Jean Hauser
Chair, Board of Directors |
From the Chair
2005 presented significant challenges for Elevations Credit Union, Colorado, and the
economy. One obstacle was the margin squeeze - the reduction in the difference
between what the credit union could charge for loans (income) and what the market
demands in dividends paid on deposits (cost of funds). The diminishing margin was the
result of an increasing interest rate environment and a very competitive market.
Another hurdle was a result of the change in the bankruptcy law. While your Board of
Directors anticipates greater protection for member assets with that change, record
numbers of people rushed to file for bankruptcy before the new law went into effect on
October 17, 2005. This "rush to bankruptcy" resulted in an unprecedented increase in our
provision for loan loss. |
The combination of the margin squeeze and bankruptcy law revisions created a "perfect
storm" for financial institutions that required your credit union to scrutinize every penny
spent, every resource used, and every project undertaken. The call to action for
Elevations Credit Union in 2005 was "efficiency without member impact." We successfully
maintained a strong capital position and avoided the negative return on assets that many
credit unions suffered.
The future of Elevations Credit Union can only be secured through growth, a strong balance sheet,
and expanding membership within the framework of our credit union philosophy. To
secure our future, your Board of Directors reaffirmed the following strategies.
Growth
Membership and asset growth are essential to the survival of Elevations Credit Union. The CEO Report states our mutual position: An organization is either growing or
withering away. Elevations Credit Union has created a strong and resilient presence in Boulder and
Broomfield counties, and has the strategies in place to leverage this brand and position.
Included in our growth strategy for 2005 was the direction to change our name. We
realize that our name, Elevations Credit Union, creates a perception of exclusive
membership. Communities we serve assume that they must be associated with the
University of Colorado to be eligible to join. This is now far from the truth. Over 54
years, we have expanded partnership companies to over 150. In the past few years we
have actively partnered with groups that transcend traditional employer partnerships.
These organizational partnerships include Colorado Shakespeare Festival Guild and the
CU Alumni Association. Through these avenues, a prospective member only needs to
align with one of the groups to gain full member access to Elevations Credit Union. The Board of
Directors therefore determined to change our name to one that is inclusive and enduring.
Member Access and Transaction Security
A key 2005 goal to improve member accessibility was the Longmont Branch, which
opened in March 2006. With over 5,000 members in Longmont, this branch serves two
purposes:
- Creating new, easy access that is convenient to the important members that live,
work, or do business in Longmont.
- Providing a location to maximize the growth potential of the Longmont
community as it continues to grow as a vital economic and business center for
Boulder County.
Personal information and transaction security is also a critical strategy. By investing in
the necessary security firewall and intrusion detection software and heightened secure
passwords, we are committed to protecting your accounts. We want you to feel confident
transacting your financial business with us safely, whether in a branch, online, at an
ATM, or at a service center
Maintaining a Strong Balance Sheet
As the Board of Directors, we represent you, the member/owner. Maintaining Elevations Credit Union as a financially sound organization is of premier importance. Strategies include:
- Aligning operating expenses with peer credit unions.
- Increasing the credit union's Return on Assets (ROA).
- Vigilant oversight of the balance sheet and organizational policies.
- Increasing diversity of our membership and Board of Directors.
This last strategy includes actively increasing membership in Boulder and Broomfield
counties. It also involves expanding our field of membership (those groups we are
allowed to serve by regulation). Diversity of membership will stabilize our financial
position to best serve you during all economic cycles.
Providing "Stellar" Member Service
This strategy is really the point of all interactions between members and your credit
union. Two years into a long-term strategy, we are providing the training and resources
to branch staff that will allow these important employees to "dazzle" you with their skill,
accuracy, and ability to assist you in getting the information necessary to make educated
decisions in your financial life.
Serving Those of Modest Means
The Board of Directors identified students at the University of Colorado, the aging 50
and Better residents of Boulder and Broomfield counties, and the need for permanently
affordable ho using in Boulder County as the focus of our efforts to provide financial
services to underserved markets in our constituency. A critical association is our
partnership with Thistle Community Housing and the Alliance for the American Dream,
which benefits from our continuing strategic commitment to return 2% of net income
annual to our community.
Your volunteer Board of Directors is dedicated to preserving your credit union as a
consumer choice in financial services, and continually improving the convenience and
offerings you enjoy for long-term success. We are honored to serve as your voice, and
welcome your feedback.
Bill Sterner
President/CEO |
From Your CEO
A Quick Glimpse Back
Late in 2001, the Senior Leadership Team at U of C Federal Credit Unio n developed our
Strategic Plan. This Plan was designed to be our road map to a robust, financially secure
and healthy future for the credit union. After four years of following this road map, we
can demonstrate significant progress. Some of this progress is obvious. |
- Our assets have grown from under $500M to over $691M.
- Our membership has grown from a little over 60,000 members to over 78,000
members.
