2019 ANNUAL REPORT
WE’LL BE THERE FOR YOUA·M·O·C·O
WHO WE AREA Member Owned Cooperative Organization
OUR VISIONA Billion Points of Service
OUR MISSIONTo Serve the Financial Needs of Our Members
OUR CORE VALUESRespect, Integrity, Service, and Excellence
ANNUAL MEETING82ND
• Ascertainment that a Quorum is present
• Reading and approval or correction of the “Minutes” from the last meeting
• Chairman’s Report
• President’s Report
• Treasurer’s Report
• Supervisory Committee Report
• Unfinished Business
• New Business Other Than Elections
• Elections
• Adjournment
• Mr. Shawn Bailey, President/CEO, called the meeting to order on February 19, 2019, at 5:25 p.m. at the Doyle Convention Center, Texas City, Texas. A quorum was declared with more than 15 members present (estimated attendance 400).
• Mrs. Tina Foster called on Mr. Andre Parker to lead the invocation and pledge of allegiance.
• Mr. Bailey introduced the Board of Directors, Supervisory Committee, Nominating/Governance Committee, Executive Team, and other special guests.
• Mr. Bailey recognized the Rookie of the Year, Jermaine Brown; Employee of the Year, Jessica Powers; and the Manager of the Year, Claudia Maldonado.
• Mr. Bailey recognized the Volunteer of the Year, Josh Chapman.
• Mr. Bailey announced that the Santa Fe Branch was named after and dedicated to Director Roger McCrary for his 33 years of service to the credit union as well as, a scholarship was established in his honor.
• Mr. Bailey recognized the Member of the Year, Jimmy Fullen; and the SEG(s) of the Year, Santa Fe ISD & Santa Fe TX Education Foundation.
• Mr. Bailey presented his state of the credit union address.
• Mr. Bailey asked for a motion from the floor to dismiss the reading of minutes and various reports and accept as reported in the Annual Report.
• Moved: Hedy Minter l Second: Ann Lambousy Motion Carried
• Mr. Bailey asked if any unfinished/new business needed to be discussed. None presented.
81ST ANNUAL MEETING MINUTES
CALL TO ORDER
ELECTIONS
• Mr. Bailey reported that the Nominating Committee met in November 2018 and nominated the following members for the 2019 Board of Directors:
• Pat Tinsley - Position #1
• Andre Parker - Position #7
• Mr. Bailey declared Mr. Tinsley and Mr. Parker elected by acclamation.
ADJOURNMENT
• Mr. Bailey adjourned the meeting at 5:50 p.m.
AGENDA
DIGITAL STRATEGYFor many years, our physical branches were the hub for member activity and transactions. While these branches will remain a necessity in the financial industry, the reality is that a majority of members are now accessing the credit union via electronic means (call center, digital banking, automated clearinghouse, indirect lending, internet lending, etc.). Therefore, the credit union needs to ensure these “touchpoints” deliver the level of service that meets the needs of our members and differentiates us from the competition; hence why the digital strategy was introduced by the board in 2016.
Since the inception of these strategies in 2005, the credit union has tripled in loans outstanding to $700 million from $185 million; doubled deposits to $845 million from $316 million; increased reserves to $86 million from $51 million; and is projected to reach $1 billion in assets by end of 2020. As these numbers demonstrate, I am confident that the board’s strategic initiatives are meeting the credit union’s mission of “serving the financial needs of our members.”
CHAIRMAN’S REPORTThe primary purpose of the credit union’s Board of Directors is to provide general direction and establish strategies designed to ensure credit union success and achievement of long-term objectives. These strategies are developed by adhering to the credit union’s mission and vision while aligning the credit union’s strengths and weaknesses with environmental opportunities and threats. Adhering to this model, the board of directors has established the following key strategies for the credit union:
GROWTH STRATEGYSince 2006, the credit union has focused on growing the credit union in three core areas: loans, deposits, and membership. Growing in these areas should be the true benchmark as to whether or not the credit union is successfully serving the membership. A critical component of this growth strategy was the expansion of the credit union’s physical branch network—one branch to ten branches (seven full- service branches and three micro branches).
