Loan Loss 2,288,993 1,313,630 $3,552,037 $5,180,321 Interest 217 151 Other Operating Expenses 695,999 177,866 MEMBERS’ DEPOSITS Total Operating Expense $26,245,558 $25,744,222 Member Shares $138,054,322 $132,169,925 Other Member Deposits 232,532,215 225,619,719 INCOME FROM OPERATIONS $1,929,233 $6,202,359 $370,586,537 $357,789,644 Non-Operating Gain (Loss) (154,898) 154,517 Dividends Paid to Members 4,675,537 7,519,361 RESERVES & UNDIVIDED EARNINGS $27,033,525 $28,142,024 NET INCOME ($2,901,202) ($1,162,485) TOTAL LIABILITIES, MEMBER DEPOSITS, & RESERVES $401,172,099 $391,111,989 Footnote: As of December 31, 2009, Smart Financial Credit Union’s investment portfolio included Treasury and Federal Agency Securities classified as avail- able for sale with a book value of $10,028,033. At December 31, 2009, these Treasury and Federal Agency Securities had a market value of $10,079,347. The unrealized gain on these securities was included in the calculation of the Credit Union’s reserves and undivided earnings.
  5. 5. Asset Growth Total Loans Outstanding Net Worth Ratio Growth in Membership 2009 401 7.85 2008 391 8.94 2007 328 9.69 2006 347 8.74 2005 315 8.48 300 325 350 375 400 240 250 260 270 280 7.5 8 8.5 9 9.5 72 74 76 78 80 total assets in millions $ millions percent # share account in thousands 5
  6. 6. Annual Meeting Minutes March 24, 2009 The Annual Meeting of the members of Smart Financial Credit Union was called to order She then commended the staff and management for the wonderful job they performed by the Chairman of the Board, Dr. Jane K. Silva, Tuesday, March 24, 2009, at 7:30 p.m. after Hurricane Ike. She commented that they worked tirelessly to ensure that the Credit at Boy Scouts of America, 2225 North Loop West, Houston, Texas. Union opened for business three days after the storm passed allowing members access Mr. Samuel Massie gave the invocation. The Chair determined that a quorum was present to their funds. Due to damage to the administrative building at Newcastle, dozens of and appointed Mrs. Sandra Torres as Recording Secretary. employees were displaced. This meant employees shared desks, computers and cramped work spaces. Many worked from their homes for more than six months. Dr. Silva thanked Dr. Silva welcomed members to the 75th Annual Membership Meeting and introduced the employees for their flexibility, patience and effort during this difficult time. All at- the persons seated at the head table and special guests seated in the audience. Dr. Silva tendees applauded. then introduced the Board of Directors and Audit Committee members of Smart Financial Credit Union. Dr. Silva thanked everyone for their continued support. Dr. Silva referred to the Standing Rules as printed in the Annual Report and requested Mr. Gary Tuma, President and CEO, welcomed the members to the 75th Annual Member- adoption of the Standing Rules as distributed. Dr. Ollie B. Harris moved, Mr. Jeffrey W. ship Meeting. He commented that in 1934 a small group of teachers came together and Hamlin seconded that the Standing Rules be adopted as presented. The motion carried. decided to organize a credit union. Seventy-five years is quite a milestone and SFCU continues to grow and serve more members each year. The Chairman then referred to the printed minutes of the March 25, 2008 Annual Meet- ing contained in the Annual Report and asked for any corrections. There were none. Mr. Tuma then noted that last year in March 2008 he reported that 2007 was a good year, however, 2008 and 2009 would be challenging. He stated that when he made Dr. Silva then commended the Board members, management, and staff for striving to these comments last year he knew that economic trends were headed in the wrong direc- provide superior service not only to members but each other as well. She then called tion. He added that he certainly did not foresee Hurricane Ike and the significant damage attention to the written Report of the Chairman of the Board of Directors and reviewed we would sustain from that disaster. Mr. Tuma noted that even though many employees highlights of the year. 6
  7. 7. were displaced out of the administrative offices, we needed to be very thankful. Things He then stated that had it not been for several external events we would have had a year could have been much worse and many have suffered far greater damage and are still that performed very close to our budget prepared in October of 2007. The merger with trying to recover from Hurricane Ike. Key FCU impacted us from an accounting standpoint. Prior to the merger, the Key Board Mr. Tuma spoke briefly on the economy. He reported that SFCU is still a financially strong of Directors had approved a special dividend to their members which represented ap- and stable organization. He noted that members should be proud that their credit union proximately $1 million in anticipation of merging their credit union into SFCU. He added did not participate in sub-prime loans and investments that contained sub-primed loans that this $1 million came out of Key FCU’s retained earnings, however, this required in years past adding that