2014 huecu annual report

H A R V A R D U N I V E R S I T Y E M P L O Y E E S C R E D I T U N I O N

HARVARD U

NIV

ER

SIT

Y EM

PLOYEES CREDIT U

NIO

N 7

5T

H A

NN

IVERSARY

Celebrating years2 0 1 4 A N N U A L R E P O R T

75

Harvard University Employees Credit Union aspires

to be a trusted partner in our members’ financial lives. We

add value to membership by offering the best possible

price, the highest quality personal service, and sincere,

sound advice.

The Credit Union seeks to be known as a community

leader and to deepen its long standing commitment to

housing issues, green initiatives, financial literacy and

access to credit for low and moderate income borrowers.

The Credit Union works toward transformational growth

and change without relinquishing the core values we hold

today. We are a not-for-profit cooperative which exists

solely for the best interest of our members. We value

integrity and responsibility in all of our actions. We strive

to enhance our communities and create solutions for

social, environmental and economic issues.

OUR VISION

1939

1940’s 1950’s 1960’s

Credit Union founded June 26 on the top floor of Lehman Hall.

1940 First full-time employee hired at $100/month.

Auto loan limits raised to $800.

1941 HUECU offered Defense Bonds to help fund World War II.

1947 Converted from a Federal to State Charter.

1953 First Direct Deposit received.

1954 First home loan granted.

1956HUECU moves to Grays Hall.

1961Member deposits become insured with the creation of the Massachusetts Credit Union Share Insurance Corporation.

1966The HUECU Board voted to collect $5 from each prospective member before acceptance into the CU, so that each new member would then hold at least one full share.

1970’s

1976HUECU moves to Holyoke Center 5th floor.

1979Current CEO Gene Foley was hired by the Credit Union as a teller.

Gene Foley, 1979

Branch at Grays Hall, 1956

Lehman Hall, 1939

Looking back & moving forward

HUEcU’S joUrnEy

1939 - 2014

1980’s 1990’s 2000’s1981Branch opened in theLongwood Medical Area.

1983

Branch opened at Mass General Hospital.

1993 Credit Cards introduced.

1995

First ATM installed at the Harvard School of Public Health.

1996 Checking Accounts introduced.

1998 HUECU launched its first website.

2001 Online Banking & Debit Cards introduced.

2004 HUECU expands membership to include Alumni and Students.

2006 Harvard Square Branch relocates to 16 Dunster St.

2010’s2011 Branch opened in the Charlestown Navy Yard.

2012 Mobile Banking launched.

2013 HUECU joins CO-OP Shared Branch Network.

2014HUECU celebrates 75 years serving the Harvard community.

Ribbon cutting ceremony at MGH, 1983

First ATM in the Kresge building, 199575th celebration at the MGH Branch, 2014

HigHLigHtS of201 4mEmbErSHip

2,594nEt nEw mEmbErS 2014 43,419

totaL mEmbErS, yEar End 2014

H U E C U A N N U A L R E P O R T 2 0 1 45

6.4%mEmbErSHip

growtH

EfficiEncy

62%of mEmbErS EnroLLEd

in eStatEmEntS

enEwSLEttEr introdUcEd

AS OF 12.31.2014

THROUgH mObiLE CHECk dEPOsiTs

in branch 49%

dECEmbER 2014: FOR THE FiRsT TimE HUECU RECEivEd OvER

online 51%

ACCOUNTs OPENEd

SPrinG 2014

$1,000,000in one month

HigHLigHtS of201 4wHat’S nEw?

6C e l e b r a t i n g 7 5 y e a r s : 1 9 3 9 - 2 0 1 4

$32,001

forEign cUrrEncy pUrcHaSEd

$88,740cUrrEncy rEdEEmEd

nEw: CAsH bACk REwARds CARd The Platinum Rewards MasterCard® gives members cash back every time they shop and bonus points on gas and groceries.

nEw wEbSitE LaUncH In the summer of 2014, we introduced a new online home for the Credit Union, a key step in the continued evolution of the Credit Union online service delivery. The new HUECU website provides enhanced access, expanded capabilities and a streamlined user experience.

moSt popULar cUrrEncy SoLd

eUro 54%

commUnitySUpport for tEam bLakE In response to the Boston Marathon bombing, a group of MGH Blake nurses ran this year’s marathon to raise money for the victim relief fund. HUECU was happy to support their efforts by setting up an account and by making a donation.