L.U.V.E. STRATEGYThe credit union introduced its differentiation strategy in 2010, focusing on building loyalty with our membership and employees; being different or unique from our competitors and their offerings; ensuring everything we do adds value; and making the credit union’s products and services easy to use.
RON MULLENChairman of the Board
3 | CHAIRMAN’S REPORT
$266+ million in new loans
$39+ million in new home loans
5,258 new checking accounts
15+ million debit card transactions
2,400+ credit cards opened
915,000+ credit card transactions
1+ million saved with better rates and lower fees
562,000+ cleared checks
251,000+ calls answered by Call Center
2,391 policies with TruStage Insurance Agency, LLC
934 members served by AMOCO Investment & Retirement Advisor
$8,000 awarded in scholarships
$48,000 provided for internship program
$215,000+ donated to community organizations
$32,700+ donated through Create Change program
2,000+ visitors at AMOCO’s Sneak-A-Peek Night at Galveston County Fair & Rodeo
$35,888 in livestock purchased at auction from local 4-H programs
236 employees
44.5 hours of financial literacy events for youths and adults
560+ Select Employer Groups
2019 AT A GLANCE
BEST CREDIT UNIONThe Daily News Readers’ Choice
LARGE BUSINESS OF THE YEARLeague City Regional Chamber of Commerce
LARGE BUSINESS OF THE YEARTexas City-La Marque Chamber of Commerce
AWARDS
5 | 2019 AT A GLANCE 6
PRESIDENT’S MESSAGE
users converted to our new digital banking provider in just a three-week period
As part of the credit union’s current digital strategy, some significant upgrades/conversions occurred this past year. In response to the acquisition and subsequent “sunsetting” of the credit union’s previous digital banking provider, the credit union converted to a new digital banking platform in 2019. As with any major conversion, there were obstacles and issues to overcome, and still, there are enhancements and features to be introduced. Management appreciated the membership’s patience and understanding as the credit union converted over 40,000 users to this new platform in just a three-week period. Now that the dust has settled, I am confident that the membership will find this new platform to be superior to the credit union’s previous offering.
In addition to the digital banking conversion, the credit union also upgraded its digital loan and account opening platform. Both proved to be a faster and more accessible channel, as demonstrated by the credit union completing more loan business for
40,000+
our members through this channel than any physical branch. The credit union also added a third-party provider to assist with call overflow service, and will be making enhancements to the Call Center platform to better serve our members via phone services in 2020.
While not as visible but arguably the most valuable enhancement the credit union made this past year, was to its Information Systems & Technology infrastructure. From storage, servers, network, routers, switches, software, and endpoints, the credit union completely upgraded the foundation that all of its systems run upon, which improved the credit union’s speed, reliability, and security.
In closing, the biggest investment made this past year was with you, our members, with the introduction of the credit union’s Member Loyalty Program. In the first year, the Member Loyalty Program returned over $1 million to the membership in the form of bonus dividends and loyalty discounts.
On behalf of the management and staff of the credit union, I thank the board for its strategic direction and thank the membership for your confidence and trust in allowing the credit union to manage your financial affairs.
SHAWN BAILEYPresident/CEO
7 | PRESIDENT’S MESSAGE
CREATING CHANGEIN OUR COMMUNITYAMOCO proudly supported the following organizations through our Create Change program in 2019:
Alvin Community College Foundation
Alvin ISD Education Foundation
Alvin Noon Lions Club
Alvin-Manvel Area Chamber of Commerce
Anchor Point
Animal Alliance of Galveston County
Bay Area Habitat for Humanity
Bay Area Houston Ballet & Theatre
Bay Area Pet Adoptions
Bay Area Turning Point Inc.
