2018 Annual MeetingApril 16, 2019

5:30 pm

Dan Brady, Chairperson

Call the Meeting to Order

David Seman, Secretary

Roll Call of the Board Minutes of Last Year’s Meeting

Dan Brady, Chairperson

Report of the Board of Directors

Volunteer Changes

New Board Members• Dave Seman

• Charlie Hamlyn

Board Resignations• Steve Merten

• Eric Dreier

Nominating Committee• Ming Mays Appointed

Our Mission

To serve the community and build trusted relationships.

Highlights

5-Star Bauer Financial Rating

Since 1999

Upgraded to Teller Cash Recycler’s at our South

Airport Branch

Removed the ATM located at our previous Bay Street Branch

Best Bank/Credit Union of GT Region

in Record Eagle

Received $108,812 back from the National Credit

Union Share Insurance Fund

Accomplishments

MEMBERS SAVED

by Refinancing Loans and Opening fee free Checking Accounts

4.72 MEMBER SERVICE AVERAGE SCORE

Board Experiences from a Members Perspective

4.94 MEMBER ADVOCACY AVERAGE SCORE

$708,351.64

New Products and Services

New TBACU Mobile App

Michigan Trusted Title Agency CUSO

Expanded Service Center Hours

Pay It Forward

$2,800 given back to the

community through our Pay it Forward Birthday

Celebration.

I donated puppy toys and supplies to the H.A.N.D.S. to

the Rescue. –Kyle G.

I paid it forward at Family Fare –there was a line behind me of a few people who only had a few things. I asked the cashier to put the money towards everyone’s groceries. I wasn’t able to see anyone’s reactions but I hope it made their night. . –Jasmine B.

I gave my $50 to TCAPS and asked that it be applied to meal accounts of students at TC Central. These funds will be used to catch up negative balance accounts as well as pre-paying random reduced lunch and full pay student accounts. –Chris G.

Policy Updates and Revisions

• Bank Secrecy Act & OFAC Policy• Capital Adequacy Policy• Collection & Delinquency Control

Policy• Employee Handbook• Investment Policy• Liquidity Management Policy

Security

• Co-founded GT Chapter of ISSA• Chair the TASOA• Privacy & Information Security

Seminars• MRB Risks & Opportunities

Abby Smith, Human Resource Director

HR Accomplishments

Human Resources

$-

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

0

10

20

30

40

50

60

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

TBACU Team Member Growth

Total Employee Count Asset Size

Team Member Growth 3.7%

Human Resources

New Positions in 2018• Collections Representative• Service Center • Accounting Supervisor

Happy Retirement for Peg Klein32 years of exceptional service to members!

Human Resources

New Retirement Program Features• Automatic Enrollment• Automatic Annual Increase

Licensing for Credit Insurance Products• 3 additional team members licensed

Gallup Employee Engagement Survey• 62% engaged, 34% national average• 4.26 out of 5.0 Engagement Score

Community Involvement

1400

1165.25 417.75

0 200 400 600 800 1000 1200 1400 1600 1800

2018 Goal

2018 YTD

Team Members Leadership

1583 Hours

Community Involvement

• Angel Care Preschool & Daycare• Benzie Central Schools Educational Foundation• Big Brothers Big Sisters• Cherry Festival• Children’s Advocacy Center• Children’s House• Crooked Tree Arts Center• Darcy Library of Beulah• Disability Network• Downtown Traverse City Assoc.• Employer Training Council• Interlochen Center for the Arts• Junior Achievement• Kiwanis

• Many area churches• March of Dimes• Michael’s Place• NMC • Optimist Club• Rotary• Safe Harbor• Salvation Army• TCAPS• Travers City Chamber & Young

Professionals• Traverse City Film Festival• United Way• Warrior Sailing

Jasen Hutchens, IT Director

IT & Security Accomplishments

Information Technology

• 2,034 electronic envelopes securely sent for signature• Security 70 Ransomware attempts 357,703 emails were blocked 59 malware/viruses stopped 11,998 spam emails filtered 52.88% of inbound emails blocked (713,188 total inbound emails)

• Some of the 2018 IT Accomplishments Addition of a Network/System Administrator to the IT team Migration to o365

o Internal instant messaging with Microsoft Teams application Successful 3rd party security audit

Christie Dompierre, Marketing Director

Marketing Accomplishments

Educational Events

PROVIDED FINANCIAL LITERACY PROGRAMING FOR

COMMUNITY MEMBERS

• Financial Workshops• Reality Fairs• Community Events• Student-Run Credit Union Programs• Classroom Presentations1,502

Student-Run Credit Union Program

• Gained two new programs in Fall of 2018- Woodland School and Old Mission Peninsula School.

