2 0 0 2ANNUALREPORT
Building a New Location to Better Serve Our MembersBuilding a New Location to Better
Chairman’s ReportThe uncertainty of the economy in the year 2002 affected Telco as well
as our members. Be assured our efforts are always directed toward main-taining the highest return to our savers and the lowest possible rates toborrowers.
Even with the slowed economy, we experienced a modest increase of1.85% in total gross income. Net income of 1.20% was realized by closelycontrolling expenses.
A healthy growth of over $11.6 million in shares reflects the trust mem-bers have in the stability of Telco. We recognize that some of this shareincrease may be the result of declining stock values and diminishing inter-est rates elsewhere.
Membership growth over the years has come mainly from groupsadded into our field of membership. During the past year, NCUA declaredTangipahoa Parish to be underserved and approved our application to pro-vide membership to any individuals who reside, work or attend school inthat parish. We are now actively pursuing this avenue of membershipgrowth.
To make Telco services more available to our members, we will soonoccupy a new building on Airline Highway at Briarwood Place in BatonRouge. This facility will meet our need for additional space and will bemore convenient to members in the southeast Baton Rouge and Ascensionareas.
Audits by the Supervisory Committee confirmed the high degree of sta-bility and continuing proper management of this credit union.
You will find details of Baton Rouge Telco Federal Credit Union opera-tions in other sections of this annual report. I invite you to closely reviewthem and direct any questions you may have to the Board or Management.
Once again, it has been a pleasure to serve you this year.
Win Landry, Chairman
Building a New Location to Better Serve Our Members
Supervisory Committee ReportThe supervisory committee is responsible for verifying the credit union’s
financial records and internal controls to assure the safety of member assetsand that operations are in compliance with State and Federal regulations.To accomplish this objective the supervisory committee performed the fol-lowing activities in 2002.
1. Reviewed the 2002 audit proposal and contracted the auditor.2. Directed quarterly audits performed by Grimball and Associates. In
2002, this included an E-Commerce audit to review issues related totransactions conducted over the Internet.
3. Held regular meetings to review operations, review audits, andaddress member concerns.
4. Met periodically with the auditor throughout the year to discussprogress, concerns, and findings.
5. Followed up on any audit findings to see that they were resolved sat-isfactorily.
6. Members of the Supervisory Committee took turns attending BoardMeetings to stay informed on Baton Rouge Telco Federal CreditUnion operations.
The Baton Rouge Telco Federal Credit Union was examined by the fed-eral examiners and is in compliance with the federal standards and lawsgoverning credit unions. Audits for 2002 were successfully completed andall issues were resolved. We look forward to another outstanding year in 2003.
Supervisory Committee:Chuck Carney, Chairman; Suzanne Diez,Secretary; Neal King, Member; Jim Mobley,Member; Brenda Nix, Member; FreddyeSmith, Member and Jay Terry, Member.
Chuck Carney,Supervisory Committee Chairman
Statement of Financial Condition
1998 1999 2000 2001 2002
TOTAL ASSETS IN MILLIONS80706050403020100
52.2 54.9 56.960.9
73.7
1998 1999 2000 2001 2002
47.7 52.2 54.9 56.9
TOTAL SHARES IN MILLIONS70
60
50
40
30
20
10
0
Key Financial RatiosTelco FCU Peer
Net Worth/Total Assets 12.52% 10.82%
Total Delinquent Loans/Net Worth 2.81% 4.44%
Delinquent Loans/Total Loans 0.62% 0.74%
Net Charge-Offs/Average Loans 0.44% 0.45%
Net Income/Average Assets 1.20% 1.01%
Net Operating Expense/Average Assets 2.53% 2.77%