Butler Longhorn Museum
CCISD Special Education PTA
Christian Renewal Center
Clear Creek ISD Education Foundation
Clear Lake Area Chamber of Commerce
Clear Lake Regional Center on behalf of March of Dimes
College of the Mainland Foundation
Communities In Schools-Bay Area
Communities In Schools TX Joint Venture
Community Association for Nassau Bay Enhancement
Devereux Texas
Dickinson ISD Education Foundation
Edgar A. Smith Family YMCA
Family Promise of Clear Lake
Family Service Center of Galveston County
Friendswood Chamber of Commerce
Galveston County Fair & Rodeo
Galveston County Food Bank
Galveston ISD Education Foundation
Galveston Island Humane Society
Galveston Regional Chamber of Commerce
Gloria Dei Lutheran Church
Good Shepherd Episcopal Church
Greater St. Matthews Baptist Church
Gulf Coast Big Brothers Big Sisters, Inc.
Hitchcock Chamber of Commerce
Hitchcock ISD Education Foundation
Hitchcock Little League
Hope Village
Houston Methodist Hospital
Houston Methodist St. John
Interfaith Caring Ministries
League City Chamber of Commerce
Lighthouse Christian Ministries
M.I. Lewis Social Service Center
CREATING CHANGE IN OUR COMMUNITY | 10
Marathon Galveston-Bay Refinery United
Mark Kilroy Foundation
Methodist Retirement Community
Our Lady of the Lourdes Catholic Church
Perry Family YMCA
Rachel’s Challenge
S.A.V.E. Rescue Coalition
Sacred Heart of Jesus Catholic Community
Santa Fe Chamber of Commerce
Santa Fe Education Foundation
Second Chance Pets
Space City Cruisers
St. John the Baptist Catholic Church
St. Mary of the Miraculous Medal Church
St. Vincent De Paul
Texas City ISD Foundation for the Future
Texas City-La Marque Chamber of Commerce
Texas EquuSearch
The Friends of Freeman Memorial Library
The Independence Village
Thelma Ley Anderson Family YMCA
United Way Galveston County Mainland
United Way of Galveston
University of Houston - Clear Lake Bayou Theater
Vic Coppinger Family YMCA
West Galveston County Interfaith Caring Ministries
Workplace Campaign
The credit union’s financial performance is the benchmark for evaluating the credit union’s success in achieving its mission, “to serve the financial needs of our members.” As treasurer of your credit union, I am pleased to report on the credit union’s financial performance for 2019.
The credit union surpassed $700 million in total loans outstanding in 2019. To achieve this milestone, the credit union funded over $300 million in loans which led to loan growth of over $50 million this past year. The credit union had its best year in history for growth in real estate funding and credit card balances. In accordance with the growth in loans and to protect against future loan losses, the credit union maintained its allowance for loan losses to over $7 million.
The credit union also surpassed $800 million in deposits in 2019 and had its second-best year in history for deposit growth at almost $68 million. A majority of this growth came in certificates, as the credit union introduced jumbo certificates and the Member Loyalty Program. Combined, the credit union paid almost $8 million in interest to members in 2019; in spite of the low-interest rate environment.
TREASURER’S REPORT
in total assets in 2019$982 MILLION
Collectively, the credit union’s total assets increased by a record $100 million to $982 million in 2019.
The credit union recorded back-to-back years of $6 million-plus in income, generating $6.8 million in 2018 and $6.3 million in 2019. With this record net income, the credit union also surpassed another significant financial milestone of $85 million in total reserves. These reserves have been built up over the past 82 years by adhering to prudent management principles.
Again, the most important story behind the credit union’s financial success is that the credit union is serving the financial needs of more members than at any point in its history. In 2019, the credit union grew by over 1,700 members and reached 86,536 total members.
On behalf of the board of directors, I want to thank you, my fellow members, for making it all possible.
