michigan state university federal credit union 2007 annual report

Michigan State University Federal Credit Union2007 Annual Report

•

every step of the way

MSU Federal Credit Union • Life Made Possible . . . 1

Members count on us for a lifetime of service. From the newborn to the senior citizen, MSU Federal Credit Union offers services members can count on—services that assist each of our members in meeting financial goals.

Many members open their first financial accounts at the credit union. It may be a savings account for the youngest member or a checking account for a student member. A service menu of checking, savings, VISA and loan accounts ensure that there are available services to suit each member’s needs, budgets and financial plans.

Members count on us to make life for their families possible…every step of the way.

Our management team works together to identify our strengths and weaknesses with the goals of continuing the growth of the credit union, increasing member satisfaction, identifying and implementing new service offerings and securing the privacy of our members. New challenges face the credit union every day in the competitive marketplace. The efforts of all our employees have made MSUFCU one of the most respected institutions in the nation and the most popular in the area winning both the Town Courier Best of Business and the Adams Best of Companies Awards. In addition, MSUFCU was named one of the top 25 middle-sized companies to work for by the Society of Human Resource Management. We were awarded the Lansing Regional Chamber of Commerce Economic Development Award for significantly contributing to the growth and well being of the area.

2


Lea Ammerman, Vice President of Contact Center Operations

Our contact center specialists require training across a broad range of services. Members may call with questions regarding the downloading of checking account and VISA transactions to their money management software or with questions regarding their IRA distributions. In the evening, members rely on the contact center for these answers to their specific concerns. Ongoing product knowledge and service training is continuous within the department. To increase each specialist’s level of knowledge, time is spent cross training in various areas of the credit union to increase expertise and their ability to answer our members’ questions. More specialized training includes an overview of IRAs for all contact specialists so basic requests can be addressed. Two staff members have earned the ranking of IRA specialist for more specific concerns. Several contact center specialists also attended a lending conference to learn more about loan processes and qualification of members for loans. Members may call for a particular loan service and the trained specialist can offer alternatives that may be more beneficial. For instance, a home

equity loan offers a lower rate than a home improvement loan and may be a better choice for a member. While members call about account balances and to verify a check clearing, many call to apply for loans. The contact center approved 21,267 new loans for a total of $56,169,671. There are two senior loan specialists on staff to assist those members with special needs. Expenses are always a consideration. To reduce expense while maintaining a high level of member service is an ever-present challenge. Our reduction of overtime has resulted in cost savings and fresh employees to handle members’ requests. Contact center employees work one Saturday per month taking a weekday off to reduce overtime expense. Speed is another consideration. Handling members’ many and varied requests, takes time but certain efficiencies reduce the amount of time per call. Many of these considerations are developed by our IT department. Screens with credit reports and other member history are readily available for specialists to make their decisions. Product information is also available and easily found for employees to provide accurate information—all important during times of peak volume. Our account cross servicing program prompts the contact center specialist to introduce services based on the member’s history, that are beneficial to the member. Often, these are services that the member may not be aware of or how useful they can be. Because the contact center can accommodate a variety of member requests so efficiently, members are utilizing the contact center more than ever and 33.5 full time agents handle an average of 1,146 calls per month. The number of services that the contact center provides has increased along with the number of calls. Members can join via the contact center and they can open certificates and IRAs. These services previously were available in the office or by a phone call to member services during our normal business hours. Open from 7 a.m. until 9 p.m. during the week and offering Saturday hours from 9 a.m. until 3 p.m., many would say these aren’t banker’s hours; we say they are MSUFCU’s hours. However, more than that, members can be assured that a trained MSUFCU employee is answering their questions, transferring funds and approving loans. MSUFCU’s contact center is not outsourced to an organization that may not be as diligent about security of information, particular in hiring individuals or as dedicated to training those individuals.