• Proud to be offering financial literacy programming to students in public, private, charter, and home school programs.

• Long term goals:80% retention rate of SRCU accounts.23 School Programs by 2021.

Total Amount Saved by Students via SRCU Since 2010

$114,665.88

Grants and Scholarships

$9,519.64 IN SCHOLOARSHIP PROGRAMS

GTBA MEA Retired ScholarshipMARSP- GT Chapter Scholarship

MARSP- Leelanau Chapter ScholarshipTBACU Study Abroad Scholarship

TBACU Scholarship Fund for NMC Students

$5,993.78 IN CLASSROOM

GRANTS

Participation in Community Events• Downtown Traverse City Association – Friday Night Live• Downtown Traverse City Association – Window Display

Contest• HBA Home Expo• MARVAC RV & Camper Expo• NMC BBQ• NMC Benefits Fair• NMC Welcome Back Week• Norte’s Winter Walk Wednesday• Optimist Club Duck Race • T.A.R.T. Trails Smart Commute Week• TC Chamber Business Economic Outlook Breakfast & Expo• TCAPS Welcome Back Breakfast

Sponsorships and Donations

• Junior Achievement Youth Summit

• Kiwanis• Leelanau Chamber of

Commerce• March of Dimes Signature

Chef Auction• MCUL• Michael’s Place• National Cherry Festival• NMC • Michael’s Place• National Cherry Festival• NMC • Optimist Club

• Outstanding Educator Awards• Outstanding Persons In Education • Peace Ranch• Rotary Club of Traverse Bay Sunrise

Foundation• SCORE Workshop Series• TBACAC• TBAISD Career Tech Golf Outing• TC Central High School Hall of Fame• TC Chamber of Commerce • TC Children’s Book Festival• TC Chocolate Festival• TCAPS• The Giving JAR Charity Golf Outing

• Benzie County Central Schools• Cherry Capital Comic Con• City Opera House• Crooked Tree Arts Center• Crosshatch Small Farm

Conference• Downtown Traverse City

Association Friday Night Live• El Grupo Norte Smart Route to

School Event Series• Forest Area Sports Booster• Golfing for Vets• Great Lakes Children Museum• GTACS• Jim Ooley Golf Outing

Karen Browne, Chief Executive Officer

Treasurer’s Report & Statistical Information

2018 Asset & Share Growth

Asset Growth = $13,253,589 or 6.45% National Peer Average = 4.03%

Share/Deposit Growth = $10,304,822 or 5.99% National Peer Average = 3.63%

$0

$50,000

$100,000

$150,000

$200,000

$250,000De

c-16

Jan-

17

Feb-

17

Mar

-17

Apr-

17

May

-17

Jun-

17

Jul-1

7

Aug-

17

Sep-

17

Oct

-17

Nov

-17

Dec-

17

Jan-

18

Feb-

18

Mar

-18

Apr-

18

May

-18

Jun-

18

Jul-1

8

Aug-

18

Sep-

18

Oct

-18

Nov

-18

Dec-

18

Assets Shares

10 Year Growth History

$-

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Assets Deposits Loans

• Capital Increased 5.98% or $1,670,223• Total Capital December 2017 = $29,616,104

Capital and Return on Average Assets (ROAA)

Capital 15.05% | Net Worth 14.10% YTD ROAA 1.01%

9.50%10.50%11.50%12.50%13.50%14.50%15.50%

Capital Ratio Net Worth Ratio

0.000.200.400.600.801.001.201.401.60

.72% - National Peer Average.74% - Local CU Average

11.46% - National Peer Average Capital11.89% - Local CU Average Capital

Financial ComparisonAssets 2018 2017 Interest Income 2018 2017Loans 163,461,539 153,373,511 Loans 7,235,273 6,725,551Allowance for loan loss -1,184,393 -873,467 Investments 833,938 451,472Other Receivables 337,515 533,556 Total Interest Income 8,069,211 7,177,023Cash 12,461,232 15,273,968Investments 28,731,775 22,261,209 Interest ExpenseAlloya Capital Share Deposit 519,200 519,200 Members Savings 146,978 112,752Prepaid Expenses 1,012,660 916,087 Dividends 523,698 354,601Fixed Assets 10,287,799 8,245,646 Total Interest Expense 670,676 467,353Accrued Income 545,505 443,740NCUSIF 1,731,752 1,575,140 Provision for Loan Loss 881,470 1,008,808Other Assets 690,032 3,072,437Total Assets 218,594,615 205,341,026 Net Interest Income after