this is still true today. SFCU reflect that $1 million as a dividend expense once the merger was completed. This $1 million in dividends had to be recognized in 2008 which was not contained in the SFCU had a tremendous year as it related to our core operations. The total loans gener- original budget. ated through all channels in 2008 far surpassed any previous year. Over $144 million was disbursed to members. We enjoyed another strong year of membership and deposit growth. Another event that impacted SFCU was our relationship with Town North Bank (TNB) We completed a merger with Key Federal Credit Union, combining the assets of a smaller, in Dallas, Texas. TNB is the transactions processor for our credit and debit program as but very successful credit union with SFCU. The process of joining together two institutions well as serves approximately 500 credit unions across the U.S. Mr. Tuma added that we with thousands of members is a difficult process and takes a lot of planning and coordina- have had a long-term relationship with TNB and each year over the past ten, we have tion. We have marvelous staff that worked hard to make it a successful transition. averaged an approximate 10 percent return on our investment in the processing bank. In 2008 TNB was impacted like most of the national banks in our country in that many of Mr. Tuma then stated that we had just completed the merger and were in the process the investments they held contained mortgage loans that did not perform. Some of the of training the Key personnel on our data processing system when Hurricane Ike hit. The losses that had to be recognized at TNB were passed through to us as shareholders. This Key employees started doing business as SFCU with one day’s training. He added that we was another extraordinary situation in 2008. accomplished many things in spite of the hurricane and damage we sustained. The combination of Hurricane Ike, the investment impact from TNB and the Key dividend Mr. Tuma commented that 2008 was a tough year for financial institutions. In tough created a net operating loss of $1.2 million. Mr. Tuma corrected what was printed in the economic times, loan delinquency and charge-offs typically escalate significantly. He was annual report ($2 million). happy to report that we continue to see exceptional performance on our loans. Delinquen- cies and loan losses are well below peer statistics, and most importantly, have remained Mr. Tuma stated that this was the 20th Annual Membership meeting that he has spoken to flat over the course of the past year. members and the first time he has reported any kind of net loss for the year. He then com- 7
  8. 8. mented that the Credit Union’s performance is rock solid, however, external issues going on Mr. Tuma expressed his sincere gratitude to the Board of Directors and Audit Committee within the economy are making it very difficult on every business in this country. adding that these volunteers give so much of their time to represent the members. Mr. Tuma then commented on results for 2009. He briefly explained the Corporate Credit Mr. Tuma thanked the members for their continued support and allowing Smart Financial Unions, a group of 28 processing centers which are spread across the United States. to be their financial services provider. These processing centers are sources of liquidity, credit, and processing services for mem- Dr. Silva asked if there was unfinished business from the last Annual Meeting and stated ber credit unions. He continued to explain that SFCU and all of the credit unions in the Chair knew of none. Houston are members of the Corporate Credit Union in Dallas, Texas. SFCU does its check processing through this Southwest Corporate Credit Union. He added that even though Dr. Silva then asked Ms. Alys Dore’, Vice Chairman, to conduct the Board of Director elections since her position was up for re-election. Ms. Dore’ then read the Explanation of the Election SFCU had no investments with residential mortgages, investments were made by the Process and introduced Dr. Jean Wren, 2009 Nominating Committee Chair. Dr. Wren intro- Corporate Network. This had no impact on Smart in 2008 but will be something we will duced the Nominating Committee members and reported for the Committee. The Commit- deal with in 2009. It will require all federally insured credit unions in the United States tee placed the following slate of nominees before the membership for their consideration: put more money into the insurance fund to stabilize the Corporate Network and cover the anticipated losses in the investment portfolios this year. He noted that regardless of the POSITION NAME LENGTH OF TERM amount of money we have on deposit in Southwest Corporate, every dollar of our money 1 Dr. Ralph O. Teter 3 Years is insured by the federal government. 