Patrick McPharlin, President/CEOLea Ammerman, Vice President of Contact Center OperationsJoyce M. Banish, Vice President of Marketing

leadership

4

Joyce M. Banish Vice President of Marketing

More members…more members using more services…and retaining members are the specific challenges of the marketing department. Membership growth is largely dependent on the influx of new students. Marketing efforts targeting this group is extensive with direct mail, special events and broadcast media. As a result, 4,343 new students joined between May and August of 2007. Many students keep their accounts through their years at MSU. Promoting to the graduates to maintain those accounts when leaving campus requires their education on accessing accounts remotely. In spring, marketing’s efforts remind graduates about how they can handle their accounts easily even while living out of state—how MSUFCU service can be more convenient than the bank on the corner. An important promotion in accomplishing this was the Real World Makeover Contest, where two graduating seniors, male and female, can win a professional makeover from head to toe. We are here for our members with a lifetime of service. Another source of membership is our family members. Immediate family members can join the MSUFCU. Promotions reminding members that they can share the privileges of MSUFCU membership with their nearest and dearest are held on a regular basis. These referral contests resulted in 3,006 new members. The summer loan promotion, in spite of the overall lack of consumer confidence and reduction in spending, reached our members. If there was the need to borrow, members selected MSUFCU as the institution to make the loan. MSU and OU Alumni are eligible for membership. Many potential members recognize their eligibility from media in the local community. Having an ATM in many campus buildings and in every Quality Dairy improves our opportunities to attract new members. MSUFCU was awarded the bid to market the OU Affinity VISA card to OU alumni. Promotion began in late fall and will continue through the year. The card offers the potential to expand our services to over 70,000 new members.

Marketing is devoted to financial education and made 14 visits to campus and high schools specifically for presentations on maintaining a good credit score and the steps to take to protect yourself against identity theft reaching 589 students. We held 42 seminars with 968 members in attendance. Seminar topics include: Buying and Selling on eBay, Women and Investing, Wills and Trusts, Family Love Letter and Home Improvement Day, a day of seminars for homeowners. MSUFCU representatives greeted current and prospective members at several events on campus and in the larger community. Specific shows targeting students, business people, homeowners, boaters and women introduced the many benefits of membership.

Ronda G. Bennett, CPA Assistant Vice President of Internal Audit

The primary functions of the audit department are to protect the assets of the credit union, ensure compliance of federal rules, MSUFCU’s internal policies and procedures, and the protection of member information. Because this is a highly regulated industry, our goal is to work with staff that is non-confrontational in nature. Our desire is to have each employee recognize the responsibilities of compliance and freely identify any areas in need of improvement. We encourage all our employees to use us as a resource regarding issues of best practices and regulatory compliance. Employee training is an important part of compliance issues. One regulation requiring close monitoring is the Bank Secrecy Act. This act, a result of the USA PATRIOT Act, was created to identify possible terrorist activity. To assist us with meeting the requirements of this act, the training of all staff is required. To ensure our success, we have two Certified Bank Secrecy Act Officers as part of the audit staff to oversee all areas related to maintaining our compliance with the regulation. We also have an information technology specialist on our supervisory committee to monitor and recommend measures that will enhance our information systems and prevent any weakness.


Our department uses a risk-based audit approach and throughout 2007, we have concentrated on developing efficiencies and processes to maintain regulations. Staff members have an outside resource to call should they feel that the credit union is in jeopardy because of management practices. During the year, credit union activity is audited by the internal audit department, outside auditors, intrusion specialists and the National Credit Union Association regulators. Working together, we ensure that our members’ financial information and investments are safe.

Jeffrey S. Benson, CPA Vice President of Operations

For the third consecutive year, MSUFCU has been the leader of credit unions in automotive lending across the state. Direct new vehicle lending was $42,308,501 and used auto lending was $91,195,282 for 2007. While most of our lending has been in used cars, our dealer partnerships throughout mid-Michigan have allowed us to maintain lending for new vehicles. Our partnership with RV lenders throughout the state has resulted in an increase in recreational vehicle lending. Indirect financing for new, used and RVs via our partner dealers resulted in $60,390,235. In spite of the widespread foreclosure due to sub-prime lending and loss of employment, MSUFCU has maintained its mortgage base through conservative lending policies. Home loans resulted in $492,566,205 in fixed-rate mortgages and $22,225,168 in variable-rate mortgages. While the economy has not seriously threatened most of our members, some have been affected by loss of income or loss of employment. MSUFCU works with those members to handle outstanding obligations, and, in the case of a mortgage, remain in their homes. A Platinum VISA card was added as a feature to the Prime Advantage Home Equity line-of-credit loan. This gives members convenient access to funds whether they are paying for remodeling supplies at the local building center, tuition for children or travel. While this option is not for all members, some members find that it is an effective way to handle large purchases that may necessitate carrying a balance. The rate is lower than signature line-of-credit loans and, in most cases, the interest paid