HUEcU partnErS witH artLifting Our Harvard Square branch proudly displayed artwork from the non-profit ArtLifting over the summer. ArtLifting is a social enterprise that empowers individuals who are in art groups at hospitals and shelters by selling their artwork.

Financial literacy: First-time Home buying WorksHops Over the past year, over 600 first-time home buyers attended free seminars hosted by the Credit Union.

nEw: FOREigN CURRENCy

nEw fEatUrES incLUdE: • Mobile Responsive Design • Site-wide Account Access • Secure Document Uploader • Extensive Knowledge Base • Interactive Branch & ATM Locator

nEw: CHECkiNg OPTiON FOR TEENs The Varsity Life Account allows teens to develop important money-management skills, while also maintaining parental access to their accounts.

STATE OF THE indUSTry

While the road to economic recovery has been

challenging, our economy exhibited progress in

2014 as the credit union industry experienced

another year of strong performance. U.S. credit

unions’ total assets grew by $60 billion (a 5.67%

increase from December 2013) to finish at just

over $1.12 trillion.

Membership growth was also impressive,

reaching a new high of 99.3 million members,

up 3 million from the previous year.

Despite these increases, the number of credit

unions decreased by 4.29% in 2014, continuing

this figure’s four-decade decline. Profitability

continues to be a challenge as net interest

margins remain on a downward trend. Long-

term interest rate risk can be avoided if credit

unions accept lower returns in the short-term.

OUr COnTinUEd SUCCESS

Harvard University Employees Credit Union

celebrated its 75th anniversary in style last year

with growth rates above the national average

in assets, membership, and earnings. Our

membership growth, in particular, was more

than twice the national average at 6.4%.

Loan growth was the highest in recent years − at

17% with double-digit growth across all loan

categories − we are thrilled to report that 2014

was a record year for HUECU earnings. EnHAnCinG MEMBEr VALUE

HUECU remains abreast of all social and

technological trends and the direct influence

that each has on our members’ ever-changing

needs. Every enhancement we make to our

product offerings and service delivery

is designed to empower our members and

better the HUECU membership experience.

That is why in 2014, we sourced our members’

feedback to construct a new HUECU website

that assures a cross-platform, enhanced

user experience. Updates to our mobile app

brought about major refinements to key

features including quick transfers, bill pay and

mobile check deposits, thereby making the

app more navigable and seamless.

We also introduced foreign currency

services to help our traveling members lock in

competitive exchange rates, have currency on

hand the moment they arrive at their destination

and avoid the security risks associated with

having to exchange currency on their trip.

HUECU has always been a proud purveyor

of sound financial practices within our

community and we believe those practices

are especially effective when instilled in today’s

youth. Our all-new Varsity Life Account was

introduced this year to help teens (ages 13-17)

learn important money-management skills

early in life. This specialized, parent-assisted

account includes a debit MasterCard with

a $300 daily limit and unlimited ATM

withdrawals with up to $10 surcharge refunds

per month from other institutions.

REPORT fROM THE CHAIRMAN & CEO

oUr miSSion

Enhance our members’ lives by

providing trustworthy products

that are easy to understand,

easy to use and best suited to

meet their financial needs.


REPORT fROM THE CHAIRMAN & CEO

MAnAGinG GrOwTH

Despite the struggles that so many institutions

have been faced with in this recovering

economy, we are proud to report that HUECU

has maintained strong, stable growth in our asset

base, capital position and earnings. Although the

economy is still in the midst of a slow recovery, a

notable increase in loan demand is a sign that things

are improving. When we consider this, coupled with

the expectation that the Federal Reserve may begin

raising interest rates this year, we recognize that the

Credit Union is positioned to perform well moving

forward. We will also achieve a significant growth

milestone in 2015, as HUECU will soon surpass $500

million in assets.

PEOPLE HELPinG PEOPLE

Since our inception 75 years ago, the Credit

Union’s enduring success has been a testament

to the strength and character of our community.

The economic challenges of recent years are

evidenced in the diminishing number of American

credit unions, but HUECU continues to prevail

because of our dedicated staff, volunteer Board

and above all, our loyal members. This unwavering

support and cooperative spirit is a constant

inspiration that enables our institution to flourish

even in difficult economic times. 75 years of service

is a wonderful milestone and we are committed to

continuing our success, as well as our tradition of

enriching our members’ lives for many years ahead.

