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UNITED TELETECH FINANCIAL FEDERAL CREDIT UNION ANNUAL REPORT
UNITED TELETECH FINANCIALFEDERAL CREDIT UNION
ANNUAL REPORT
2018 marked the 51st year of our service to you, our members. Sometimes it’s hard to keep track of how much has changed in the last week, let alone the last 51 years. We’ve grown from a few people wanting to provide a different type of banking access in 1967 at Bell Labs to a multi-million-dollar community credit union serving over 24,000 families in central New Jersey. It’s both wonderful and humbling to know that so many still find a financial cooperative to be their first choice when they want to do their banking.
As we have moved through these past years with various ups and downs that economic times have thrown into our path, we have kept one thing at the forefront of our thoughts: service to our members.
Today, your credit union has almost $32 million in net capital and has sustained this level of over 10% for the last several years. That level of reserves allows us to offer the services you’d expect from most sophisticated financial institutions, except with the friendly face of a neighbor there helping to look out for you.
Our credit union continues to lead in the community. We remain a founding supporter of the New Jersey Credit Union Foundation and a proponent of Fulfill, our community foodbank. The good work these organizations do to
help educate our children about banking concepts and feeding those in need aligns with our philosophy of people helping people.
As we look forward to our 52nd year, we expect to add new services to enhance convenience for members that don’t have time to make it to the office. With our new United Access account and mobile banking, you’ll be able to bank quickly and at your convenience without having to stop by one of our branches. Though we hope you will. Our team is passionate about helping you find ways to plan for your goals or meet some of the unexpected bumps you might face.
I am very proud of the work that our credit union team does every day to help you. They are a dedicated group, and our board and I are very grateful for them. They put the true meaning into the philosophy of “people helping people.”
Thanks to our dedicated volunteer board of directors. They devote hours of their time each month to ensure that our credit union is well run and meeting your needs.
We have an organization of which we should all be proud. United Teletech fills a need for many that would be irreplaceable. Thank you for continuing to choose us for your banking needs. Your support makes a difference in the lives of many of your fellow members.
Sincerely,
Ruth Ann Kluin Chair, Board of Directors
MESSAGE FROM THE CHAIR
Ruth Ann Kluin,CHAIRMAN OF THE BOARD
BOARD OF DIRECTORS
Ann WeingartnerTREASURER
Michael Hou 1ST VICE CHAIR
Derek Mahoney2ND VICE CHAIR
The credit union’s supervisory committee is appointed by the Board of Directors each year from the membership. Its mission is to provide an independent assessment of the credit union to ensure that the financial statements accurately reflect the financial condition of the credit union. To that end the committee conducts independent reviews of various internal controls. Additionally it engages an audit of the credit union each year by a Certified Public Accountant.
Our independent auditor, certified public accounting firm The Curchin Group, LLC,
in Red Bank, NJ, confirmed the accuracy of our financial position and soundness of our operations as of September 30, 2018.
The Supervisory Committee consists of Chair Irene Kurc; members Lew Ackerman, Christine Coari, and Randy Weihs; and Board Liaison Robert E. Hodges.
Thanks to the management team, staff and members of the Committee for their service to the credit union. Together we will continue to protect the interests of our members, both today and in the years to come.
SUPERVISORY COMMITTEE REPORT
Supervisory Committee: Irene Kurc, Chairman of the Supervisory Committee; Christine Coari, Lew Ackerman, and Randall Weihs
Irene Kurc,CHAIRMAN OF THE SUPERVISORY COMMITTEE
Robert HodgesBOARD MEMBER
Gilbert B. Harris SECRETARY
Bob Dowd BOARD MEMBER
Ruth Ann Kluin,CHAIRMAN OF THE BOARD
2018 was another year of solid financial performance from your credit union. We close the year having continued to provide our members with affordable products and services; excellent service experiences; and tools that make them “richer for knowing us.”
In many ways, 2018 was a year of repositioning for our credit union. The initiative to provide greater return of value to the credit union continues to see success. As of year-end, over 27 cents from every dollar we earn, goes back into credit union reserves. This level of operating efficiency places us on par with some of the largest credit unions in the state and provides a stable financial base for our future.
2018 was a year of economic improvement and a changing interest rate climate. The membership remained stable at approximately 24,500 members. However, assets were reduced by 5.6% to $302 million as we saw members take advantage of the improving economy to pay down their debt. The loan portfolio reduced by 9.8% to $243.5 million. Deposit balances reflected this trend with balances similarly declining by 4.4% to $275 million.
The credit union reduced expenses by nearly 20% from the prior year. As a result, earnings before Provision Expense were nearly $5 million and net worth remained steady at $22.8 million or 7.54% of assets.
Continuing its approach to reserve for possible loan losses in its business lending portfolio, the credit union set aside approximately $5 million dollars, resulting in Return on Assets of -$355,000 or -0.11%. Delinquent loans remains high at 5.74% as the credit union continues to work through a portfolio of troubled business loans. Reserves have shifted between Undivided Earnings and Allowance for Loan and Lease Losses; however, we maintain over 10.4% of assets, or $32 million, in capital. We remain well capitalized.