86,536
$700+MILLION
MEMBERS
IN TOTAL LOANS
IN TOTAL DEPOSITS
$800+MILLION
J.R. NORMANTreasurer of the Board
11 | TREASURER’S REPORT
ASSETS
DEPOSITS MEMBERS
LOANS
646,999,341
797,376,545
777,727,527
480,025,452
500,180,039
611,455,626
651,755,288
700,351,136
761,484,410
2019
2019
2018
2018
2017
2017
2016
2016
2015
2015
817,024,757
910,630,631
881,974,788
982,421,250
698,335,878
77,212
79,134
83,348
84,795
86,536 845,807,210
GROWTHOVER THE YEARS
EMPLOYEES CELEBRATED
MILESTONES
30 YEARSMelissa Davenport (Retired)Kathy Warnell
25 YEARSDebbie Castaneda
15 YEARSNathan AshworthJoanna Knape
10 YEARSPaul LaddBrittany McKinneyMegan SeayKrystle Ulhaq
5 YEARSLyndsey BlockSharon GaspardJuan GonzalesJohn HermanChristina JamesShelby PlylerReginal PrattAbigail RansomMalia SifuentesMichelle Walker
MEMBER OF THE YEARGilbert Gustafson
SELECT PARTNER OF THE YEARA&A Machine & Fabrication, LLC
VOLUNTEER OF THE YEARHedy Minter
NEW EMPLOYEE OF THE YEARHaley Adams
EMPLOYEE OF THE YEARJustin Batson
MANAGER OF THE YEARDarby McDermott
AWARD WINNERS
13 | GROWTH OVER THE YEARS MILESTONES | 14
2018$33,762,379164,746,246644,888,077
24,162,03414,416,052
$881,974,788
$778,060,4930
19,771,0467,785,589
13,525,36119,000,00047,805,940(3,973,641)
$881,974,788
Assets Cash and Cash equivalents Investments Loans to members, net Fixed Assets Other AssetsTotal Assets
Liabilities Shares Dividends Payable Accounts Payable Other Liabilities
Equity Regular Reserves Other Reserves Undivided Earnings Unrealized Gain/(Loss)Total Liabilities & Equity
2019$44,418,562206,133,851
692,687,04323,450,22915,731,565
$982,421,250
$845,807,2100
40,529,19510,088,839
13,525,36119,000,00054,110,957
(640,312)$982,421,250
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
Income Interest on loans to members Interest on investments & cash equivalents OtherTotal Income
Operating Expenses Employee Compensation & Benefits Operations General & AdministrativeTotal Operating Expenses
Provisions, Dividends, and Refunds Provision for Loan Losses Cost of Funds Bonus Dividend Interest RefundTotal
NET INCOME BEFORE
NON-OPERATING GAINS/(LOSSES)
NET INCOME AFTER
2018$28,315,675
4,361,28716,917,048
$49,594,010
$14,726,2854,832,112
10,296,988$29,855,385
$7,820,0004,898,234
154,2360
$12,872,470
$6,866,155
$(66,751)
$6,799,404
2019$32,309,257
5,397,79817,139,661
$54,846,716
$16,176,3414,938,153
12,514,078$33,628,572
$7,065,0007,992,522
00
$15,057,522
$6,160,622
$144,395
$6,305,017
CONSOLIDATED STATEMENTS OF INCOMEAS OF DECEMBER 31, 2019 & 2018AS OF DECEMBER 31, 2019 & 2018
15 | STATEMENTS OF FINANCIAL CONDITION STATEMENTS OF INCOME | 16
I would like to thank the membership for entrusting me and my fellow committee members with this responsibility.
The Supervisory Committee is comprised of volunteers from the membership and is appointed by the Board of Directors to independently function as the members’ “watchdog.” The most important responsibilities of the Supervisory Committee are to ensure that the credit union’s financial statements accurately depict the credit union’s financial condition, and that management’s policies and procedures protect the members’ assets.
To fulfill our responsibilities, the committee retained the Cornerstone Credit Union League to perform audits on a monthly basis throughout 2019 and an independent certified public accounting firm, CliftonLarsonAllen, LLP, to conduct the annual opinion audit and member verification audit. The National Credit Union Administration also performed an annual federal examination of the credit union.
On behalf of the Supervisory Committee, I am proud to report the credit union’s financial position is fairly and accurately represented in its financial statements in conformity with generally accepted accounting principles.
In addition to reviewing the credit union’s audits and examination, the Committee also attends board meetings, reviews board materials, and monitors credit union operations throughout the year to ensure that members’ assets remain secure and protected.
SUPERVISORY
CONRAD & TAMMIE C.
INTERESTED IN SHARING YOUR STORY?