75 YEARS of continUEd

growtH

Eugene J. Foley President & CEO

George white Chairman of the Board


From the very beginning, helping advance the

lives of our members has been the driving mission

of the Credit Union. Through a commitment to

personal service and straight-forward products,

HUECU has seen consistent growth in both

total membership and assets. This increase has

only accelerated over the more recent past with

the introduction of new technologies and the

evolution of our field of membership. As the trend

towards simple and convenient banking continues

to rise, HUECU is poised to continue its success

for many years to come.

T O T A L A S S E T G r O w T H

1 9 3 9 – 2 0 1 4

$0

$400

$200

$300

$100

$500

MiL

LiO

nS

1940 1950 1960 1970 1980 1990 2000 2010 2014

T O T A L M E M B E r S H i P G r O w T H

1 9 3 9 – 2 0 1 4

0

35

15

25

5

45

TH

OU

SA

nd

S

1940 1950 1960 1970 1980 1990 2000 2010 2014

HUECU saw a significant increase in our Home Equity Line of Credit portfolio as the market continues to rebound.

mortgagES to firSt timE HomE bUyErS

93


HomE LoanS

2012

2013

2014

M i L L i O n S

HELOC BALAnCES

$15.1

$9.6

$7.9

Fueled by our seasonal specials, this year we experienced steady growth in our auto loans portfolio.

aUto LoanS

2012

2013

2014

M i L L i O n S

AUTO LOAnS diSBUrSEd

$6.9

$8.2

$9.2of totaL aUto Loan baLancES wErE rEfinancES

43.4%

by tHE

numbers 2014

by tHE

numbers 2014


The introduction of our Platinum Rewards MasterCard® contributed to healthy growth in card balances.

crEdit cardS

2012

2013

2014

M i L L i O n S

CrEdiT CArd BALAnCES

$25.3

$26.7

$31.5

rEwardS pointS EarnEd

88,085,031

Crimson Checking continues to benefit our members as both refunded surcharge fees and overall balances continue to rise.

atm SUrcHargE fEES rEfUndEd

$226,185

cHEcking

2012

2013

2014

M i L L i O n S

CHECkinG ACCOUnT BALAnCES

$57.4

$71.9

$78.1dEbit card pUrcHaSES

$98,719,157

1ST MORTGAGES55%

STUDENT LOANS21%

OTHER4%

AUTO LOANS5%

CREDIT CARDS9%

SECOND MORTGAGES

6%

d E P O S i T d i S T r i B U T i O n

SHARES32%

CERTIFICATES15% MONEY MARKETS

28%

IRAs5%

CHECKING20%

rEport from tHE trEaSUrEr

The Credit Union continued to perform strongly,

posting solid earnings, despite an economic

climate that remained challenging. Assets

increased by 7%, with a year-end total

of $476 million.

Positive growth was realized in all areas

of the Credit Union; membership, loans,

and deposits. Loan quality remained high within

all loan product segments.

As reflected in the unaudited financial

statements, the Credit Union continues

to be a well-capitalized, financially strong

institution where members can feel

confident saving and borrowing.

The Board, Management and Staff

are to be commended for their

contributions to our success.

John T. Litchen Treasurer


L O A n d i S T r i B U T i O n

2010 2011 2012 2013

$100

$0

$200

$300

$400

2010 2011 2012 2013

$100

$0

$200

$300

MiL

LiO

nS

d E P O S i T S O V E r 5 y E A r S L O A n S O V E r 5 y E A r S

2014 2014

MiL

LiO

nS

$400$500

rEport from tHE trEaSUrEr StatEmEnt of condition

aSSEtS 2014 2013

Cash and cash equivalents 31.6 43.1

Investments 70.7 78.3

Loans to members, net 362.7 310.6

Property and equipment, net 1.7 2.5

National Credit Union Share Insurance Fund deposit 4.0 3.8

Other Assets 5.5 4.4

Total Assets 476.2 442.7

LiabiLitiES and mEmbErS’ EQUity

Liabilities

Members’ shares 428.8 400.4

Borrowed funds 0.0 0.0

Accrued expenses and other liabilities 6.8 5.4

Total Liabilities 435.6 405.8

Members’ Equity

Retained earnings, substantially restricted 40.6 37.2

Accumulated other comprehensive income 0.0 -0.3

Total Members’ Equity 40.6 36.9

Total Liabilities and Members’ Equity 476.2 442.7

StatEmEnt of incomE

intErESt incomE 2014 2013

Interest Income from Loans and Investments 17.7 16.2

Interest Expense -1.2 -1.5

Provision for Loan Losses -1.4 -0.9

Net Interest Income after Provision for Loan Losses 15.1 13.8

Other Income 4.2 3.7

Operating Expenses -15.9 -14.9 net income 3.4 2.6

(Selected data in MillionS)

