2018 A N N UA L R E P OR T
H A RVA R D U NI V ERSI T Y EMPL OY EE S CR EDI T U NION
Our Vision
Harvard University Employees Credit Union aspires to be a trusted partner in our members’ financial lives. We add value to membership by offering the best possible price, the highest quality personal service and sincere, sound advice. We seek to be known as a community leader and to deepen our long standing commitment to housing issues, green initiatives, financial literacy and access to credit for low and moderate income borrowers. We work toward transformational growth and change without relinquishing the core values we hold today. We are a not-for-profit cooperative which exists solely for the best interest of our members. We value integrity and responsibility in all of our actions. We strive to enhance our communities and create solutions for social, environmental and economic issues.
Highlights
A RECORD-SETTING YEAR
875
49,774
2%
NEW MEMBERS NET 2018
TOTAL MEMBERS YEAR END 2018
MEMBERSHIP GROWTH
Surpassed $732 million in assets 1940
19
1950
1960
1970
1980
1990
2000
2010
2018
NEWLY CREATED POSITIONS
1,685,325 HUECU ANNUAL REPORT
11
PROMOTIONS
CUMULATIVE HOURS OF WORK EXPERIENCE
4%
GENERATION Z (1996 – 2 010)
34%
MILLENNIALS (1980 – 1 995)
6%
HUECU members by
THE SILENT GENERATION (1925 – 1 945)
GENER ATION
28%
28%
GENERATION X (1965 – 1 979)
BABY BOOM GENERATION (1946 – 1 964)
STUDENT LOA NS
FINA NCI A L W ELLNESS
COMMUNIT Y IN V ESTMENT
SERV ICED LOA NS TO 41 DIFFER EN T SCHOOLS FROM MEMBERS IN 49 DIFFER EN T STAT ES.
3 ,2 42 COM MU N I T Y MEMBERS AT T EN DED A PERSONA L FINA NCE CL A SS HOST ED BY H U EC U.
5 SCHOL A RSHIPS AWA R DED TO LOC A L HIGH SCHOOL SEN IORS.
237,146
BR A NCH T R A NS AC T IONS
79,474
CON V ERS AT IONS W I T H T HE SU PPORT CEN T ER
2018
Report from the Chairman & CEO George White Chairman of the Board
Eugene J. Foley President & CEO
In 2018, Harvard University Employees Credit Union continued to shatter records. We reached $732 million in total assets, a pinnacle for HUECU, while our mortgage servicing portfolio hit an all-time high of $789 million. These unprecedented achievements, along with vigorous growth in membership and products, are testament to the top quality benefits HUECU continues to provide to the communities we serve. A NOT HER R ECOR D -SET T ING Y E A R
S TAT E OF T H E I N DU S T RY Banks and
R E A C H I NG N E W M I L E S T ON E S In 2018 we
credit unions have long been subject to disruptive
saw record-breaking performance across the board.
technologies, shifts in government regulations and
Overall assets grew by a remarkable 15% to reach a
tax codes, inflation rates, economic policies, and
total of $732 million by the end of the year, with solid
more. Across the nation, the credit union industry
earnings performance.
experienced another year characterized by major changes and another year of strong performances.
Our mortgage servicing portfolio hit an all-time high of $789 million. More than 700 community members
New digital solutions and automation have helped the
started their home buying journey by attending one
industry increase productivity and improve member
of our workshops designed for first time home buyers.
experiences.