We would not have been able to achieve this level of performance without having undertaken a strategy to share resources with other credit unions. The investment in the Member Support Services consortium has enabled us to bridge the gap experienced by many small financial institutions trying to compete in major retail markets. We expect the investment in this initiative to continue to reap dividends for us in terms of improved service, reduced expenses, and access to programs we would not otherwise be able to offer.
In addition to its solid financial performance, United Teletech continues to deliver on its commitment to member service. We are known for the people we employ to help you with the financial decisions you face. 2018 saw more of our team become Certified Credit Union Financial Counselors. They meet with members every day and help them budget, learn how to improve
credit scores, use our technology to make things easier, and assess options regarding financial decisions they face. We are so grateful for their work and the impact they have on helping our members become richer.
In 2019 this team will be a major part of our strategy to help you “get there.” Driven by the philosophy of “people helping people,” “Let’s get there,” focuses our efforts on providing our members with more tools to help them achieve. We’re excited for the new programs, educational seminars, and services we’ll be rolling out to our members throughout 2019.
As the credit union enters its 52nd year of operation, it continues to enjoy a stable brand reputation with high usage of its products and services. These factors combined with its stable earnings base positions it for ongoing success in its communities. It does much good for its members and the communities it serves.
That good work would not be possible without the service of a dedicated group of volunteers and team that help members create financial well-being. Were it not for their efforts, we would not be as well positioned for the future as we are.
Thanks to this team for their good work and to the membership for choosing a small, locally controlled organization to help with their financial needs.
Leo R. Ardine President/CEO
MESSAGE FROM THE PRESIDENT
Executive team: Connie Cinko, Director of Talent and Organizational Development; Leo Ardine, President/CEO; Francis James, EVP of Administration/CFO
STATEMENT OF FINANCIAL CONDITION For the year ended December 31, 2018 and 2017
Assets 2018 2017Loans $243,495,690 $269,892,785Allowance for Loan Losses -$10,062,396 -$10,325,888Loans Held for Sale $311,340 $428,000Net Loans $233,744,633 $259,994,897Cash & Cash Equivalent $2,104,596 $2,304,564Investments $56,278,655 $45,998,291Fixed Assets $2,787,191 $2,987,594Other Assets $7,082,495 $8,554,383Total Assets $301,997,570 $319,839,729
Liabilities & Members’ SharesAccrued Dividends $74,635 $52,910Other Liabilities $4,658,227 $9,463,268Total Liabilities $4,732,863 $9,516,177Members’ Shares $275,360,135 $287,884,104Total Liabilities & Members’ Shares
$280,092,998 $297,400,282
Members’ EquityReserves $11,360,836 $11,643,791Retained Earnings $10,543,737 $10,795,657Total Equity $21,904,573 $22,439,447Total Liabilities, Shares & Equity $301,997,570 $319,839,729
STATEMENT OF INCOME AND EXPENSES For the year ended December 31, 2018 and 2017
Operating Income 2018 2017Income From Loans $12,814,423 $13,769,656Income From Investments $869,986 $918,956Fees & Charges $2,510,328 $2,609,324Other Operating Income $1,080,172 $1,256,460Total Income $17,274,909 $18,554,396
Operating ExpensesCompensation & Benefits $4,829,427 $6,308,737Office Operation Expenses $7,472,740 $9,330,921Federal Operating Fee $84,476 $80,578Total Operating Expenses $12,386,642 $15,720,235
Non-Operating Gain/Loss*Gain/Loss On Disposed Assets $293,146 $0Inc/Loss Before Dividends & Provision $5,181,413 $2,834,161Dividends $572,352 $744,123Provision for Loan Losses $4,963,897 $11,711,888Income before Adjustments -$354,836 -$9,621,850Net Income/Loss* -$354,836 -$9,621,850
* Negative amount represents loss, positive amount represents gain
400
300
200
100
02017 20182011 2012 2013 2014 2015 2016
MILLIO
NS
40
30
20
10
0
Income from Loans
Operating Expenses
Reserve (Net Income/
Loss)
Return to Members
Other Operating Income
Fee IncomeMILLIO
NS
24.98%
3.31%
71.70%
6.25%
Income from Investments
5.04%
14.53%
74.18%
2017 20182011 2012 2013 2014 2015 2016
ASSET GROWTH
400
300
200
100
02017 20182011 2012 2013 2014 2015 2016
MILLIO
NS
40
30
20
10
0
Income from Loans
Operating Expenses
Reserve (Net Income/
Loss)
Return to Members
Other Operating Income
Fee Income
MILLIO
NS
24.98%
3.31%
71.70%
6.25%
Income from Investments
5.04%
14.53%
74.18%
2017 20182011 2012 2013 2014 2015 2016
EQUITY GROWTH
400
300
200
100
02017 20182011 2012 2013 2014 2015 2016
MILLIO
NS
40
30
20
10
0
Income from Loans
Operating Expenses
Reserve (Net Income/
Loss)
Return to Members
Other Operating Income
Fee Income
MILLIO
NS
24.98%
3.31%
71.70%
6.25%
Income from Investments
5.04%
14.53%
74.18%
2017 20182011 2012 2013 2014 2015 2016
2018 SOURCES OF INCOME
400
300
200
100
02017 20182011 2012 2013 2014 2015 2016
MILLIO
NS
40
30
20
10
0
Income from Loans
Operating Expenses
Reserve (Net Income/
Loss)
Return to Members
Other Operating Income
Fee Income
MILLIO
NS
24.98%
3.31%
71.70%
6.25%
Income from Investments
5.04%
14.53%
74.18%
2017 20182011 2012 2013 2014 2015 2016
2018 DISTRIBUTION OF INCOME
2018 CAPITAL ANALYSIS
$40,000,000$35,000,000$30,000,000$25,000,000$20,000,000$15,000,000$10,000,000$5,000,000
-$5,000,000
Regular Reserves
Dec-15 Dec-16 Dec-17 Dec-18
$0
Unreal Gain on Investment
Other Reserves Undivided Earnings
Allow for Loan Losses
United Teletech’s mission is to find financial solutions for every person in our community. Sometimes the solution is a CD that offers a high rate to save more for your future, or a mortgage with a low down payment so that you can move into your dream home and start a family. Most of the time, the solution has to do with something else entirely.