COMMITTEE REPORT
AMOCO is the credit union of your choice if you want to build a lifelong relationship that rewards your loyalty. AMOCO always has the members’ best interest at heart.
MEMBERS SINCE 1987
MEMBERS OF THE MONTHNOVEMBER 2019
We love hearing how we’ve helped our members! If you’d like to share your experience, contact us at [email protected] and you could be featured as our next Member of the Month!
“
”
HEDY MINTERSupervisory Committee Chairman
17 | SUPERVISORY COMMITTEE REPORT
EMPOWERING
Ashley Carner, our Chief Operations Officer, is heavily involved in the community, as she is on the Santa Fe Economic Development Corporation Board and Houston Methodist’s Women’s Advisory Group. Plus, she volunteers and is a foster for S.A.V.E. Rescue Coalition.
In addition to her role as our Chief Administration Officer, Gail Figueroa serves on the Texas City-La Marque Chamber of Commerce Board of Directors as well as their Executive Committee.
Recognized as one of the 40 Under 40 Honorees in Galveston County by The Daily News in 2019, Jeremy Silva, our Chief Financial Officer, also serves on the Cornerstone Credit Union Foundation Grants Committee and is one of their Ambassador Committee Members. He is on the United Way Allocations Committee as well.
ASHLEY CARNER
GAIL FIGUEROA
JEREMY SILVA
STACEY MALBROUGHIn addition to her role as Culture & Communications Manager, Stacey Malbrough mentored a student through Communities in Schools-Bay Area and graduated from the Clear Lake Area Chamber of Commerce leadership class in 2019.
SHAWN BAILEYOur president/CEO, Shawn
Bailey, was awarded the Business
Professional of the Year at the
League City Regional Chamber
of Commerce Annual Gala. In
addition, he was sworn in as the
Chairman of the Board of the
Clear Lake Area Chamber of
Commerce. He also serves on the
United Way Galveston County
Mainland Board of Directors.
OUR COMMUNITY
19 | EMPOWERING OUR COMMUNITY 20
CHET RICH | Board Position #2Mr. Rich has been a member for 28 years and currently serves as a Director of the Board. After 38 years employed with the Texas City Police Department, he is now retired and resides in Texas City, TX.
BOARD OF DIRECTORS NOMINEES
ROGER MCCRARY | Board Position #4Mr. McCrary has been a member for 44 years and currently serves as Vice Chairman of the Board. After 32 years employed at Amoco/BP, he is now retired and resides in Santa Fe, TX with his wife, Dianne.
RUBEN TORRES | Board Position #6Mr. Torres has been a member for 38 years and currently serves as a Director of the Board. After 32 years employed at Amoco/BP, he is now retired and resides in League City, TX with his wife, Rachel.
In accordance with AMOCO Federal Credit Union’s by-laws for board elections, there will be no nominations from the floor for any board position open for re-election unless insufficient nominations have been made by the Nominating Committee and/or a Nomination by Petition(s) has been received.
For the 2019-2020 board elections, the Chairman of the Board appointed the following members to serve as the Nominating Committee:
2020
2020
BOARD ELECTIONS
Mr. Josh Chapman, Chairman
Mrs. Stacy Cortez
Mr. Craig Mason
The Nominating Committee has selected one applicant for each open position on the Board of Directors, and the credit union received no Nominations by Petition. Therefore, the Chairman can declare each nominee elected by general consent or acclamation.
BOARD OF DIRECTORS
SUPERVISORY COMMITTEE
GOVERNANCE COMMITTEE
Ron MullenChairman
Hedy MinterChairman
Josh ChapmanChairman
Chet RichDirector
Roger D. McCraryVice Chairman
Chris DeVriesMember
Stacy CortezMember
Ruben TorresDirector
J.R. NormanTreasurer
Sonny TholckenMember
Craig MasonMember
Tim BulotHonorary Director
Emeritus
Andre ParkerSecretary
Bob F. Steel (Deceased)Honorary Director
Emeritus
Pat TinsleyDirector
21 | BOARD ELECTIONS & BOARD OF DIRECTORS NOMINEES
Federally insured by NCUA.