2 Dr. Jane K. Silva 3 Years Mr. Tuma stated that a lot of information had been covered, but he felt compelled to share 3 Dr. William A. Young, Jr. 3 Years this information with the members and give it in such a way they could understand that 4 Mr. Lawrence Frazier 3 Years we are highly engaged and working to protect SFCU. He added that we are a very well capitalized institution and these things do not threaten the Credit Union, but we are in a Ms. Dore’ thanked the Nominating Committee for their work and introduced the nominees. tumultuous time in the financial world. He noted that we continue to see strong growth, and She then reported that no nominations by petition had been received for Positions One, good performance with earnings the first two months of the year well ahead of budget. Two, Three, and Four, therefore election for these positions may be held by voice vote. Mrs. He then thanked the staff and management team of Smart Financial Credit Union for Yolande Eugere made a motion for election by acclamation for Positions One, Two, Three, their hard work and dedication serving our members with superior service. 8
  9. 9. and Four for three-year terms. Dr. Ollie B. Harris seconded the motion. The motion carried. Clay Strack (Concordia Lutheran High School) Ms. Dore’ then congratulated the re-elected Board members. Kathryn Thomas (Cypress Creek High School - Cy-Fair ISD) Mr. Tuma then stated that for the last nine years, Smart Financial has presented $10,000 Whitney Van Alstyne (Conroe High School/Academy for Science & Health Professions - in scholarship funds to deserving high school seniors. Mr. Tuma added that now in our tenth Conroe ISD) year, the scholarship program continues to grow and has become a staple of our dedication Jennifer Whorton (Montgomery High School - Montgomery ISD) to education. In 2003 the scholarship program was renamed in honor of Mrs. Ruby Sue Mr. Tuma congratulated all of the scholarship recipients and wished them the best of luck Clifton as a lasting tribute to her unmatched devotion to education. The funds for these with their future educational endeavors. scholarships are raised through our Annual Ruby Sue Clifton Scholarship Golf Tournament. Mr. Tuma then introduced Smart Financial Resources services providers and special Mr. Tuma introduced the Scholarship Committee and expressed his appreciation for their guests. Mr. John Greer, Senior Vice-President of Human Resources, conducted the draw- work. Scholarships will be awarded as a one-time disbursement to each recipient in the ings for door prizes. amount of $1,000. Funds are awarded by SFCU to the school of the recipient’s choice upon evidence of full-time enrollment. The recipient must be planning to attend an accred- Dr. Silva asked for any other new business, and hearing none she expressed her apprecia- ited 4-year college or university, 2-year community college, trade or vocational school. tion to the membership for attending and adjourned the meeting at 8:48 p.m. The following were recognized as the 9th Annual Ruby Sue Clifton Scholarship Recipients. Dr. William A. Young, Jr., presented checks to: Ben Donahoo (The John Cooper School) Shara Hoffmann (Willis High School - Willis ISD) Arthur M. Gaines, Jr., Secretary, Board of Directors Jennifer Manuel (Monsignor Kelly Catholic High School - Beaumont ISD) Michael Miller (Lamar High School - Houston ISD) Genoveva Perez (Conroe High School - Conroe ISD) Lucretia Stanfield (Barbara Jordan High School for Careers - Houston ISD) 9
  10. 10. Report from the Chairman Serving on the Board of Directors for Smart Financial Credit Union is a challenging and Through the hard work of the Credit Union and the dedication and loyalty of our mem- rewarding opportunity. It takes a team effort among a talented group of individuals on bers, in 2009 we were able to meet these challenges head-on. The results were very the Board, an outstanding Management team, and a dedicated, hard-working staff that positive! With a record number of checking accounts opened, record loan volume, a allows this great Credit Union to succeed and continue to grow. It is my pleasure to make record number of credit cards and highest share balance in our history, Smart Financial my report to you as Chairman of the Board. recognizes that the future is bright! Without a doubt, 2009 was an interesting year. Globally, we saw the widespread H1N1 Smart Financial continually implements strategies that will enhance the value of member- Flu pandemic affect millions of people worldwide and continued civil unrest in many ship through program improvements. One great example of this is the improvements to our countries. Nationally, we experienced the continuation of the worst economic collapse debit card program that were implemented in 2009. Many of these improvements were since the Great Depression. Locally, we saw the continued recovery efforts from Hur- designed to help streamline processes behind the scenes, while others greatly enhanced the ricane Ike that affected us greatly at the end of 2008. Smart Financial was able to move convenience for Smart Financial’s Debit MasterCard holders. Probably the most recognizable forward in spite of this global, national and local turbulence and maintained a strong and most impactful of these changes for our members is the move to instant issuance of financial position. our debit cards. Debit cards are now issued