(Selected data in MillionS)


HUECU was my 1st bank out of college. It remains my bank as a professional and now for my family. I have used a variety of HUECU banking services, as my life has evolved. It’s an amazing benefit and institution! KARIN BLOOM, MEMBER SINCE 2000

in 1985, on my first day of work at MGh, i joined the credit Union and started a direct deposit savings account. Three years later, i was able to save enough for a down payment on my first home! MARY NIEDERBERGER, MEMBER SINCE 1985

i love the convenience - once upon a time when i worked in the building and you were so close and now i do everything online, even though i live 500 miles away, you’re still my main bank!

CINDY POPE MEMBER SINCE 1991

i love that hUecU always has my back.

The customer service is impeccable,

and they make me feel like family.

SEBASTIAN PLACIDE MEMBER SINCE 2013

large service, small bank, perfect fit.

BARBARA MOSCOWITz,

MEMBER SINCE 1989

Wonderful help for a first time home buyer.

MARK MACMILLAN, MEMBER SINCE 2014

i have always had a great experience for over 24 years. love this place.

CHERYL PIRES-TAYLOR, MEMBER SINCE 1990

they are just not your normal loan officers or tellers, they trust

you like family and try to give you the best that you can afford.

WILLIAM SAWYER

MEMEBER SINCE 1978

What i love most about HueCu is the friendly staff,

the excellent service, & the non-corporate feel.

ROBERT COUGHLIN, MEMBER SINCE 1989

the coin counter is the best. everyone

should have one. thank you!

DANIEL OH,

MEMBER SINCE 2013

HueCu got us smoothly, pleasantly & reassuringly into our mortgage when

we bought our first home.

RICHARD BRYDEN, MEMBER SINCE 2002

The ability to bank on day one upon immigrating to the U.S. from israel with my family − 15 years after graduating from harvard! AzIzA RIMON, MEMBER SINCE 2013

in rEcognition of oUr 75tH annivErSary,

wE aSkEd oUr mEmbErS:

HErE arE jUSt a fEw of tHE ovEr 1,000 testimonials We received.

What do you like most about HUECU?

the customer service is #1! love this team!

EUGENIA SANCHEz, MEMBER SINCE 1998

i love the credit Union’s long-standing commitment to workers and sound financial sense. carry on! EVAN MULL, MEMBER SINCE 2014

HueCu is simple banking with lots of options. i’ve never had any problems turn up and the

customer support is wonderful.

JANELLE MILLS, MEMBER SINCE 2000

love the fact that i am a member and not a customer. it speaks to the hUecU treatment. everyone is very helpful and friendly.

AMY FAIRHALL,MEMBER SINCE 2007

I’m a recent graduate and I have to say one of my biggest regrets was waiting so many years

to join the HUECU family. And it’s just that: a family. I feel like I’m welcomed here rather

than being a nameless patron behind a glass partition elsewhere.

AARON PALMER,

MEMBER SINCE 2014

The credit Union has always been there for me financially. i wouldn’t be in the home i am in now without hUecU. AURELIO RAMIREz, MEMBER SINCE 1990

i love being a part of HueCu! Credit unions—especially

this one—rock!

MADELEINE STRAUBEL, MEMBER SINCE 2011

the customer service is #1! love this team!

EUGENIA SANCHEz, MEMBER SINCE 1998

Feels like a family affair.

THADDEUS HOGARTH,

MEMBER SINCE 1989

I appreciate the great service extended to all the members.

Happy 75th!

PHYLLIS MASIELLO, MEMBER SINCE 1986

the HueCu staff is just amazing. it’s their over-the-top customer service that keeps me

coming back.

REBECCA COBURN, MEMBER SINCE 1994

everything about the credit Union is better than a typical bank: the

service, the people who work at hUecU, everything is great!

FREEMAN DEUTSCH, MEMBER SINCE 2000

i love that HueCu doesn’t nickel and dime me with fees. it is also so convenient to have my mortgage through HueCu,

& they were so much easier to deal with than a bank!