47.6 49.152.3
63.9
45.6
ASSETS Dec. 31, 2002 Dec. 31, 2001
Loans to Members $43,342,951 $42,436,575
Loans Liquidating 7,176 63,205
Less Allowance for Loan Losses (264,327) (284,202)
Cash & Cash Equivalents 3,129,617 1,909,331
Investments 24,760,987 14,642,052
Furniture & Equipment 284,578 198,306
Land & Building 1,504,004 1,476,422
Construction in Progress 437,157 52,505
Other Assets 570,617 449,535
TOTAL ASSETS $73,772,760 $60,943,729
LIABILITIES
Accounts Payable & Other Liabilities $(2,921) $12,193
Dividends Payable 368 2,621
Total Shares 63,966,113 52,348,985
Regular Reserve 1,928,304 1,928,304
Undivided Earnings 7,880,896 6,651,626
TOTAL LIABILITIES $73,772,760 $60,943,729
Statement of Income
1998 1999 2000 2001 2002
TOTAL LOANS IN MILLIONS44
42
40
38
36
341998 1999 2000 2001 2002
INVESTMENTS IN MILLIONS30.0
25.0
20.0
15.0
10.0
5.0
0.0
37.2
40.3
43.2 42.4 43.3
11.9 10.3 10.414.6
24.8
INCOME Dec. 31, 2002 Dec. 31, 2001
Interest on Loans $3,507,913 $3,635,275
Income from Investments 864,396 695,584
Other Operating Income 866,795 812,733
TOTAL INCOME $5,239,104 $5,143,592
EXPENSES
Salaries and Benefits $1,090,959 $975,697
Travel and Conference 31,082 26,421
Association Dues 19,190 17,735
Office Occupancy & Operations 882,943 872,085
Educational & Promotions 40,205 38,590
Loan Servicing 105,464 130,270
Professional & Out. Svc. 90,513 88,583
Member’s Insurance 0 19,404
Provision for Loan Loss 170,000 226,000
Cash Over & Short 781 238
Annual Meeting 6,874 7,391
Misc. Operating Expenses 18,887 21,456
TOTAL EXPENSES $2,456,898 $2,423,870
Gain on Investments $445 $0
INCOME BEFORE DIVIDENDS 2,782,651 2,719,722
Dividend Expense 1,971,024 2,061,319
NET CONTRIBUTION TO CAPITAL 811,627 658,403
Regular Reserves 0 0
Undivided Earnings $811,627 $658,403
StaffOfficialsBATON ROUGE STAFF
MANAGER/CEODarryl K. Long
ACCOUNTINGLaurie ScaliseAccounting Supervisor
Dawn DodsonAccounting Clerk
Paula SpeedAccounting Clerk
COLLECTIONSNannette CouteeCollection Officer
Laura LejeuneCollection Officer
DATA PROCESSINGRobert TarverInformation System Specialist
LENDING Micky TassinLoan Supervisor
Sherri O’NealLoan Officer
Deidre LewisLoan Officer
Vi RuemkerLoan Officer
Pat BrownLoan Processor
Bernie HimelLoan Auditor
MARKETINGCharlene RocaMarketing Director
Lisa GillBusiness Development Officer
MEMBER SERVICESTrina PortuneMember Services Supervisor
Nicole SpiersCard Service Clerk
Heidi Andre’IRA Specialist
Claire LortieNew Accounts Rep.
Debbie CampbellSenior Member Services Rep.
Kory ClardySenior Member Services Rep.
Darla BradfordMember Services Rep.
Joe GremillionMember Services Rep.
Lori FreemanMember Services Rep.
BOARD OF DIRECTORSWin LandryChairman
A. P. LandryVice-Chairman
Darrell GoudeauTreasurer
Marianne MerrittSecretary
Andrew EamesDirector
Floyd EskineDirector
Dell OliverDirector
SUPERVISORY COMMITTEEChuck CarneyChairman
Suzanne DiezSecretary
Neal KingMember
Jim MobleyMember
Brenda NixMember
Freddye SmithMember
Jay TerryMember
NOMINATING COMMITTEEB. B. JohnsonChairman
Rose EmanuelMember
Margaret FletcherMember
Herbert LandryMember
Johnny RingeMember
Tracie NettlesMember Services Rep.
Mandy RamagosMember Services Rep.
Kendrick ScottMember Services Rep.
Paula SullivanMember Services Rep.
Elizabeth ThousandMember Services Rep.
Laure WilliamsonMember Services Rep.
REAL ESTATEMona WorthyReal Estate Specialist
HAMMOND BRANCH STAFFDebbie StevensBranch Manager
Crystal StewartLoan Officer
Rose StahlSenior Member Services Rep.
Melanie LeBoeufMember Services Rep.
Diane ValureMember Services Rep.
LOCATIONS ANDCONTACT INFORMATION
Airline Office13404 Airline HighwayBaton Rouge, LA 70817(225) 924-8900(800) 634-3044
Wooddale Office2226 Wooddale Blvd.Baton Rouge, LA 70806(225) 924-8900Fax (225) 923-3136(800) 634-3044
Hammond Office1115 W. University Ave.Hammond, LA 70401(985) 542-8086Fax (985) 542-4482(800) 400-1761
Under Construction