Planning for the Needs of our Members... Today and Tomorrow
It is our responsibility to ensure SeaComm continues to meet the ever-changing needs of our membership. We are very excited about the launch of our mobile deposit capture platform. In addition, our Board of Directors continue to ensure we will be viable well into the future through strategic planning by leveraging our property at 30 Stearns Street and expanding to formulate needed office space to meet the continually evolving technological advancements demanded by our members, as well as to ensure each of our buildings is being utilized as efficiently as possible.
As a result of good planning guided by our Board of Directors, solid management, talented staff and commitment of our membership, SeaComm has not only been able to withstand the economic instability we have experienced since 2008, but has grown during those years. Today, we serve 40,500 and are always looking to what's next to ensure we are not only meeting what our members want, but to stay in compliance with our regulator, the NCUA.
Last fall, we announced a $5.1 million 51,870 sq. ft. expansion onto our headquarters in Massena, while at the same time consolidating our retail branches and Call Center operations. Why is it necessary? The fact is we have run out of space. Some of the staff is in less than what we would consider optimal space and we want to improve upon it. Combine that with our 20% membership growth over the past six years and it has become necessary to expand key areas in order to sustain our overall strategic plans outlined by the Board of Directors. So, over the next ten years we see a potential need to increase staffing levels in accounting, information systems, risk management, card services, human resources, internal audit, loan operations, marketing, mortgages, member business lending and sales and service. Taking the aforementioned into account, the number of transactions at our teller lines has decreased. We believe the overall reason is technology. Members have their payroll and other checks directly deposited and use other electronic channels like our NetTeller™, Mobile app and ATM's. That said, anytime you can save one place and be more efficient it frees up funds which can be put back into additional products and services at no cost to the membership. An example of that would be our mobile application. This service is provided at no cost as are many of our services.
The consolidation which will take place as soon as the construction is complete will have minimal impact on the service we deliver. We believe it will be fairly seamless other than members having to go to 30 Stearns Street. Our members will have access to some services they don't currently have at 79 Main Street, such as obtaining an instant issue debit card, SeaCoin or obtaining a mortgage. The benefits of this option will also enable all back office operations to be in one main locations assisting us with an increase in communication and decreased travel time between buildings which will allow us to grow internal staff more efficiently along with membership growth. And, more importantly no staff will lose their job. We are committed to ensuring that the current staff at the 79 Main Street Branch is fully integrated into operations at 30 Stearns Street, so members will enjoy the same services they have grown accustomed to over the years. Moreover, we are adding new positions to meet the ever-changing needs of the business based upon our growth.
Also part of our strategic plan, we continually evaluate our current retail branch operation system. The Malone Branch, which is located in the Price Chopper Plaza is a building leased by the Credit Union. This arrangement has worked for a long period of time; however, owning our own location adds long-term value to the organization. Therefore, the Board of Directors approved the purchase of a piece of property located on Route 11 near the Holiday Inn Express for the future construction of a new branch. We will begin to plan for the construction of this new branch in early 2015 with expected completion June 2016. This new venue will give us additional visibility in a high traffic location in an ever-expanding retail area. SeaComm is financially positioned with excellent earnings and a high level of capital, which too makes sense for us to do all of this today. To monitor the progress of our expansion, visit our website www.seacomm.org.
Our financial position today continues to remain solid. Year-end assets were in excess of $460 million. At the same time, our net operating expenses YTD were at 1.76%, well below our goal of 2.75%. We finished the year with a net income of $5.3 million, garnering us more than $51 million in total equity to-date. Capital remains a key component to our financial health as it is necessary to maintain adequate reserves for loan losses as our assets continue to grow. It ensures that we are able to withstand any uncertainty like we encountered during the past few years as well as to be viable well into the future.
Best Company to Work For in New York
As I have said in many different forms, we have talented, smart, hard-working staff, which take great pride in their work of serving our members. We do have high expectations and are committed to maintaining that standard moreover, we are incredibly fortunate to have dedicated employees who live our mission of "people helping people". In mid-January, we received notification that we had been chosen for a fourth year in a row as one of the Best Companies to Work for in New York for 2014. We were in the top 10 in 2013. Our selection as one of those small to mid-sized companies was based upon a survey in which our employees were asked to participate, along with requested criteria we had to provide. A few of the focus areas included: leadership and planning, corporate culture and communication, role satisfaction, work environment and relationship with supervisor. We are extremely proud to be included within this privileged group.
Daily there are ongoing threats to acquire data, steal identities and crash financial systems. Be assured we take the necessary proactive precautions available to us to ensure the integrity of our operation system. At the same time, we work with our members who have experienced compromises through retailers such as Target and Neiman Marcus.
In order to ensure favorable legislation for Credit Unions, it is necessary to travel to Washington, D.C., to speak with our elected officials. As a Federal Credit Union, we are exempt from paying federal and state income taxes. However, we still must pay school and property tax, which supports the local schools and municipalities in the markets in which we do business. This exemption also enables us to ensure those in our field of membership (St. Lawrence & northern Franklin Counties) have access to affordable credit. In addition, we are able to support countless not-for-profit organizations, like hospitals, schools, etc. with significant financial support. What else makes us different? We are governed by a volunteer Board of Directors and the profits we earn on an annual basis are returned in the form of better than average deposit and loan rates, or relatively low or no fees for services, such as instant issue debit cards, mobile platform, bill pay and mobile deposit capture.
Today, we are continuing to be affected by legislation as a result of the 2008 economic downturn caused by the catastrophic failures of Wall Street banks like Lehman Brothers and Bear Stearns. Those failures were the direct result of sub-prime mortgage products, which adversely affected the housing market and in turn the national economy. This financial crisis was the worst since the great depression. Those changes have also been driven by legislations such as Dodd-Frank and the newly formed Consumer Financial Protection Bureau. Although, we didn't have any sub-prime exposure, we of course were not completely immune to broad economic pressures as a result of the downturn. Therefore, we had to be proactive in managing the balance between loan demand and share deposits and must continue to implement required changes to current processes such as mortgages to maintain compliance. More regulatory burden comes at a cost. So it has been even more important to ensure legislation is favorable to our mission of serving our membership.
||Pictured: SeaComm VP of Retail Operations Sherry White, Board of Director Patricia Dodge, Senator Chuck Schumer and SeaComm President and CEO Scott A. Wilson in Washington, D.C.
Since becoming CEO in 2007, I have committed myself to being accessible to our members. They can call, e-mail or stop by my office at 30 Stearns Street in Massena. And, each quarter I make myself available in the branches to make it easier to speak with me. I am also on Twitter. You can hear directly from me by following me at twitter.com/@SeaCommCEO. This is a great way to hear from me in real time.
We look forward to continuing to differentiate ourselves in the way our members are served; through the product and delivery channels offered and by continuing to be a good "neighbor" in the communities in which we do business. It's a focused strategy; one which we take serious by continuing to ensure we fulfill our mission of "people helping people".
Scott A. Wilson
President & Chief Executive Officer