is tax deductible. Home equity loans, both fixed- and variable-rate loans, totaled $149,617,010. Our business lending continues to grow. MSUFCU now offers both signature and collateralized lines-of-credit and commercial real estate loans. The economy may have faltered, but MSUFCU has been able to increase its lending and offer financing solutions to our members. Through sound lending policies, a variety of loans and terms to meet our individual member’s borrowing needs, MSUFCU has remained a leader in the state and the industry in providing loans to its membership.

Jeffrey S. Benson, CPA, Vice President of OperationsApril Clobes, Vice President of E-commerceRonda G. Bennett, CPA, Assistant Vice President of Internal Audit

6

Silvia Dimma, Vice President of Human ResourcesTiffany L. Ford, CPA, Vice President of FinanceJeffrey G. Jackson, CPA, Vice President of Member Services

April Clobes Vice President of E-commerce

Bringing our e-statements in-house not only reduced statement expense by $150,000 annually, it offers our members better service. Should there be a problem, the answer can be determined quickly without relying on another source for efficient problem resolution. In 2007, 954,847 e-statements and notices were sent to members. These included statement mailings, VISA statements, VISA activation notices, certificate renewal notices and renewed certificate notices. Targeting our college students is a unique challenge as traditional marketing sources are often ignored by this demographic. A primary goal of MSUFCU is to educate our members about our services and handling their finances in general. As the student is often engaged in many activities, the traditional venue for a seminar, does not always suit the typical student’s schedule. By creating interesting podcasts on financial topics that can be downloaded at anytime, information is made available at a time and in a way they wish to receive it. By promoting the podcasts with prize incentives, more students were educated than would, should they be left without this motivation. The 14 topics released for download included: phishing, understanding your credit report, IRA basics and overdraft protection. MSUFCU’s website is never tired. It is updated continually with no room for outdated information. Members Home and Auto Insurance and Rehmann Financial are two new services added to the site. To facilitate the application for the OU Alumni Association Affinity Card, e-commerce designed www.oucard.com. Prospective cardholders can apply online in a secure environment. The City of East Lansing looked for a partner to help promote the city as a place to live. Many homebuyers with young families thought that East Lansing property was too expensive—particularly its property taxes. The site, www.homeineastlansing.com, designed by MSUFCU’s e-commerce department, shows that the lifestyle and benefits afforded by living in the city outweigh the perception of high ownership costs.

E-commerce is responsible for providing online assistance to members and increased its response level by 47% by answering 29,392 emails and chats. The website is used continually as a resource and many say it is the best website nationwide—easy to use, a wealth of information and superlative navigation. Over 7 million unique visits to the homepage were made in 2007.

Silvia DimmaVice President of Human Resources

For a second year in a row the MSU Federal Credit Union was named one of the 25 Best Small & Medium Size Companies to Work for in America by the Society for Human Resource Management. The process for winning this award is lengthy as it involves submitting annual reports, employee handbooks, and completing a questionnaire related to compensation and benefits. Overall, two-thirds of the selection criteria is based on the employees’ responses to an anonymous satisfaction survey. Employees are asked a number of questions regarding


