2016 Annual MeetingApril 18, 2017

5:30 pm

2016 Annual Meeting Agenda

Adam BeVier Call the Meeting to OrderSteve Merten Roll Call of the BoardSteve Merten Minutes of Last Year’s MeetingAdam BeVier The Report of the DirectorsJasen Hutchens Information Technology AccomplishmentsAbby Smith Human Resource AccomplishmentsChristie Dompierre Marketing AccomplishmentsAdam BeVier Bylaw Changes ReportKaren Browne Treasurers ReportChris Milliron Credit Committee ReportAdam BeVier The Report of Outside AuditorsAdam BeVier Unfinished and New BusinessKaren Browne  Election ReportAdam BeVier Adjournment

Adam BeVierChairperson

Call the Meeting to Order

Steve Merten, SecretaryRoll Call of the Board

Minutes of Last Year’s Meeting

Adam BeVierChairperson

Report of the Board of Directors

2016 Accomplishments 

5 Star Bauer Rating 

18 Consecutive Years!

Our Mission To serve the community and build trusted relationships.

2016 Accomplishments Physical Growth

Student‐Run Credit Union Program: • Started 2016/17 school year with 15 participating schools

New Positions:• Member Service Specialist in the Service Center• Chief Lending Officer

New Member of Nominating Committee:• Jonathan Plummer

AccomplishmentsLiving our Mission

$717,992SAVED MEMBERS

4.64 4.78MEMBER SERVICE AVERAGE SCORE

INTERNAL SERVICE AVERAGE SCORE

4.92 MEMBER ADVOCACY SCORE

Accomplishments

• Added Mini Fridge to South Airport Lobby for Members

• Eliminated signatures for in person cash withdrawals of $200 and below

• Redesigned website for member convenience and mobile viewing

• Bumped out the Front Street ATM to make drive up access easier

• Saved members over $23,000 a year by eliminating .35 cent fee for Point of Sale PIN transactions 

New Products and Services

Bill Pay• Conversion with enhancements including 

Person to Person payment

VISA• Converted all VISA Classic Credit Cards to Risk Based Chip Cards

Electronic Mail Payments• Electronic conversion of deposits/payments mailed to TBACU but 

initiated through outside bill pay providers for efficiency and increased accuracy.

Pay It Forward

$3,050 given back to the community through our Pay it Forward 

Birthday Celebration.

Policy Updates and Revisions

ALM & Interest Rate Risk Policy Concentration Risk Policy Expense Reimbursement Policy Loan Policy Loan Modification Policy Member Business Loan Policy Loan Participation Policy Suspension of Services Policy

Jasen HutchensInformation Technology Director

IT Accomplishments

Information Technology

• Changed Mitel Vendor• Call Recording Software implemented for training purposes.• Changed Wireless providers from ATT to Verizon.• DocuSign implementation

• 1,300 secure encrypted emails were sent in 2016• ProDoc e‐sign system

• 556 electronic envelopes sent for Memberships, Loans and Credit Card accounts

• Security• 4,136 Ransomware attempts were stopped before making it into 

TBACU’s email system• 1.443 million emails were blocked before getting to TBACU’s exchange 

server• Identified 1,262 malware/viruses and 14,313 spam emails• 83% of emails to tbacu.com addresses were blocked before entering the 

network environment due to bad addresses, a sender domain that is on email blacklists and a number of other factors

• TBACU backs up 3.5 TB of data nightly

Abby SmithHuman Resource Director

HR Accomplishments

Human Resources

ADP Workforce Now Solution Introduced• Saving time • Improved efficiency• Increased functionality 

Licensing for Credit Insurance Products• 4 additional staff are licensed 

Human Resources

Gallup Employee Engagement Survey• 59% engaged, 32% national average• 4.26 out of 5.0 Engagement Score 

Product Knowledge Assessment• 83% of staff score above 90%• 12% of staff scored between 85‐90%

Staff trainings through EAP partnership in 2016• Happiness and Wellness• Leadership

SMILE member service training for new staffAnnual President’s Day Training

Christie DompierreMarketing Director

Marketing Accomplishments

Member Education and Events

• Box Top Challenge for Education• Budgeting 101 Workshop at NMC• Professional Prep Dinner at NMC• Financial Budgeting Workshop for the Disability Network Job Summit• Money Smart Week Events

• Geocaching at NMC• Story Hour at Traverse Area District Library• Story Hour at Peninsula Community Library

• Hosted an e‐Services Workshop• Hosted ID Theft Workshop• Hosted Credit Score Workshop• Hosted Retirement Planning Series Workshops 1‐3• Hosted Wills & Trust Workshop• International Credit Union Day• Reality Fair at TC East Middle School

EDUCATIONAL

EVENTS

Scholarships and Grants

FIVE SCHOLOARSHIP PROGRAMS

GTBA MEA Retired Scholarship

MARSP‐ GT Chapter Scholarship

MARSP‐ Leelanau Chapter Scholarship

TBACU Study Abroad Scholarship

TBACU Scholarship Fund for NMC Students

$4,839.95 Donated in Classroom 

Grants

Community Involvement

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2016 Hours

Goal of 1400 exceeded by 93.25 hours!