First mortgage originations for the year amounted to
Overall assets experienced a robust growth of 6.5%, with total assets of U.S. credit unions at more than $1.45 trillion by the end of the third quarter in 2018. Loan
$201.3 million, while purchases rose by 14%, which helped overcome a continued slow-down in refinancing activity.
balances rose by 9.0%. Credit unions in the U.S. also
HUECU continues to strengthen its commitment to
saw a robust 3.5% growth in new members by the end
higher education by ensuring students and families
of 2018.
within the Harvard community have access to
The total number of U.S. credit unions continued to decrease in 2018, albeit not as quickly as the year before. Falling by 2.4%, the year-over-year decline is consistent with long-running industry consolidation trends. HUECU ANNUAL REPORT
affordable educational loans, and the resources to help make smart borrowing decisions. This year, our educational lending hit an all-time high of $45.9 million in new loans. This is a result of innovation in our
graduate student loan programs, significant improvements to our online applications, and a focus on the member online experience. In addition, the Educational Lending team has grown, allowing HUECU to invest additional time and resources in educating members on debt management, counseling and outreach initiatives. These strong performances, along with a 2% membership growth, demonstrate that our community continues to find significant value in products and services offered by HUECU. E VOLV I NG A N D E X PA N DI NG OU R S E RV IC E In 2018 we further developed several benefits to help our members meet their financial goals. We continue to be deeply committed to helping students reach their financial and academic goals. In 2018, we awarded five $1,000 scholarships to deserving high school students preparing to start their first year of college. We are proud to invest in the future of our young members by supporting their higher education goals. As a community partner, we seek to provide students with handson experience that will prepare them to excel as thoughtful, balanced community and business leaders. With that goal in mind, in the fall of 2018 we launched a new undergraduate student group called the Student Advisory Council that aides us in our pursuit of campus-wide financial wellness. The inaugural cohort is consulting with us on our financial education programming, university engagement events, and student banking services. Moreover, through harnessing emerging technology and digital communication channels, our free financial education is reaching more community members than ever before. Last year, we led or contributed to over 150 workshops, seminars, and talks that were
community E A R T H DAY, C L E A N T H E S QUA R E Our employees joined other members of the Harvard Square Business Association in spring cleaning the square on Earth Day. Trash was swept from the streets, garbage bins were powerwashed, and walls were primed for colorful murals.
Y2Y YOU T H S H E LT E R A N D T O Y DR I V E Over the holidays, employees donated winter clothing, nonperishable food, and over three dozen children’s toys to the Y2Y Youth Shelter run by students from Harvard College. Additional funding was raised to cover gas money for the toy distribution van, as well as fresh meals, laundry services, and cleaning supplies inside the shelter.
C A R D S F OR HO S P I TA L I Z E D K I D S For the fourth year in a row, HUECU gathered the community at Partners HealthCare System to craft cards and write messages of inspiration for hospitalized children at Boston Shriner’s Hospital for Children, Boston Children’s, Dana Farber Cancer Institute, MGH Hospital for Children, and Spaulding Rehabilitation.
J E A N S F OR T H E J I M M Y F U N D Together we celebrated the start of Boston’s baseball season at work, while also supporting critical cancer research and patient care at Dana-Farber Cancer Institute. Our employees rallied to support the Jimmy Fund by donating and wearing jeans on Opening Day at Fenway Park.
F E N WAY C OM M U N I T Y DE V E L OPM E N T We celebrated Fenway Community Development Corporation’s 45th Anniversary at the annual Fenway Ball, which benefits the programs of Fenway CDC that work to improve the economic and social well-being of thousands of low and moderate income residents in the Fenway neighborhood.
attended in-person or virtually by over 3,200 members of our community worldwide. We are proud to share our expertise on
HOF F M A N B R E A S T C E N T E R
a variety of topics including the home buying process, financing
In recognition of National Breast Cancer Awareness Month, HUECU staff and members wore pink in October to raise funds for research and treatment at the Hoffman Breast Center at Mount Auburn Hospital.
college, establishing or repairing credit, creating a personal budgeting, and saving money. S A LU T I NG T H E H U E C U T E A M Exceptional service, delivered with quality and integrity, is a long tradition for HUECU— one that would be impossible without the talent and dedication of our staff.
B O S T ON M A R AT HON T E A M S In honor of the strength of our city, its people, and their generosity, we supported many local charity runners in the Boston Marathon, including MGH teams for Pediatric Oncology and Emergency Medicine, Team Mass Eye and Ear, and Harvard College Marathon Challenge team raising money for Phillips Brooks House Association.