to the member instantly upon account opening The economic crisis that has impacted our country for the past couple of years set the at most of our locations. This allows instant access to your accounts while adding the safety stage for a difficult environment for both consumers and financial institutions alike. Smart of not having the card sent through the mail. It’s just one example of how Smart Financial Financial has been challenged to deal with the external impacts of the economy while works in ways to serve you, the member/owner, better. continuing to provide our members with products and services that meet your financial The Board, Management and staff at Smart Financial are not only dedicated to serving needs. Consumers continue to work to reduce debt loads and restructure their finances. the members, but the community as well. Smart Financial participated in a variety of 10
  11. 11. fund-raising and charitable events throughout 2009. A number of employees, and their increases and increased fees are causing many consumers to overpay greatly for their families and friends, participated in the Komen Houston Race for the Cure® to help raise credit card balances. Educating our members that switching to the nationally-recognized money for breast cancer research. Many fundraisers were also held throughout the year credit card from Smart Financial will help provide our members freedom from unneces- to raise money for the main Credit Union charity, Children’s Miracle Network. Through sary fees and charges. these efforts and the generous donations by employees and members, Smart Financial This spring, we will be unveiling a new, revamped Credit Union web site. This interactive was able to donate over $3,500 to Texas Children’s Hospital. Another effort saw SFCU site will continue to provide members with valuable information about Smart Financial employees and members donate a variety of school supplies and cash donations. The 2nd and our products and service. However, the navigation will be streamlined, a Lending Annual School Supply Drive was aimed at helping school districts, around each of Smart Center will provide easier access when applying for loans, designated sections will be de- Financial’s 16 office locations, replenish their school supply needs during the school year. signed for our Education and Medical professionals, and financial education information Lastly, but certainly not least, fundraisers throughout the year including an annual golf will be made easily available. Be on the lookout for this new web site soon! tournament and a very popular candy sale helped raise funds for the Ruby Sue Clifton We understand that you have the freedom of choice when selecting your financial institu- Scholarship Program. Over the first ten years of this program, one hundred graduating tion. We are committed to creating a Credit Union that continues to earn your member- high school students have been awarded $100,000 in funds to help them further their ship. On behalf of the Board of Directors, Management and Staff of Smart Financial education. Tonight, we will award ten more students another $10,000 to continue that Credit Union, thank you for your continued support. dedication to education. Take pride in the fact that you are part of a Credit Union that supports our community! Sincerely, As we look forward to 2010, Smart Financial will continue to work on ways to become more efficient and to educate our members. Creating efficiencies will introduce opportunities for expense reduction and improving service, thus, adding value to your membership. At Smart Financial Credit Union, Membership Equals Freedom! We relish the opportunity to educate our members on ways to gain more financial freedom. For example, new regu- Dr. Jane Silva, Chairman lations have greatly impacted the credit card programs of many banks and issuers. Rate 11
  12. 12. Report from the President I am pleased to report to the membership that Smart Financial Credit Union remains We also had record growth in the number of checking account relationships opened financially strong; well capitalized and positioned to weather the remaining economic in 2009. This helped us keep our deposits growing to meet the borrowing demand of challenges we face in 2010. our membership. Without a doubt, 2008 & 2009 were the two toughest years we have faced since the However, also much like 2008, the credit union industry was impacted by the deterio- Great Depression. From Wall Street to Main Street, the near collapse of our economy has rating economy in several different ways. The nationwide network of “corporate credit impacted all of us. We look forward with some optimism for continuing improvement in unions” has served our industry well for many, many years. This network provides the housing, employment and financial services sectors. This is not to say however that transaction processing, settlement, liquidity and other services to the approximately challenges do not remain. By all accounts, the recovery will be slow and prolonged. 