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20

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Total General Mortgage

2014

2015

Report of the Treasurer

Michael Chevarria - Treasurer Credit Union of Denver is Colorado’s oldest, and one of its largest, member-owned financial cooperatives. In 2015, Credit Union of Denver provided its members with more overall value in the form of excellent rates, outstanding service, superior products and convenient access. In fact, in the upcoming year we will celebrate being in existence for 85 years, during which we have acquired a vast amount of experience. By keeping operating costs low, membership returns high and by making member satisfaction a top priority, the Management Team feels that in 2015 we have helped you achieve your financial goals and at a higher level than ever before.

The Ongoing support of our membership continues to be demonstrated by the achievements the Credit Union of Denver attained this past year. Our loan portfolio grew by over $30.0 million, or 8.5%. During the past recessionary years it has been reported in this Annual Report that loan growth along with savings growth is the life-blood and the primary elements of success for the credit union. Loan underwriting in 2015 was significantly improved as we moved to an online based program to expedite member requests. Loan rates were maintained at competitive levels to benefit members and loan terms were designed to insure that members might be able to obtain and maintain loan payments that fit their budgets.

During the past year we have seen savings interest rates adversely impacted by investment markets that sought to keep rates at historic low levels. Our Management Team was able to provide savings rates that remained competitively strong. One outstanding product that remains today is our 13-month Certificate rate which is at 1.25%. We are paying the same above-market rate on our 1-year IRA Certificates.

As a result of our solid financial performance for 2015 the credit union reached a strong Net Worth Ratio of 11.44%. Based on that performance and in light of the strong support our membership has given the credit union, the Board of Directors voted to award the membership a $1.5 million special bonus dividend. A $28.00 dividend was posted in January 2016 to each member who was in good standing with the credit union as of December 31, 2015.

The credit union remains committed to providing our members with quality financial service, exceeding our members’ expectations and achieving a loyal relationship with members and staff. We hope to continue serving you with these high standards in the years to come. We realize that you do have a choice.

Looking Back at 2015 and 2014

Total Loans:

2014: 7,148 $129,532,528.35

2015: 7,148 $137,523,381.89

General Loans:

2014: 6,871 $101,587,599.70

2015: 6,778 $102,237,562.56

Mortgage Loans:

2014: 277 $ 27,944,928.65

2015: 370 $ 35,285,819.33

Report of the Credit Committee

Lee Allen – ChairpersonI would like to thank all of the Credit Committee volunteers for their hard work and dedication over the last year. Our members are David Domagala, Cynthia Harris, Sheila Perry and Dee Purdy.

Credit Committee members meet on a rotating basis, as needed, to review member loan requests and appeals on a fair and impartial basis. The full committee meets monthly to review and approve items such as underwriting criteria and lending authority.

The Credit Committee continues to operate with the vision of “People Helping People.” We continue to believe that working with our members to meet their lending needs will help build a secure, safe, and strong credit union for tomorrow.

Thank you to the Board of Directors, officers and staff for their dedicated support and assistance throughout the year. And, a special thank you to our members who have entrusted Credit Union of Denver to meet their lending needs.

millions

2015 annual report

2015 2014

Interest and dividend income:

Loans to members and others $ 18,674,430 $ 17,213,511

Investments 2,548,633 2,542,205

Total interest and dividend income 21,223,063 19,755,716

Interest and dividend expense:

Members’ shares and savings accounts 4,335,770 2,636,752

Other borrowed funds 21 103

Total interest and dividend expense 4,335,791 2,636,855

Net interest income 16,887,272 17,118,861

Provision for loan losses 1,991,000 1,609,000

Net interest income after provision for loan losses 14,896,272 15,509,861

Non-interest income:

Fees for member services 2,402,962 2,342,176

Plastics and outlet income 3,606,479 3,398,752

Other operating income 708,599 750,788

Total non-interest income 6,718,040 6,491,716

Non-interest expense:

Compensation and benefits 8,238,667 7,915,533

Office occupancy expense 1,093,251 989,155

Service center, ATM and plastics expenses 3,429,431 3,020,575

Other operating expenses 3,816,661 3,631,443

Total non-interest expense 16,578,010 15,556,706

Net income $ 5,036,302 $ 6,444,871

Other comprehensive (loss) income:

Unrealized gain on securities:

Unrealized holding (losses) gains arising during period (689,957) 417,675

Less: reclassification adjustments for (gains) included in net income _ _

(689,957) 417,675

Equity share of unrealized gains of CUSN _ 48,058

Other comprehensive (loss) income: (689,957) 465,733

Comprehensive income $ 4,346,345 $ 6,910,604

Regular Reserve

Accumulated Other

Comprehensive Income (Loss)

Undivided Earnings

Total

Balances, December 31, 2013 $ 14,564,152 $ (290,857) $ 47,441,281 $ 61,714,576

Statutory transfers, net _ _ _ _

Net income _ _ 6,444,871 6,444,871

Other comprehensive income _ 465,733 _ 465,733

Balances, December 31, 2014 14,564,152 174,876 53,886,152 68,625,180

Statutory transfers, net _ _ _ _

Net income _ _ 5,036,302 5,036,302

Other comprehensive (loss) _ (689,957) _ (689,957)

Balances, December 31, 2015 $ 14,564,152 $ (515,081) $ 58,922,454 $ 72,971,525

Report of the Supervisory Committee

Carl Bingham – ChairmanAs your Supervisory Committee, we review and evaluate the performance of your credit union to ensure accurate financial reporting and to protect your assets.