- Our branch network has expanded from 5 full- service branches to 7 branches with
the opening of the Longmont Branch in March.
- The CO-OP ATM Network has grown from approximately 11,000 ATMs to be
the largest ATM network in the world, with over 25,000 ATMs for member
access.
- Our financial education seminar series has become the best in the financial
services industry. In 2005, we hosted over 60 seminars averaging over 40
member and non-member attendees.
- We launched a "best of breed" online banking system (Link24) to provide
advanced functionality and the best online security in the industry.
- We moved our "back office" operations into a fully secure, technologically
advanced facility that was designed to help us manage our future growth and
expansion.
- The community voted us Best Financial Institution for the seventh consecutive
year in the annual Daily Camera Readers' Poll.
Some of our progress was not as obvious but is still notable:
- We achieved a 19% market share in Boulder County (17% in Boulder and
Broomfield counties combined).
- We continue to be financially strong and well capitalized.
- We continue to earn high marks from the federal regulators for financial strength
and expert management.
- We have grown and expanded membership avenues to allow virtually any citizen
who resides, works, volunteers, worships, goes to school or just shops in Boulder
and Broomfield Counties to have access to Elevations Credit Union as the financial institution
of choice.
- We gained local and national prominence for our charitable giving and work with
many communities we serve and many local non-profit organizations.
- We redefined our business model to focus on providing the community and our
membership with unbiased consumer advice and resources to be smart consumers
via RealityCheck.
Reviewing this progress, I am aware at how critical our commitment and discipline to
this strategic plan has been. This commitment has resulted in Elevations Credit Union becoming a
visible and viable banking alternative in Boulder and Broomfield counties. With only six
credit unions over $500M in assets in Colorado, we belong to an elite group of credit
unions that hold 50.1% of all credit union assets and 39.9% of all members in Colorado.
The number of credit unions in Colorado continues to decline due to mergers and
consolidations but the number of members has continued to grow because of our
commitment to competitive products and convenient access. We have expanded our
products portfolio to include Dividend Checking, eStyle Checking, No Closing Cost
Mortgages and more. As members of the shared branching and CO-OP Network, we
offer over 2,000 branches and over 25,000 ATMs nationwide. Because of Elevations Credit Union's
market presence, we have reached critical mass in Boulder and Broomfield counties and
are a significant force in this competitive financial services marketplace. Together with
our strong capital position, our unique solutions-based business model and our visibility,
Elevations Credit Union continues to be well positioned to grow organically and through mergers to
expand our product and service offerings.
Now we will "Invent Our Future."
I know that Elevations Credit Union cannot succeed by just wishing for financial strength and
growth. We must continue to evolve our strategies and tactics to meet the demands of a
dynamic industry and competitive marketplace. We will invent our future because your
Board of Directors, the senior leadership team and the entire staff have made a
commitment to the following:
- To continue to focus our attention on membership growth and member retention.
As with any organization, there are no plateaus. You either grow or you slowly
fade away - we choose growth.
- To be the first and best choice for deposits, loans, investments and more by
expanding and innovating our product and service offerings.
- To earn the trust of each account holder daily with each transaction and each
conversation, whether it is in person, on the phone or via ElevationsCU.com.
- To provide you with the safest and most secure facilities and technologies to
conduct your business.
- To provide you with a staff that is sincerely concerned about your financial wellbeing.
- To provide a staff that has the expertise and professionalism to help you make
important life and financial decisions.
- To be a safe haven for consumer and product information and advice.
- To be a strong and financially sound local competitor.
For this last commitment (to be a strong and financially sound local competitor) to
become a reality, we must partner with you, the member. The only way we can meet the
demands the sophisticated consumer expects is with a strong balance sheet and
diversified membership. In a credit union, we cannot only rely on our "investment
portfolio" for income; we become strong through member engagement and participation.
A strong balance sheet is the direct result of members being engaged, involved and
participating more with their credit union. This is realized when members trust us with
their deposits, loans and investments. This is realized when members consider us their
first and best choice for all their banking services. Elevations Credit Union not only offers
consistently better rates and fees, but we are also a safe haven from the hype and
distortion that exists in the financial services marketplace. We rely on the circle of
prosperity - when members actively participate by choosing our product and service
offerings, they prosper, and as they become financially more successful,
Elevations Credit Union becomes more successful and can offer more products and services at
competitive rates and lower fees.
A diversified membership is realized by broadening and expanding our membership
base - more members, more deposits, more loans, more investments. When members
participate by choosing and using our products and services, we can fund the branches,
ATMs, products and service choices our members need and expect. One of our missions
is to serve members of modest means. Elevations Credit Union has distinguished itself by creating
membership diversity through our commitment to youth. Our efforts produce service and
education offerings for the students at the University of Colorado that are leading the
industry. We also distinguish ourselves in the services we offer through our 50 & Better
Club. Challenged with the mission of growing membership and providing education for
Boulder/Broomfield County residents who are 50 years old and beyond, we have a best
of breed financia l education seminar program, with many of the programs directed to this
important market. Also, through our partnership with Thistle Community Housing and
the Alliance for the American Dream, we help create permanently affordable housing in
Boulder and Broomfield counties so that those of modest means can afford to live where
they work.