The most important things in personal finance are spending and saving habits. Good habits will help you achieve wealth and financial independence which is why they’re at the foundation of how we help our members and a crucial part of our mission. When we say “Let’s Get There,” this is the how
– a well-built emergency fund, a written detailed budget, a positive cash flow, and a top tier good credit score.
United Teletech prioritizes these fundamental financial principals through a variety of educational resources. Throughout the year we run a series of seminars at our branches on a variety of topics ranging from homebuying to credit score to DIY classes.
Every branch location at United Teletech has certified financial counselors to sit with you for a one-on-one consultation on a variety of financial topics. Whether you need to improve your credit score, pay off debt, or save up for
your child’s education, our counselors can help you form a customized plan to accomplish your goals. By looking at your complete financial picture, and combining it with their years of experience and knowledge, they know what works and what doesn’t.
We believe in the power of financial education. The more you know about credit score, debt and budgeting, the better your future. That’s why we offer so many financial resources and make it such a priority when communicating and engaging with our members.
Let’s Get There! Visit our website and check out educational articles, seminar series, or schedule a one-on-one consultation.
To register for United Teletech’s seminars, visit utfinancial.org/seminars.
To schedule a one-on-one consultation with a certified financial counselor, visit utfinancial.org/schedule-consultation/schedule.
LET’S GET THERE
Where is there? As we start our “Let’s Get There!” initiative we have to know where “there” is. For a lot of people, especially Millennials, “there” is buying your first home.
Owning a home is and has always been part of the American Dream. Having a house that belongs to you - where you can raise a family and make a space your own - is a dream of many people we speak to each day. Recently, this dream has gotten harder to obtain. The challenges that today’s homebuyers face are the steepest of any prior generation.
After adjusting for inflation, today’s average wage has the same purchasing power as it did it 1978, yet home prices have tripled. Combine this with rising student loan debt, and a high cost of living area like New Jersey, it’s harder and harder to come up with a down payment. Despite these challenges, we were able to help hundreds of families buy homes last year.
One of the myths we hear over and over again is the 20% down payment. Many families who begin saving for a home believe they need 20% of the purchase price saved before they can purchase a home. United Teletech currently offers several mortgage programs, some of which only need
a 3% down payment. If a family believes they need a massive down payment, they may give up before they even start.
A home is a powerful and important tool in building wealth. It is a forced savings plan. A portion of each mortgage payment you make goes right back into the home. Historically, homes have been appreciating assets, meaning the price you sell it for will most likely be more than what you paid for it. Over time you will make more payments and your home will hopefully grow in value. This will create “equity” which can be tapped into to pay for children’s college, remodeling the home, or any sudden expenses.
Waiting for the 20% down payment may never come, and in that time, homebuyers are missing out on some of the great benefits of owning a home.
Our mortgage team will work with you to see what program will give you the best rate, affordable down payment, and a mortgage payment that works with your budget.
Visit utfinancial.org to schedule a consultation.
FINDING HOME
utfinancial.org 732.530.8100
MARLBORO67 US Highway 9 South
Unit #4Morganville, NJ 07751
NORTH BRUNSWICKThe Shops at Commerce Place
2201 US Highway 1 SouthSuite 119-B
North Brunswick, NJ 08902
NEPTUNE3636 Highway 33
Neptune, NJ 07753
TINTON FALLS205 Hance Avenue
Tinton Falls, NJ 07724
CAMPUS LOCATIONSIFF
600 State Highway 36Hazlet, NJ 07730
AT&T200 Laurel Avenue
Middletown, NJ 07748