their feelings about the institution as a whole, the executive management team and those they report directly to. They are asked about their opportunities for advancement, their company benefits and the willingness of others to help them should they need assistance with their work. The other third of the selection criteria comes from five areas: credibility, respect, fairness, pride and camaraderie. There have been many openings at the credit union due to branch expansion and natural attrition. Over 1,300 applications are received annually. In 2007, the HR Department hired 56 new employees and conducted approximately 420 interviews. HR evaluates candidates on their willingness to learn, their desire to progress within the institution and their commitment. These traits are indication of how they will fit in with our culture, other employees and management. Most come to us with bachelors and masters degrees. MSUFCU has a strong commitment to education and offers education reimbursement for those desiring to complete their degree or doing graduate work. When a candidate is hired, there is approximately a month of training before the new hire works with the member. Entry-level employees are entered into the credit union associates program which provides thorough training in the areas of teller, member services and the contact center. The associates rotate within the branches and eventually fill the internal openings; allowing managers to choose from well trained candidates. Regulations require that employees be trained in the Bank Secrecy Act, Member Privacy and Fair Lending Practices. Every staff member attends mandatory annual training regarding safety and security and those areas required to meet regulatory standards. Any new service or change to services requires additional training. In 2007, the training department conducted over 1,800 hours of training. The credit union selected ten employees to participate in the management development program. The 20-month program combines both classroom and hands-on experience and gives selected employees the opportunity to develop skills needed to fill future management openings. Our management development program ensures everyone about MSUFCU’s strong desire to promote from within.

Tiffany L. Ford, CPAVice President of Finance

Increased efficiency was the goal of the finance department and accomplished through informative but streamlined board reports for clarity, general ledgers for faster processing of payments and other accounting functions. This efficiency allows us to monitor other areas more closely, particularly important in a declining economy. The management of dividends, loan interest and investments requires close monitoring. Our investment strategy has been one of low risk with investments made only to government agencies and corporate credit union certificates with high ratings. With approximately 17.5 percent of our funds in investments, our conservative investment practices have enabled MSUFCU to maintain a steady uphill course. Mortgage lending was of particular concern because of the number of jobs lost in the state. Conservative lending standards and the traditional mortgage offerings by the credit union allowed us to maintain the strong mortgage base of 33.87% of assets that are devoted to members’ first-mortgage needs. Wire handling processes continue to ensure the safe delivery of funds and in 2007, MSUFCU sent 7,287 wires and received 18,922 wires. Cross training of our staff has resulted in a more knowledgeable staff that is able to fill in for each other when vacations, illness and training days arise. This also allows for increased efficiencies and timeliness of completing necessary reports. One staff member received her ACH accreditation further ensuring highest and best practices with transactions completed through the automated clearinghouse.

Jeffrey G. Jackson, CPA Vice President of Member Services

Member services as a department is committed to improving the level of service to our members by evaluating current account offerings, researching and developing new services and raising the level of service at every stage of member contact.

8

More and more, members look to MSUFCU to provide a one-stop financial center to handle all their financial activities. Services necessary to address life stages and various life occurrences necessitate that MSUFCU offer financial planning, trust accounts and investment accounts. After months of due diligence, MSUFCU selected Rehmann Financial as a partner in providing these services. Rehmann Financial was selected, because like MSUFCU, it offers a wide range of services, investment choices and holds a similar member, or client, relationship. They offer a holistic approach by evaluating every member’s needs. Along with this, a regular review of a member’s financial well being determines if the right decisions have been made; or, in the case of life events, the member’s situation has been altered. After training of staff and establishing office hours, Rehmann Financial is available to members at all our offices. Insurance service was another area requiring review. A partnership with Members Home and Auto Insurance was formed. MSUFCU’s membership now has the opportunity to shop several agencies with one phone call or a single online visit. Reviews on this service have been favorable with some members greatly reducing the cost of their insurance. A downtown Lansing presence was attained by the installation of an exterior ATM on Washington Avenue. This

Joan Moody, Vice President of Branch OperationsJohn M. Savio, Vice President of Oakland University OperationsDaniel Van Haften, Vice President of Information Technology

ATM serves part of the membership working for the state or attending Lansing Community College or Cooley Law School. It has significant transaction volume for the short time it has been operational. Protecting members’ VISA accounts from fraudulent transactions through counterfeit cards is an ongoing challenge and a top priority for MSUFCU. To give our members additional card security, we use the VISA Falcon fraud detection system, which continuously monitors MSUFCU card activity to help identify and prevent fraudulent transactions on our members’ accounts. If suspicious charges or transactions are being made on an account, the member is notified immediately to authorize that transaction. Falcon has reduced the number of fraudulent transactions and members receiving calls regarding such transactions have been pleased with our effort. Our goal is to offer member service that is friendly, efficient, convenient and answers individual needs.