8,000 “natural person credit unions” in the U.S. These specialized credit unions gen- Much like 2008, your Credit Union produced strong results from our internal (core) erated earnings from investments in mortgage backed securities and these securities operations. SFCU granted a record $168.85 million in loans to our members last year. lost much of their value due to the housing crisis. The corporate credit unions have This loan activity was generated by approving almost 17,000 loans for a variety of federal deposit insurance through the National Credit Union Share Insurance Fund purposes – new/used autos; home equity and mortgages; credit cards; small business; (NCUSIF); the same Federal Agency that provides deposit insurance to natural person and personal loans to name a few. credit unions, like Smart Financial. The quality of the loan portfolio remained extremely high in 2009, with delinquencies As losses accumulated in the corporate network and a number of natural person credit and loan losses at industry lows. At year-end, outstanding loans totaled approximately unions in areas where housing prices collapsed, it became necessary for all credit unions $280 million. Loan delinquencies were .35% of total loans – again, stellar performance to put additional monies into the share insurance fund. The funding provided by credit in our underwriting and collection departments. unions kept the NCUSIF strong and viable. 12
  13. 13. In addition, Smart Financial has enjoyed a long and successful business relationship with While it is debatable as to when sustainable growth in the economy and investment Town North National Bank, located in Dallas. Town North provides credit and debit card markets will return, I am excited about the future at Smart Financial. After all, credit processing services for hundreds of credit unions in Texas and across the U.S. TNB also unions were born in the U.S. out of the financial collapse during the Great Depression. had significant investments in the mortgage backed securities market. Losses in these It is our time to ‘shine’ as a true example of the cooperative spirit. Smart Financial has securities resulted in write downs of Smart Financial’s investment in the Bank. These been here, serving members for over 75 years. We remain financially sound, viable and losses impacted the Credit Union in 2008 and continued through 2009. positioned for continued growth for 2010 and many years to come. The combined effects from these relationships produced almost $5 million in extraordi- I would like to give a special thank you to our volunteer Board of Directors and Com- nary expense for Smart Financial during the year. This exceeded our earnings by approxi- mittees, as well as the outstanding employees who strive to provide you with Superior mately $2.9 million. The net loss reduced our total reserves to just over $27 million. Service every day. While these results are certainly not desirable, the strength of our capital position prior Finally, thank you for your outstanding support of Smart Financial. You own this out- to the last two years enabled us to weather these losses and remain in a solid financial standing organization and it is my honor and pleasure to serve as President/CEO. position. Under the regulations issued by the National Credit Union Administration, a credit union is considered “well capitalized” if the capital ratio is above seven (7%) Sincerely, percent. At year-end 2009, SFCU had a ratio of 7.85%, well above the minimum to be considered well capitalized. As I noted earlier in my comments, the economic challenges will persist for some time to come, but I would like to report that Smart Financial’s exposure to future losses from either the corporate credit union network or Town North Bank has been dramatically Gary Tuma, President/CEO reduced. While periodic assessments to maintain the strength of the National Credit Union Share Insurance Fund are anticipated (and necessary to maintain a strong deposit insurance program), I do not anticipate these levels of loss from our business relation- ships in 2010. 13
  14. 14. Fee Schedule Changes Loan Accounts All Loan Accounts (Unless otherwise listed) Single Payment Loans TRUTH-IN-SAVINGS FEE SCHEDULE Loan Late Charge - 5% of monthly installment if 10 or more days Loan Late Charge - $25 if 10 or more days late Share (Savings) Accounts late (Minimum of $5, Maximum of $30) Withdrawals - Two (2) Free Per Calendar Month, Thereafter - $2 All Credit Cards including MasterCard, MasterCard Collection Agency Fees - all costs of collecting the amount you Gold, Visa Classic, Visa Gold, Visa Platinum & Platinum each (Waived with deposits $3,000+) owe including court costs MasterCard Collection Attorney Fees - all costs of collecting the amount you Holiday Club Accounts Annual Fee - none owe including court costs and reasonable attorney fees Withdrawals Between March 1st And October 31st - $10 each Minimum Finance Charge - not applicable Returned Check Fee - $28 if a check is returned on a loan payment * Transaction Fee for Purchases - not applicable Vacation Club Accounts Application Fee After 3 Denials Within a 12 Month Period - $20 Transaction Fee for Cash