Report of the President & Chief Executive Officer
As we move well into the third quarter, we reflect on the fact that 2020 started out respectable with all indications that it would be a good year. Then we faced an unthinkable pandemic. Our economy has been slowed down considerably.
As a member of SeaComm it is important to know that our members can count on us to be there when they need us the most. Were we ready? The answer is yes. Overseen through our strategic planning process by our Board of Directors, it is important for everyone to know that SeaComm has been preparing for this event since 2008 when the global economic crisis hit the financial services industry and put our country into a great recession. SeaComm has grown over the past decade, including our capital reserves at just over $90 million or 14.29%. The National Credit Union Administration (NCUA), our Federal regulator, necessitates at least 7% of a credit union’s assets are to be reserved in order to be considered well-capitalized. We are more than twice that requirement. We stress test our liquidity and capital each quarter to ensure if some sort of economic anomaly like the one that is occurring today, positions us to weather it. Liquidity at the Credit Union is very strong. We have monthly cash flows, which enable us to operate, loan or invest. In addition, we have access to a line of credit at the Federal Home Loan Bank of NY or the Federal Discount Window at the Federal Reserve Bank, which we can utilize. That has not been necessary at this time. This is due to the financial strength of the Credit Union.
Throughout the last several months we were well equipped to meet the financial needs of our membership. We have been working daily with anyone who has been affected by layoffs, furloughs or impacted in anyway by this economic turmoil. We are always open to assisting members with a number of options, including, but not limited to, offering lines of credit, extensions or skip payments, bridge loans or even waiving a penalty for early withdrawal on a certificate of deposit. This includes our business members.
Through the US Treasury Stimulus, our small business members had been able to apply for Payroll Protection Program loans guaranteed by SBA. We have ensured that our member businesses had access to this program. Those were necessary for our small businesses and their respective employees. This kept so many working and helped to bridge them by underwriting nearly $6 million worth of loans through PPP. This was key component of the economic stimulus plan that the Treasury put into place to get us through this unprecedented time.
Although there has been some change to our normal operating environment, all of our staff were working during the shutdown and functioned smoothly. This is the testament to our employees, who have been coming to work each day to ensure we continue to do what we do best, take care of our members and their families. With that said, SeaComm continues to work toward meeting our forecast set forth in the FY20 operating budget. Member satisfaction, staff engagement and overall profitability continues to remain high. We will begin construction on the second of three planned branches in Vermont.
Our Financial Position Today Continues to Remain Solid: Year-to-date net income as of July 31, 2020 is $ $3,569,701. Our net assets at the end of the same period were $646,237,077. At the same time, net operating expenses YTD were 1.90%, well below the 3% targeted goal set by the credit union’s budget. Today, we have $90 million in total equity to date. As I had mentioned previously capital, remains a key component to our financial health, as it is necessary to grow adequate reserves in times like today where we can withstand uncertainty as our assets continue to increase and thereby be viable well into the future.
Weiss, an independent rating agency, has once again provided SeaComm the A- rating in terms of excellent financial strength. BauerFinancial has once again provided SeaComm with their Superior Five-Stars. This independent rating agency analyzes the performance of U.S. Banks and Credit Unions. The star ratings classify each credit union based upon a complex formula which factors in relevant data including, but not limited to: capital, historical trends, loan delinquencies, differences in the book and market values of the investment portfolio, profitability, repossessed assets, reserves, charge-offs, regulatory compliance and asset quality. It has deemed SeaComm as safe, financially sound, and that we are operating well above regulatory capital requirements. DepositAccounts has also given us an A rating for Q1 FY20; one of the highest health grades given out.
56th Annual Meeting: This is the first time in the history of SeaComm that we held our annual meeting virtually. This did afford us the opportunity to provide full access to our members who wanted to attend even in other markets like Plattsburgh and South Burlington. In my report at this year’s annual meeting in May, we were pleased to announce 2019 was another exceptional year for SeaComm. It was emphasized that our financial strength has enabled SeaComm to continue to provide the essential services to our members even as the economy was on hold. Highlights for the previous year included: continued market share penetration at 33% with 1.78% in Clinton County, membership growth at 4%, net income of $6.2 million, as well as a solid sixth year for our SeaComm Personal Advisor Services with $34 million of assets under management. The overall message was that SeaComm is committed to ensuring our members get the very best in member service, core products and a diverse delivery channel model. Two Directors were re-elected to 3-year terms, Myron Burns and Mitch Marolf. A podcast recapping the meeting is available on our website.
Market Expansion: The Board of Directors has approved plans to move forward with the construction of our second branch in Essex, Vermont. This additional location will offer the Credit Union opportunity to continue to grow and diversify our markets in the state. It is expected that the groundbreaking will be held early September with a completion in early spring 2021.
As we have stated in the past, even though we are adding another branch, we are committed to exceeding member expectation as we always have. It is important to know that we make certain that everything we plan and ultimately implement has member and employee satisfaction as our end goal. Our focus has and continues to be to offer our members a compelling value. From the time they walk into one of our branches, phone into our Call Center, or log in at one of our mobile delivery platforms, we want the experience to exceed their expectations. We do not take that lightly. In fact, we obsess over it. We believe so much in member satisfaction, that on a monthly basis, random surveys are sent out to members who have conducted some sort of transaction at the Credit Union. This can be as simple as a balance inquiry to applying for a loan. Whatever the circumstance, we want feedback on how the member was treated and if we did everything necessary to make them feel valued. The survey results are reviewed by everyone on the management team that is responsible for a retail area, as well as by my senior leadership team and myself.
Earlier this year, we were notified that SeaComm had been chosen for a tenth consecutive year as one of the Best Companies to Work for in New York. Our selection as #13 out of 21 of the top 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 role satisfaction, leadership & planning, work environment, corporate culture and communication as well as relationship with supervisor. In response to the question, Overall, I am very satisfied with my employer, we received 96% agreement. We are extremely proud to be included within this privileged group.
Governmental Affairs: SeaComm’s involvement in the credit union movement goes beyond our geographic market of the North Country. Each year, members of our Board of Directors, senior staff and myself travel to Washington, D.C., to talk with key legislators about issues which are extremely important to the credit union industry. Our visit to Washington in late February, also included a visit to the Hill with our representatives in Vermont as well as the 21st New York Congressional District Representative Elise Stefanik. The Congresswoman has been supportive of legislation which would benefit credit unions,including, H.R. 225 Stopping Merchant Data Breaches (which would require merchants to face the same strict data security that financial institutions are subject to under the Gramm Leach Bliley Act), as well as H.R. 1941/S.774 and the “Financial Institution Examination Fairness and Reform Act”. In addition, she supports the continuedprotection of the credit union tax exemption status. She has also applauded credit unions for the efforts we play in the creation of jobs through small business lending.
We are also actively involved in our national trade organization National Association of Federally-Insured Credit Unions, where I have been privileged to be a member of the NAFCU Board’s nominating committee for the past five years.
Going forward our focus continues to be on enhancing our product and service offerings to meet the ever-changing business landscape and provide each member with a strong value proposition in being a member of our Credit Union. This is done through a consistent and responsible growth strategy.
On behalf of the Board of Directors, management and staff, we are grateful to our more than 49,100 members who have put their trust in us and we will continue to work diligently to remain strong in order to be able to serve well into the future.
Scott A. Wilson
President and Chief Executive Officer
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