Participation in Other Events

Active Shooter training exercises with regional law enforcement

HBA Home Expo Ideas for Life Senior Expo MARVAC RV & Camper Expo NMC BBQ NMC Benefits Fair Oryana Membership Days Pavilions Benefits Fair Security & Safety Seminar with regionals FIs 

and law enforcement TBACU Pay it Forward Birthday Celebration TC Chamber Business Expo TCAPS Welcome Back Breakfast

Sponsorships/Donations Benzie County Central Schools Crooked Tree Arts Center Crosshatch Small Farm Conference Downtown Traverse City Association 

Friday Night Live El Grupo Norte Smart Route to 

School Event Series Elk Rapids Schools “ER” Event Forest Area Sports Booster GT County Sheriff’s Office, criminal 

investigation forensic software GT Woman Business Luncheons Jim Ooley Golf Outing Junior Achievement Youth Summit Kiwanis March of Dimes Signature Chef 

Auction

Michael’s Place‐ A Night at the Movies NMC Scholarship Open Optimist Club Outstanding Persons In Education  Rotary Club of Traverse Bay Sunrise 

Foundation SCORE Workshop Series Suttons Bay Public School Robotics Team TBACU Summer Softball Team TBAISD Career Tech Golf Outing TBAISD Outstanding Educator Awards TC Central High School Hall of Fame TC Chamber of Commerce Golf Outing TC Children’s Book Festival TC Chocolate Festival The Giving JAR Charity Golf Outing

Adam BeVier, ChairpersonBylaw Change Report

Karen Browne, CEOTreasurer’s Report

&Statistical Information

2016 Asset & Share Growth

• Asset Growth = $16,663,918 or 9.54% National Average = 7.3%

• Share/Deposit Growth = $15,174,629 or 10.48% National Average =  7.0%

020,00040,00060,00080,000100,000120,000140,000160,000180,000

Asset and Share Growth

Loans Shares & Deposits

10 Year Growth History

 $‐

 $50,000,000

 $100,000,000

 $150,000,000

 $200,000,000

 $250,000,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

TBACU Growth History

Total Assets Total Shares Total Loans

Net Income and ROA

• YTD ROAA = 1.01%• 2016 Net Income =  $1,840,051

.77% ‐ National Peer Average

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Return on Average Assets0.00

200,000.00400,000.00600,000.00800,000.00

1,000,000.001,200,000.001,400,000.001,600,000.001,800,000.002,000,000.00

Net Income

Net Income For Month Net Income Year to Date

Capital = 14.83%10.92% ‐ National Average

• Capital Increased 6.87% or $1,823,905• Total Capital December 2016 = $28,365,536

 21,000,000

 22,000,000

 23,000,000

 24,000,000

 25,000,000

 26,000,000

 27,000,000

 28,000,000

 29,000,000

Financial Condition 2016 2015 Statement of Earnings 2016 2015

Assets Interest IncomeLoans 149,192,700 135,904,877 Loans 6,294,951 5,731,720Allowance for loan loss -419,656 -441,913 Investments 356,120 389,303Other Receivables 585,647 322,453 Total Interest Income 6,651,071 6,121,023Cash 9,301,794 9,652,332Investments 17,774,681 14,248,813 Interest ExpenseAlloya Capital Share Deposit 519,200 519,200 Members Savings 84,765 75,717Prepaid Expenses 991,575 1,052,568 Dividends 352,255 339,823Fixed Assets 8,519,524 8,748,821 Total Interest Expense 437,020 415,540Accrued Income 393,714 358,225NCUSIF 1,485,598 1,338,231 Provision for Loan Loss 267,585 186,176Other Assets 2,980,422 2,957,675Total Assets 191,325,200 174,661,281 Net Interest Income after

provision for loan loss 5,946,467 5,519,307

Liabilities and Equity Total Non-Interest Income 1,871,631 1,552,878Accounts Payable 3,592,905 3,651,420Accrued Liabilities 28,157 25,581 Non-Interest ExpenseOther Liabilities -185,165 115,768 Operating Expense 5,979,365 5,470,124Member Shares and Savings 159,943,423 144,768,794 Non-Operating Gain(Loss) -1,319 -14,377