MARY LANzAROTTA, MEMBER SINCE 2004

i have all good memories of the

Credit union since 1976! i’ve always said HueCu brought me closer to my money.

ANAHID KRIKORIAN, MEMBER SINCE 1976


rEport from tHE aUdit committEE

The Audit Committee is composed of five

Directors dedicated to ensuring that the

Credit Union’s actions are held to the highest

standards of integrity and value. Throughout

2014, the Committee met regularly to review

audit and compliance reports as well as to

discuss other operational topics of interest.

We are assisted in our efforts by outside firms

that provide audit support of the Credit Union’s

finances, internal controls, and regulatory

compliance. Wolf & Company, P.C. audits

our financial statements.

Internal audits continued to receive significant

attention during 2014. Healy & Healy

performed these during the year

to test Credit Union procedures and controls

in branch operations, wire transfers, deposit

operations, mortgage and student loans,

and other areas. The Committee reviewed their

findings and management’s responses, and will

actively work with management on suggested

areas for strengthening processes and risk

management systems.

FIS performed compliance reviews and

training for Credit Union staff. Reviews

included compliance with regulations such

as the Bank Secrecy Act, Red Flags, loan file

reviews, and other areas.

Reimbursements to Board Directors in 2014

totaled $19,998. The majority of these costs

were related to attending the annual

Massachusetts Credit Union League

convention. No reimbursable expenses were

attributed to the Credit and Audit Committees.

All Director expenses and reimbursements

were compliant with the regulations of the

National Credit Union Administration

and the Massachusetts Division of Banks.

The Committee wishes to thank the Credit

Union Management for their cooperation,

support and assistance throughout the year.

Respectfully submitted,

Cheryl Hutt Committee Chair

committEE mEmbErS

cheryl Hutt

guillermo banchiere

mark Edington

edward emde

karrie ford

rEport from tHE aUdit committEE

Eugene J. FoleyPresident & CEO

Craig Leonard Executive VP, CFO

Cheryl Gorman Executive VP, Retail Services

John degnan VP, Operations

Peter Buchanan VP, Real Estate Lending

Tom MontilliVP, Marketing

Edward doctoroffSince 1979

dennis CampbellSince 2013

George whiteChairmanSince 1999

Jeremiah MurphyVice ChairSince 2003

John LichtenTreasurerSince 1992

Mary StraubClerkSince 2004

Bill MurphySince 2010

karen deBerioSince 2003

Cheryl HuttSince 2013

Guillermo BanchiereSince 2007

Mark EdingtonSince 2013

Edward EmdeSince 1993

karrie FordSince 2014


officErS

board of dirEctorS

Tom MurphyVP, Consumer Lending

Jason LukeSince 2014

Thomas LuceySince 2006

The Harvard University Employees Credit Union is proud to

offer our services to the employees, students and alumni of

Harvard University, Harvard teaching hospitals

and affiliated organizations.

we would like to thank all of our sponsor organizations for

their continued support and participation in the Credit Union.

Harvard University (Students, Alumni, Faculty and Staff)

Radcliffe Institute for Advanced Study

American Repertory Theater

Beth Israel Deaconess Medical Center

Boston Shriners Hospital

Brigham and Women’s Hospital

Cambridge Hospital/ Cambridge Health Alliance

Children’s Hospital

Dana Farber Cancer Institute

Dumbarton Oaks Research Library

Harvard Business School Publishing

Harvard/M.I.T. Cooperative Society

Harvard Management Company

Harvard Pilgrim Health Care

Harvard–Smithsonian Center for Astrophysics

Harvard Vanguard Medical Associates

Joslin Diabetes Center

Judge Baker Children’s Center

Lesley University

McLean Hospital

Massachusetts Eye and Ear Infirmary

Massachusetts General Hospital/ Partners Health Care System

MGH Institute of Health Professions

Massachusetts Mental Health Center

Medical Academic and Scientific Community Organization

Mount Auburn Hospital

The Center for Blood Research

The Schepens Eye Research

Institute Spaulding Rehabilitation

Hospital Veterans Administration

Boston Healthcare System

WGBH Boston

OUR SPONSORS

THANK YOU

H U E C U . O R g

Federally Insured by NCUA

Federally Insured by NCUA

your savings are federally insured to at least $250,000 and backedby the full faith and credit of the united states government.

2014 huecu annual report

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