As we work towards yet another year of growth and technology enhancements, HUECU will continue to enhance our members’ lives and financial wellbeing through sound business practices, innovative development strategies, our hardworking staff and Board, and of course, the loyalty of our nearly 50,000 members—for whom we will continue to provide sincere, best-in-class service.
BUILD-A-BED A giant stuffed teddy bear named Tuck had a week-long sleepover in our Harvard Square branch to raise funding and community awareness for the “A Bed for Every Child” initiative from the Massachusetts Coalition for the Homeless. Together our community raised enough money for a bed to be built for a local child.
2018
By the Numbers HOME LOA NS
MORTGAGE OR IGINAT ION
2016
$1 81 .6
2017
$208.7
201 8
$201 . 3
MILLIONS
297
MORT G AGE S T O F IR S T-T I M E HOM E BU Y E R S
742
OF OU R M E M BE R S S TA RT E D T H E IR HOM E BU Y ING JOU R N E Y WITH US
ST U DEN T LOA NS
ST U DEN T L OA N B A L A NCE S
2016
$95.9
2017
$10 4.0
201 8
$1 2 3.6
MILLIONS
$ 3.3
MIL L ION
S T U DE N T L OA NS R E F INA NC E D
HUECU ANNUAL REPORT
2018 CHECK ING
CHECK ING ACC OU N T B A L A NCE S
2016
$9 9. 2
2017
$1 10.9
201 8
$1 1 4.8
MILLIONS
6,049 MOBIL E C H E C K DE P O SI T U SE R S
CREDI T C A RDS
CR EDI T C A R D SPEND
2016
$1 26.0
2017
$1 33.9
201 8
$1 37.8
MILLIONS
123,394,335 R E WA R D S P OIN T S E A R N E D
2018
Report from the Treasurer
John T. Litchen Treasurer
The Credit Union continued to perform strongly, posting another year of solid earnings. Assets increased by 15%, with a year-end total of $732 million.
Positive growth was realized in all areas of the Credit Union; membership, loans, and deposits. Loan quality remained high within all loan product segments. As reflected in the unaudited financial statements, the Credit Union continues to be a well-capitalized, financially strong institution where members can feel confident saving and borrowing. The Board, management and staff are to be commended for their contributions to our success.
DEPOSITS OVER 5 YEARS
LOANS OVER 5 YEARS
IN MILLIONS
IN MILLIONS
$600
$600
$500
$500
$400
$400
$300
$300
$200
$200
$100
$100
2014
2015
2016
2017
2018
2014
2015
2016
2017
2018
4%
22%
CHECKING
6%
3%
AUTO LOANS
6%
SECOND MORTGAGES
IRAs
CREDIT CARDS
3% OTHER
14%
CERTIFICATES
25%
DEPOSIT DISTRIBU TION
MONEY MARKETS
LOA N DISTRIBU TION
19%
STUDENT LOANS
36%
62%
SHARES
FIRST MORTGAGES
HUECU ANNUAL REPORT
Statement of Condition
SEL EC T ED DATA IN M IL L IONS
ASSETS
2017
2018
Cash & Cash Equivalents
33.8
33.9
Investments
39.4
30.8
545.3
648.3
Property & Equipment, net
1.7
3.2
National Credit Union Share Insurance Fund Deposit
4.8
5.1
Other Assets
10.0
10.9
Total Assets
635.0
732.2
Members’ Shares
525.8
557.7
Borrowed Funds
39.0
96.0
Accrued Expenses & Other Liabilities
12.6
14.3
577.4
668.0
Retained Earnings, Substantially Restricted
57.8
64.4
Accumulated Other Comprehensive Income
-0.2
-0.2
Total Members’ Equity
57.6
64.2
635.0
732.2
Loans to Members, net
LIABILITIES & MEMBERS’ EQUIT Y Liabilities
Total Liabilities Members’ Equity
Total Liabilities & Members’ Equity
Statement of Income
SEL EC T ED DATA IN M IL L IONS
INTEREST INCOME
2017
2018
Interest Income from Loans & Investments
25.2
29.1
Interest Expense for Members’ Accounts & Borrowed Funds
-1.9
-3.4
Loan Loss Provision
-1.5
-2.2
Net Interest Income After Provision for Loan Losses
21.8
23.5
6.5
6.4
-20.8
-23.3
7.5
6.6
Other Income Operating Expenses Net Income
2018
Report from the Audit Committee
Dee Dee Chen Committee Chair
The Audit Committee is composed of five Directors dedicated to ensuring that the Credit Union’s actions are held to the highest standards of integrity and value.
