annu 09 al report F i r s t F i n a n c i a l c r e d i t U n i o n

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09 annual report F i r s t F i n a n c i a l C r e d i t U n i o n Despite all of the challenges we faced in 2009, we still ended the year with positive net income. President s Message Ben F. Heyward 2009
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09 annual report F i r s t F i n a n c i a l C r e d i t U n i o n Despite all of the challenges we faced in 2009, we still ended the year with positive net income. President s Message Ben F. Heyward 2009 was an interesting year to say the least and was not without its surprises. Due to widespread job losses, bankruptcies and a general decline in commerce, many institutions experienced increases in loan defaults and losses. To make matters worse, credit unions were required to write-down their capital deposits at their corporate credit unions due to losses incurred as a result of the corporates commitments in mortgage backed investments. Needless to say, we were predicting negative income for the year, but I m happy to say we were wrong in this prediction. Sometimes being wrong can be a good thing. Despite all of the challenges we faced in 2009, we still ended the year with positive net income, and I am proud to say that all this was done without eliminating a single job! This was due to selective expense reductions, balancing the pricing between assets and liabilities, our loyal members, and the tremendous efforts made by our staff. Whether or not the economy is getting better is a matter of debate. I believe there has only been a slight improvement in some of the key economic measurements, which means that we should expect another unpredictable year for Based on continued losses by the corporate credit unions, the drain on the National Credit Union Share Insurance Fund (NCUSIF) continues. Although First Financial (along with any other natural-person credit union) had nothing to do with the way the corporate credit unions handled their investments, we are being asked to pay for it. We will pay for these losses through increased premiums and regulation. These assessments will have a direct impact on our profitability for 2010 and beyond. So will these situations that are occurring simultaneously result in us having negative income for 2010? While there are many external forces beyond our control, we have forecasted positive net income for In addition, we continue to grow our capital to levels that will help insure our continued safety and soundness. Overall, I predict that 2010 will be slightly better than Know that your credit union remains committed to providing the best possible financial services and personal service to you, our members. chairman s report cassie kelley 2009 was yet another challenging year for First Financial Credit Union, as we were not immune from the harsh realities of the troubled economy faced by all financial institutions. I d like to extend my gratitude to the management and staff of the Credit Union as I feel they ve done an outstanding job at navigating us through these extraordinary times. As Ben mentioned in his President s Report, credit unions were required to write-down their capital deposits at their corporate credit unions. First Financial weathered this situation extremely well and, even with this loss of income, was still able to see a positive net income for However, the corporate credit unions continue to strain the NCUA s Share Insurance Fund due to bad investments on their part. What this means is that natural-person credit unions like us are required to pay large increases in our premiums to keep this insurance fund solvent. This is particularly painful for naturalperson credit unions since we had nothing to do with the investments made by the corporate credit unions. In spite of this, we anticipate that 2010 will be better than last year. First Financial has always been committed to giving back to the communities we serve, and we find it more important than ever to remain committed through this trying economy. During 2009, First Financial employees and volunteers donated their time and money to different local community groups and non-profit organizations throughout New Mexico. Examples of these groups included the United Way, Children s Miracle Network and Toys for Tots, just to name a few. First Financial was also a flagship sponsor of the 2009 Making Strides Against Breast Cancer. Thanks to our employees, volunteers and members, we were able to raise over $27,525 and had over 352 walkers participate in the 2009 walk. During the past year, First Financial launched a new and improved website. We are pleased with all of the positive responses from our members on how they liked the new look and easier navigation. We also streamlined our member service positions in our branches by cross training staff in other areas, which now gives members a one stop banking experience. One thing you can be certain about First Financial is that your money is safe. Looking ahead, I have great confidence for the future. First Financial will remain strong, and we are focused on continuing our tradition of serving the needs of our members. We have a strong financial plan for the future, and a very talented and experienced management team and staff whose leadership has been vital to successfully guiding us through these challenging times. On behalf of all the credit union s volunteers and employees, we thank you for allowing us to serve your financial needs. Supervisory committee report jennifer walters The National Credit Union Association (NCUA) examined the credit union periodically. This federal agency provides the insurance that guarantees your deposits to $250,000. NCUA, the State of New Mexico Examiners, our CPA auditors (Nearman & Associates, who did our annual audit) and your Supervisory Committee find First Financial a sound financial institution for the year ending in The Supervisory Committee is responsible for providing oversight that assures members that the Board of Directors and management are maintaining the financial well being of your credit union, and that they are safeguarding its assets. In connection with these oversight functions, the Internal Audit Department reviews the internal operations and internal controls to determine the credit union s operations are valid, accurate and efficient. The Supervisory Committee has another function not as well know as the oversight responsibilities. We are the advocate for members who have problems or need assistance with items they are not comfortable taking to the credit union management. The Committee and our internal auditor are available to assist any member who wishes to contact us. The Committee works independently of the Board of Directors and credit union management, while working with the NCUA and the State of New Mexico s examiners. Supervisory Committee meetings are held monthly as are the branch reviews, management interviews, examination of the records and reports and compliance using applicable laws and regulations. We utilize a yearly audit plan to focus on specific areas that may need special attention as well as routine and high risk areas. In accordance with procedures prescribed by NCUA, a confirmation of members accounts was performed as of September The results reflected the conscientiousness of the First Financial s management and employees. As we look forward to the future, we may need to make changes in the way First Financial does business and in the security aspect of safeguarding your assets. The Internal Audit Department and your Internal Audit Director, Raul Arroyo, and your Supervisor Committee will do their very best to make sure First Financial will continue its promise to you, the members, to remain a safe and secure Credit Union. treasurer s report john sechrist First Financial, like most financial institutions, has been affected by this trying economic environment and difficult financial circumstances. Although 2009 was yet another challenging year, we were able to achieve balanced growth and a positive net income. In 2009, First Financial s assets grew by 9.1%, from $352 million to $383 million. Member deposits increased by 10.4% or just over $32 million, with much of that growth coming in checking accounts, money market accounts and IRA accounts. We continue to see steady growth in membership as consumers look increasingly for better value and service from their financial services providers. Membership increased by 2.7%, and at year-end we served 46,729 members. In order to reduce the risk on our balance sheet, total loan balances have declined due to the sale of fixed rate mortgage loans. Although we sold these receivables to reduce our interest rate risk, we keep the exclusive relationship with our members and continue to service all aspects of these loans. In 2009, we were pleased to see a reduction in the rate of our total loan delinquency, which helped enable us to lower our allowance account for loan losses. As mentioned in the President s report, credit unions were required to write-down their capital deposits at their corporate credit unions. Even with this loss of income, First Financial was still able to see a positive net income growth for 2009, and our year-end capital was 9.94%. Your Board is committed to keeping First Financial financially sound will likely continue to be a tough economic climate, but we are confident that First Financial will successfully navigate through these challenging times and continue to grow. Assets Loans Allowance for Loan Losses Net Loans Cash & Investments Fixed Assets Other Assets Total Assets Liabilities & Equity Current Liabilities Member Shares Retained Earnings Total Liabilities & Equity 2009 Statement of Financial Condition First Financial Credit Union As of 12/31/09 Statement of Income & Expense Interest Income: Loans Investments Interest Expense: Dividends to Members Interest on Borrowed Funds Net Interest Income Other Operating Income Non-Operating Income/Loss Operating Expense Provision for Loan Losses Net Income 2009 $263,369,070 (2,403,822) $260,965,248 95,938,621 6,434,819 20,656,337 $383,995,025 $ 2,421, ,397,806 38,175,793 $383,995, $ 18,529, ,896 (5,967,855) (76) $ 13,068,683 8,184,084 (456,601) (16,773,962) (3,771,000) $ 251, $309,901,736 (6,356,265) $303,545,471 33,300,267 6,778,529 8,501,107 $352,125,374 $ 3,122, ,078,227 37,924,588 $352,125, $ 19,994, ,404 (8,163,699) (106,382) $ 12,538,349 7,980,508 (77,028) (16,597,702) (6,327,224) ($ 2,483,097) Downtown Office 601 Tijeras NW San Mateo Office 2700 San Mateo NE Rio Rancho Office 2201 Rio Rancho Blvd. SE Coors Office 2929 Coors Rd. NW Ste. 104 South Valley Office 1625 Rio Bravo SW #18 Boardman Gallup Office 313 S. Boardman Mesa View Gallup Office 1383 N. Highway 491 Pine Hill Office Pine Hill Market, Rt. 125 Zuni Office 1202 E. Hwy. 53 Portales Office 700 West 2nd Farmington Office 3024 East Main St. Mailing address PO Box Albuquerque, NM Web Site B o a rd O f D i r e c to r s Chairperson Cassie Kelley First Vice Chairperson Pablo Rael Second Vice Chairperson Victor Padilla Secretary/Treasurer John Sechrist D i r e c to r s Lisa Aguilar John Blumenthal Ken Carson, Sr. Vincent Esparza Loretta Montoya 2009 Super visor y Committee Chairperson Jennifer Walters Members Gloria Herrera Olivia Jimenez Cover photo by member Ernie Montoya. Your savings federally insured to at least $250,000 and backed by the full faith and credit of the United States Government NCUA National Credit Union Administration, a U.S. Government Agency
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