A primary tenet of our strategic plan is to be that trustworthy resource for the information
and the tools you and your neighbors need to be smart, educated consumers. Our motives
are obvious - our success is co-dependent on our members' success. We are "not for
profit, not for charity, but for service." This credo statement is shared by all credit unions
and realized by Elevations Credit Union's commitment to serve. We are in this together, forever.
If you need more reasons to increase your participation or to become an ambassador for
Elevations Credit Union, visit WhyWeAreBest.org.
Lines of Business
Elevations Credit Union is different than what most expect of a credit union. Beyond the local,
friendly service, we offer a full range of financial products that exceeds the normal credit
union profile. In addition to the typical deposit and loan products, Elevations Credit Union is a highly
integrated financial services company. For example, instead of just offering basic savings
and deposit products, Elevations Credit Union has a full service investment broker and complete trust
services that allow us to serve the total financial needs of all consumers, from the student
opening their first account to the most financially sophisticated.
Even our consumer banking and finance products differ significantly from the norm.
While offering a complete suite of loan and deposit products, our focus is to provide
objective and trustworthy consumer information and advice to support educated and
informed consumers. Decisions about even the most basic financial products and
services are very clouded today with hidden fees, penalties and binding mandatory
arbitration agreements. Unlike most other financial services companies that are required
to divide their loyalty between shareholders and consumers, our purpose is to inform,
educate and serve our members and the community. We want to be the very best in
serving you, the consumer.
Consumer Banking
The consumer banking segment of Elevations Credit Union contains banking, card services,
consumer credit, mortgage and home equity services and consumer deposits services. We
actively work with and encourage our account holders to purchase products based on
unbiased consumer advice and their needs. A few examp les of our exciting consumer
banking products are:
"Elevations Credit Union Free Checking" the basic checking account without any hidden fees;
"Elevations Credit Union Dividend Checking" pays dividends on the checking balance and is tied to
balances in multiple deposit accounts, and provides significant value with free online
banking, free bill pay and others;
"Elevations Credit Union eStyle Checking" pays dividends on the checking balance and is tied to
aggregated balances in loans and deposits, while rewarding the member who chooses to
transact their business via Link24 or Call24.
Jumbo Money Market and Certificate accounts that pay extremely competitive dividends
on deposits. A clear difference between our Money Market offerings and the competition
is the way we developed the product. Instead of allowing balances to dictate the interest
earned, the product dictates the interest earned. This allows us to pay a higher interest
rate per tier than the traditional method of money market tiering.
Auto Loans that do not differentiate rate based upon the term of the loan or whether the
car is new or used.
Mortgage loans that have a higher conforming balance, zero closing cost options and
terms of up to 40 years. We have carefully developed a mortgage suite of products that
specifically avoids some of the "predatory" products in the market like interest-only
mortgages.
Credit Cards that have a fair price without a Binding Mandatory Arbitration Agreement
hidden in the terms and conditions, and without a lot of the predatory and "hidden fees"
found elsewhere.
In addition to consumer banking services, we also offer investment brokerage services,
trust services, legal services, auto buying services, credit counseling services and tax
services. Elevations Credit Union provides virtually all of the best of breed products and services
you would need and expect from a sophisticated financial institution while also giving the
friendly service you expect from your local credit union.
Organizational DNA
Elevations Credit Union is the end result of 54 years of locally providing consumer
banking products and services in Boulder and Broomfield counties. Founded for the
faculty and staff at the University of Colorado, we now serve over 150 diverse groups
through the Boulder and Broomfield marketplace. We service this broad market with a
welcoming, open attitude toward membership. The management and business model has
remained consistent through all of our changes. We are anchored to our heritage as a safe
haven for banking products, services and unbiased consumer information and education.
Supervisory Committee Report
During 2005, the Supervisory Committee met regularly to carry out its duties of
representing the membership and safeguarding your Credit Union's assets.
The annual audit on the financial statements of December 31, 2005 was conducted by
McGladrey & Pullen, Certified Public Accountants.* Their audit findings portray an
effective and solid financial operation.
The Supervisory Committee confidently reports that your Credit Union's records
accurately reflect its financial condition and that its operations are handled according to
Board policies and procedures.
The Committee expresses its appreciation to the Board of Directors and staff for their
participation in the Credit Union's success over the past year.
*McGladrey & Pullen, LLP is a member firm of RSM International - an affiliation of separate and
independent legal entities. |