Throughout 2018, the Committee met regularly to
Reimbursements to Board Directors, including other
review the monthly financial statements and audit
general expenses associated with Board meetings,
reports, as well as to discuss other operational topics
conferences, trainings, committee meetings and
of interest. We are assisted in our efforts by external
planning sessions within 2018 totaled $79,465. No
firms that provide audit support of the Credit Union’s
reimbursable expenses to members of the Audit
finances and internal controls. Wolf & Company, P.C.,
Committee and Credit Committee occurred. All Board
audits our financial statements.
Director expenses and reimbursements were made
Internal audits continued to receive significant attention during 2018. Healy & Healy, our partnered firm, performed internal audits throughout the
in compliance with the regulations of the National Credit Union Administration and the Massachusetts Division of Banks.
year to test Credit Union procedures and controls in
The Committee wishes to thank the Credit Union
branch operations, wire transfers, deposit operations,
management for their cooperation, support and
mortgage and student loans, among other areas. The
assistance throughout the year.
Committee reviewed their findings and management’s responses and continues to actively work with management on suggested areas to strengthen our processes and mitigate risk.
Committee Members
Guillermo Banchiere
Karrie Ford
Jim Barrows
George White
Dee Dee Chen
HUECU ANNUAL REPORT
Officers
Eugene J. Foley President & CEO
Craig Leonard Executive VP, CFO
Peter Buchanan SVP, Real Estate Lending
John Degnan SVP, Operations
Tom Montilli SVP, Chief Marketing & Retail Officer
Board of Directors
Guillermo Banchiere Since 2007
Jim Barrows Since 2015
Dennis Campbell Since 2013
Dee Dee Chen Since 2015
Ann Dexter Since 2015
April D. Edrington Since 2016
Karrie Ford Since 2014
John Lichten Treasurer Since 1992
Thomas Lucey Since 2006
Jason Luke Since 2014
Jeremiah Murphy Vice Chair Since 2003
Susan G. Simon Since 2017
Mary Straub Clerk Since 2004
George White Chairman Since 1999
Shahar Ziv Since 2016
2018
HUECU ANNUAL REPORT
Thank You We would like to thank all of our partner organizations for their continued support and participation in the Credit Union.
Our Partners The Harvard University Employees Credit Union is proud to offer our services to the employees, students and alumni of Harvard University, Harvard teaching hospitals and affiliated organizations.
American Repertory Theater
Harvard Pilgrim Health Care
Beth Israel Deaconess Medical Center
Harvard University
MGH Institute of Health Professions Mount Auburn Hospital
Boston Shriners Hospital
Harvard Vanguard Medical Associates
Partners HealthCare System
Brigham and Women’s Hospital
Lesley University
Spaulding Rehabilitation Hospital
Dana Farber Cancer Institute
Massachusetts Eye and Ear Infirmary
The Harvard/MIT Coop
Dumbarton Oaks Research Library
Massachusetts General Hospital
Harvard Business Publishing
Massachusetts Mental Health Center
Harvard Management Company
Medical Academic and Scientific Community Organization
WGBH Boston
2018
617.495.4460 huecu@harvard.edu @myHUECU
H U EC U.ORG
OU R M I S S ION
Enhance our members’ lives by providing trustworthy products that are easy to understand, easy to use and best suited to meet their financial needs.
Your savings are federally insured to at least $250,000 and backed by the full faith and credit of the United States Government.