For 2015, we engaged with Jones Mertsching CPAs, PC, who performed the annual opinion audit of your credit union’s financial statements. We are pleased to report a clean unmodified opinion, indicating that the financial statements are fairly presented with no material exceptions.

The committee also continued our engagement with an independent auditor, Rebecca Z. Clowers, CPA to perform monthly internal audits directed by the committee. These audits include the review of adherence to internal policies and procedures, as well as compliance with state and federal regulations. These monthly reports are presented in person to the committee, along with a response from management as to how any exceptions were handled. Our goal is to ensure that the credit union’s operations remain efficient and safe. I am honored to report there were no material findings again this year.

I would like to thank management and staff for their hard work and dedication. I would also like to thank the volunteers who served on the Supervisory Committee this year: Pauline Borquez, Jacque Ganger, Don Grewe, Robin Morthland, Ron Newell, and Philip Wilson.

Statement of Financial Condition

Statement of Income

Statement of Members Equity

2015 Annual Report – Report of the Chairman & CEO

George Volentir - Chairman, Board of Directors Keith Cowling - CEOYour credit union had a very successful 2015 and reached its strongest capital position in over 35 years. To thank our loyal members, the Board of Directors declared a bonus dividend of more than $1.5 million for 2015 that was paid to members effective January 31, 2016. Even after accruing for the bonus dividend our Net Worth Ratio was 11.44%, which is the highest it’s been since at least 1980 and exceeds our national peer group of credit unions at 10.98%.

In 2015, loans outstanding grew by 8.5% to over $384 million, while deposits grew by 5.5% to nearly $565 million. As of year-end 2015, total assets exceeded $642 million and we had 56,876 members. After accruing for the member bonus dividend, our net income for the year was still over $5.0 million, which gave us a Return on Assets (ROA) of 0.81% compared to 0.76% for our credit union peer group.

We have been reaching out to grant more loans to more members, even some with limited or challenging credit. As such, our loan delinquency and charge-offs have increased, but are still very respectable. As of year-end 2015, less than 1% of our total loans outstanding were 60 days or more past due and net charge-offs of uncollectible loans for the year was less than 0.5% of total loans.

The additional loan income has helped us pay more interest to our savers. Not only did we pay the 2015 member bonus dividend in early 2016, but we have been offering an above-market rate on our Special 13-month CD. As of year-end 2015 we had nearly 2,300 13-month CDs for just under $83 million. We have been paying the same above-market rate on our 1-year IRA CD.

Another reason we are able to provide more value to our members is our commitment to be efficient and control our operating expenses. In 2015, our Operating Expense-to-Average Assets Ratio was only 2.65%, well below our national peer group average of 3.23%.

One of the ways we keep our costs down is by utilizing technology and not having a lot of branches. Usage of online banking and mobile banking continues to grow. Members logged into our online banking service over 2.6 million times in 2015. Mobile banking, which we began offering in 2012, had over 1.0 million logins…a 36% increase over 2014. Our members also deposited more than 34,000 checks from the convenience of their smartphone or tablet, up from 26,000 in 2014. Meanwhile, teller transactions at our main office were down by more than 5% from 2014.

In May 2015, we began offering Apple Pay so our members can make purchases at participating merchants with their iPhones using their Credit Union of Denver credit card or debit card. As of year-end, our members had set up over 850 of our debit cards and nearly 240 of our credit cards on Apple Pay. We plan to offer Android Pay and Samsung Pay in 2016.

In May 2015, we also purchased the building next door to our main office at 9393 W. Alameda Avenue in order to meet our future office space needs. We plan to begin remodeling the building in the second half of 2016 and occupying it in 2017.

In June 2015, we went live with a new system for accepting loan applications and opening new accounts online that is fully integrated with our various other systems in order to make these processes more efficient for the credit union and more timely and convenient for our members. In 2015, we received over 2,100 online loan applications and 360 online new account applications through this system.

In August 2015, we converted our credit cards and HELOC cards to EMV by mass reissuing over 13,000 new cards to our members. EMV stands for Europay, MasterCard and Visa. It is the global standard for cards equipped with computer chips and the technology used to authenticate chip-card transactions. This should help improve payment security and reduce card fraud. We are planning to mass reissue EMV debit cards in 2016.

We will celebrate our 85th anniversary in 2016 as Colorado’s oldest credit union. We could not have achieved this milestone without the loyal support of our members over the years…thank you! We also want to recognize all our hardworking employees and the devoted volunteers who serve on the Board of Directors, Credit Committee and Supervisory Committee for their leadership and direction.

2015 2014Assets

Loans to members, net of allowance for loan losses $ 372,762,753 $ 343,917,965

Business loans to non-members 7,156,122 6,173,740

Cash & Cash Equivalents 43,905,744 40,441,719

Securities available-for-sale 203,837,698 202,725,749

Investments, other 2,960,489 2,627,400

Accrued interest receivable 2,158,572 2,139,466

Property and equipment, net 2,942,504 2,695,522

NCUSIF deposit 5,247,692 4,983,193

Other assets 1,424,470 1,416,687

$ 642,396,044 $ 607,121,441

Liabilities and Members’ Equity

Members’ shares and savings accounts $ 564,673,046 $ 535,248,272

Accrued expenses and other liabilities 4,751,473 3,247,989

Total liabilities 569,424,519 538,496,261

Members’ equity

Regular reserve 14,564,152 14,564,152

Undivided earnings 58,922,454 53,886,152

Accumulated other comprehensive loss (515,081) 174,876

Total members' equity 72,971,525 68,625,180

$ 642,396,044 $ 607,121,441