Advances - not applicable Withdrawals Between September 1st And April 30th - $10 each Collection Items - $20 each, Foreign Items - $30 each Over Credit Limit Fee - $10 Research and Reconciliation - $25 per hour (I hr. minimum) with Money Market Accounts $2 per page printed Late Payment Fee - 5% of minimum payment if 10 or more days late Minimum Balance Fee - $10 per month - with balance below Statement Copied - $3 each Returned Check Fee - $28 if a check is returned * $2,500 (Money Market Plus Account Only) Transaction History (90 days) - $3 each Transfer Limitations Violation - $10 per item Document Copied - $3 each Insufficient Check (NSF) - $28 per item * Balance Inquiry - $5 each (free through SmartLine) Checking Accounts - All Checking Accounts Telephone Transfer - $3 each (free through SmartLine) Loan Payoff Letter - $5 Insufficient Check (NSF) - $28 per item (paid or unpaid) * Skip Payment and Extension Fee - $25 each * Temporary Checks (8) - $4 (No Charge For Starter Checks) Stop Payment Order Per Series of 25 Checks - $28 CreditLine (Line of Credit) Check Printing Fees May Vary Over limit Fee - $10 Overdraft Protection Draw Fee (transfers over $25 per day only) - $2 * 14
  15. 15. Primary Checking Debit MasterCard/ATM Card Services Wire Transfers - Outgoing Domestic - $20 each Minimum Daily Balance to avoid Monthly Service Charge - $400 Transactions With a Smart Financial Credit Union Card at SFCU Wire Transfers - International - $40 each owned ATM's - No Charge Notary Services (Non Member) - $6 Monthly Service Charge - $4 per month Transactions With a Smart Financial Credit Union Card at other Cashiers Checks (Non Member) - $10 Superior Checking (Interest-Bearing) ATM locations - $1.25 each * Verification of Deposit (written - other than SFCU mortgages) - $15 Minimum Average Daily Balance to Avoid Monthly Service Replacement Debit MasterCard/ATM card - $5 each Research and Reconciliation - (1 hour min. - $2/page) - $25 Charge - $1,000 or 55+ years of age Surcharge (terminal fee) free ATM's - Allpoint and Credit Union Stop Payment Order - $28 each * Monthly Service Charge - $10 Friendly Network locations Overnight Delivery - $25 Currency Conversion Fee (Debit MasterCard Transactions) - 1% Smart Chance Checking of transaction amount * Statement Copied - $3 Monthly Service Charge - $10 Paid Check Copied - $3 Safe Deposit Box Service (available at our Newcastle, Collection Items - $20 each Debit Card Daily Limit - $100 Conroe & Sugar Land offices only) Account Transition Fee - $25 Foreign Collection Items - $30 each Key Deposit - $25 Insufficient Debit MasterCard Transaction - $28 each * No Check Checking Box Size 3" x 5" - $25 annually * Cashier's Checks payable to Third Party - $3 Monthly Service Charge - $5 Box Size 5" x 10" - $60 annually * Tax Levies and Garnishments - $35 Debit Card Daily Limit - $50 Box Size 3" x 10" - $40 annually * Incorrect Address Fee - $10 Box Size 10" x 10" - $95 annually * Check Cashing Fee Coin Sorter Fee (except 16 and under) - 5% of amount sorted * Members with less than $1,000 in aggregate deposit and/or loan Other Service Fees (applicable to all accounts) Closed Membership/Account (within the first 6 months) - $25 balances will be assessed a $15 check cashing fee. Members with Insufficient ACH Debit - $28 each * Inactive Account Fee - $10 per month (excluding minor, custodial, less than $1,000 in aggregate deposit and/or loan balances will Returned Deposit Item - $28 per item * and CAP) * be excluded from the $15 check cashing fee if the member is less Lost Title Fee - $15 * Fees changed during 2009 than sixteen years of age (minor) or in the College Advantage Program. Account Inquiry/Transactions by phone - $5 each * Document Copied - $3 each IRA Transaction History (90 days) - $3 each Closing / Transfer Out Fee - $10 Money Orders - $2 each 15
  16. 16. Office Locations Outlet Locations Newcastle Office Kingwood Office North Loop Office St. Joseph Medical Center CHRISTUS St. Mary 4605 SW Freeway, Suite 100 1120 Kingwood Drive 1249 North Loop West 1315 St. Joseph Parkway, Suite 302 3600 Gates Boulevard Houston, Texas 77027 Kingwood, Texas 77339 Houston, Texas 77008 Houston, Texas 77002 Port Arthur, Texas 77642 FM 1960 Office The Woodlands Office Sugar Land Office Debakey VA Medical Center CHRISTUS St. Patrick 520 FM 1960 East 27708 I-45 North 9810 Highway 90A 2002 Holcombe Boulevard 1600 Foster Street (at Imperial Valley) (in The Woodlands Plaza) Sugar Land, Texas 77478 Houston, Texas 77030 Lake Charles, Louisiana 70601 Houston, Texas 77073 Conroe, Texas 77385 CHRISTUS St. John Hospital CHRISTUS St. Frances Cabrini Bingle Office Conroe Office Wayside Office 8582 Katy Freeway, Suite 101 18300 St. John Drive 3311 Prescott Street, Suite 117 3201 West Davis 4411 South Wayside Drive Houston, Texas 77024 Nassau Bay, Texas 77058 Alexandria, Louisiana 71301 Conroe, Texas 77304 Houston, Texas 77087 CHRISTUS St. Elizabeth 2900 North Street, Suite 402 Beaumont, Texas 77702 SmartLine 713-850-1254 1-800-537-7133 Member Services 713-850-1600 1-800-392-5084 www.smartcu.org
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