Capital 27,945,880 26,099,718 NCUSIF Stabilization Expense 0 0Total Liabilities and Equity 191,325,200 174,661,281 Net Earnings 1,840,051 1,616,438

Financial Comparison

Membership Growth

17,191 membership accounts 16,429 members

13500 14000 14500 15000 15500 16000 16500 17000

Jun‐15

Aug‐15

Oct‐15

Dec‐15

Feb‐16

Apr‐16

Jun‐16

Aug‐16

Oct‐16

Dec‐16

Membership GrowthReason Codes 2016 Added % of TotalReferred by Dealer Finance 1,023  38.5%Referral 608 22.9%Student Run Credit Union 127 4.8%Seeking Lower Rates 225 8.5%Existing Member 220 8.3%

82.8%

2,672 New Members in 2016Growth of 6.2%

Electronic Services

16,429 

6,300 

1,610  1,778 

10,005 

100.0%

38.3%

9.8% 10.8%

60.9%

 ‐

 2,000

 4,000

 6,000

 8,000

 10,000

 12,000

 14,000

 16,000

 18,000

Members Active Debit Cards Remote DepositCapture

Bill Pay Email Statements

eStatementsIncreased 1,950 24.2% Growth

Remote Deposit Capture 710 New Users78.9% Growth5,210 checks @ $2,867,241

Bill Pay4.5% Growth 77 Net Users

29.3%

18% 

7.3% Growth 

Electronic Services

4,816 

2,963 

4,241 

337 

‐687

28933

 (1,000)

 ‐

 1,000

 2,000

 3,000

 4,000

 5,000

 6,000

Active Homebanking Mobile Web Banking Mobile App download Text Banking

Number of Users Growth for 2016

10.9% Growth2.1% of Members

Electronic Services

 ‐

 5,000

 10,000

 15,000

 20,000

 25,000

2010 2011 2012 2013 2014 2015 2016

ACH Origination

233 20,01415,32010,7278,2765,1272,340

30.6% Growth

Electronic Services

143,736 

139,548 

137,660 

142,654 

145,073

144,154143,606

 135,000

 137,000

 139,000

 141,000

 143,000

 145,000

 147,000

2016201520142013201220112010

ATM Transactions per Year

Chris MillironChief Lending Officer &

Credit Committee ChairpersonLending Report

TBACU Loan Mix 2016

NCUA – 2016 Loan Distribution

Auto Loans$72,768,093 

49%

Other Personal Secured & Unsecured $16,072,457 

11%

Real Estate$43,943,848 

29%

Personal Line of Credit

$1,511,483 1%

Credit Cards$3,961,445 

3%

Total Commercial including secured by Real Estate$10,935,375 

7%

TBA Credit Union Loan Portfolio Distribution

Total TBACU Loans ‐ $149,192,700

Loan Growth

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

70,000,000

80,000,000

2009 2010 2011 2012 2013 2014 2015 2016

Auto Loans & Real Estate

Auto Loans Real Estate

Secured Auto Growth 2016$72,678,093 or 6.78%

National Avg 12.28%

Real Estate Growth 2016 $43,943,848 or 17.34%

National Avg 9.79%

Real Estate Growth

Year End Mortgage Production

TBA Portfolio ‐ $43,943,848(Growth of 17.34%)

NMS Mortgages ‐ $30,647,811

Annual Growth of NMS Mortgages 45.93%!

Net Income from NMS Mortgages$213,397

 ‐ 5,000,000

 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 40,000,000 45,000,000 50,000,000

2010 2011 2012 2013 2014 2015 2016

Portfolio & Secondary Market Mortgage Loans

NMS Mortgages

Net Loan Growth• $13,287,823• 9.78%• Nat’l Ave Growth = 10.4%

Loan Growth

•Loan to Share Ratio = 93.28%•Peer Average = 79.5%

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

18,000,000

2009 2010 2011 2012 2013 2014 2015 2016

Other Personal Secured & Unsecured

Total Commercial including secured by Real Estate

Credit Cards

Personal Line of Credit

Other Areas of Loan Growth

Delinquency & Charge‐Off’s

2016 Year End Delinquency .89% or  $1,328,727

.83% ‐ National Average

2016 Total Charge‐ Offs.26% or $385,494

.55% ‐ National Average

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Charge‐offs

Delinquency

Adam BeVier, Chairperson

Report of Outside Auditors

Unfinished & New Business

Karen Browne on behalf of Nominations 

CommitteeElection Report

Adam BeVier, ChairpersonAdjournment