provision for loan loss 6,517,065 5,700,861

Liabilities and Equity Total Non-Interest Income 2,343,487 2,041,929Accounts Payable 4,348,596 3,719,387Accrued Liabilities 68,432 31,000 Non-Interest ExpenseOther Liabilities 263,614 79,661 Operating Expense 6,709,722 6,089,937Member Shares and Savings 182,199,696 171,894,874 Non-Operating Gain(Loss) 0 -1,060Capital 31,714,276 29,616,104Total Liabilities and Equity 218,594,615 205,341,026 Net Earnings 2,150,829 1,653,913

Membership Growth

17,921

2,974 New Members in 2018, 5% Growth2.55% - National Peer Average

15,500

16,000

16,500

17,000

17,500

18,000

18,500Top 5 Reasons

1. Indirect Financing2. Member Referral3. Existing Member4. Online Membership5. Student-Run Credit Union

Members Using Electronic Services2018 Growth %

17,921

11,274

7,311

4,635 4,450

2,491 1,878 1,169

Members E-Stmt Debit Cards Homebanking Mobile Bank Bill Pay RDC Users e-Alert

5.2%

4.9%

6.1%

-4.0% 25.8%

21.1% .2%

4.5%

Transaction Delivery ChannelsGrowth % Dec 2017/Dec 2018

123,319

58,905

40,134

30,97823,576 23,475

18,105

3,014Debit Card ACH ATM Online/Audio Checks Credit Card Teller RDC

19.5%

12.4% -6.9% 8.4%

-7.3%

35.9%

6.7%

8.4%

Service Center StatisticsGrowth % Dec 2017/Dec 2018

163

46

28 24

E-documents Texts Online Accts Loans Apps

-47.8% 64.7%

17.9%

579.2%

12.1%3,546

Telephone Calls

Chris Milliron, Chief Lending Officer

Lending Report

TBACU Loan Mix 2018

NCUA – 2018 Loan Distribution

Total Loans - $163,461,538

Auto Loans76,278,390

50%

Other Personal16,621,749 11%

Real Estate43,998,059

29%

Credit Cards3,709,070

3%

Commercial11,233,185

7%

TBACU Loan Portfolio Distribution

Loan Growth

2018 Loan Growth Overall 6.58% $163,461,539

$140,000

$145,000

$150,000

$155,000

$160,000

$165,000

$170,000

Dec-

16

Jan-

17

Feb-

17

Mar

-17

Apr-

17

May

-17

Jun-

17

Jul-1

7

Aug-

17

Sep-

17

Oct

-17

Nov

-17

Dec-

17

Jan-

18

Feb-

18

Mar

-18

Apr-

18

May

-18

Jun-

18

Jul-1

8

Aug-

18

Sep-

18

Oct

-18

Nov

-18

Dec-

18

Real Estate Growth

2018 Year End Mortgage Production

TBA Portfolio - $43,008,660

NMS Mortgages – $53,880,111Growth of 30%

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

2011 2012 2013 2014 2015 2016 2017 2018

Portfolio Mortgages NMS Mortgages

Delinquency & Charge-Offs

2018 Year End Delinquency .64% - TBA.81% - Peer Average

2018 Total Charge- Offs .44% - TBA.52% - Peer Average

0.46%

0.41%

0.89%

1.02%

0.64%

0.43%

0.21% 0.26%

0.45%0.44%

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

2014 2015 2016 2017 2018

Delinquency

Charge Offs

Dan Brady, Chairperson

Unfinished BusinessNew Business

Jon Plummer, Nominations Committee

Election Report

Board of DirectorCandidate Nominations

Kathy Douglass Charlie Hamlyn

Katie O’Connor, Invested In Scholarship Program

Invested In Scholarship

The Invested In Scholarship was launched in 2019 with the purpose of helping TBACU members who are committed to volunteerism and plan to attend college to further their education.

Today, we will be awarding two $1,000 scholarships!

Invested In Scholarship

Elizabeth JewellTC West Senior High School

Anne NietlingForest Area Community Schools

Giveaway time!

Dan Brady, Chairperson

Adjournment