Joan Moody Vice President of Branch Operations

Preparing for the conversion of our main office on East Crescent Road to a branch office has been an ongoing process throughout the year. The initial phase demanded that additional employees be assigned branch positions and a branch manager identified. After assigning positions, space was reallocated for our new branch employees. When our new headquarters is completed, the Crescent branch will undergo more substantial remodeling to better accommodate the branch function. There are now 113 branch employees, six managers and seven branches. With the new headquarters housing a branch on the first level, there will be six branches in the Lansing area and our Oakland University Branch Increased efficiency is always important in serving our membership. Our members may be faced with a teller line upon their arrival to one of our offices, but they do not wait long. Our service level is high and fast. New equipment enhancing this process is the cash recycler. Cash is inserted into the recycler, counted by the machine and withdrawals in the correct denominations are counted by the machine and disbursed to the teller. Nightly balancing has never been easier or more correct, there is little to no cash in the drawer enhancing security and the membership is speeded through the line.


Cost containment is another important concern. To reduce overtime, branch employees work every other Saturday with a day off during the week a Saturday is worked. Having everyone working Saturdays also boosts morale as Saturday duty was previously relegated to our less senior employees. More branches, well trained staff, and superior service are our goal. Locating property for building our branch network is an ongoing process requiring due diligence and forecasting areas for future growth.

John M. Savio Vice President Oakland Operations

This year the credit union celebrated fifty years of providing unparalleled financial services to the Oakland University faculty, staff, students, alumni and surrounding community. In 1957, Michigan State University pioneered a new university in “rural” Oakland County…MSU-Oakland. The credit union responded immediately with the simultaneous opening of an Oakland County branch office located directly on campus. Though we have long outgrown that office, our dedication to serving the Oakland University Community has not changed. Our golden year was made even more significant with the launch of the credit union’s first affinity credit card. Thanks to the combined efforts of the entire management team, the credit union developed a highly competitive, low fixed-rate product with an elegant “top-of-wallet” design for the Oakland University Alumni Association. Each use of the card will provide valuable funding for student scholarships and quality programs through the OUAA with no additional effort or expense to the user. The new OUAA Affinity VISA Card was introduced to 72,000 OU alumni and friends across the globe in fall 2007. Additionally in 2007, in response to member requests, we increased the number and scope of our educational seminars. We brought in various experts to explain and assist with the many issues and challenges currently impacting our lives, community and country. From advice on retirement to estate planning the sessions provided reliable information and assistance on timely topics to members and the general public. The team at the Oakland office is proud to have the opportunity to serve members’ needs in Oakland County. It is our aim to be the most rewarding relationship our members have with any financial services organization.

Daniel VanHaftenVice President of Information Technology

More members do their transactions remotely than visit an office or branch. With ComputerLine, MoneyLine, ACH transactions, ATMs, checks, direct deposit and our contact center, members are able to do everything without taking the time to make a personal visit. Information technology is dedicated towards making these processes efficient and secure. Recently, IT was instrumental in bringing e-statements in-house for cost savings and efficiency. VISA offers particular concerns regarding safety. Fraudulent activity because of skimming, counterfeit cards or just a lost card, can result in purchases made unbeknown to member cardholders. Because our Falcon system alerts members at the time a possibly fraudulent transaction is being made, the occurrence of such transactions have been significantly reduced. Members are encouraged to advise MSUFCU when they are traveling to reduce the possibility of a transaction being denied while they are in foreign countries. To inform members traveling abroad, countries where transactions are blocked because of higher incidents of fraud, are listed on our website. New online enhancements for our members include an annualized expense report for VISA accounts, automatic account set up for new members joining at our partner auto dealers, certificates can be renewed and opened via ComputerLine, and enhancements to ACS (Account Cross Service) were completed to improve the level of member service offered by our tellers, contact center and loan specialists. Members are introduced to services that would make their life easier such as automatic loan payment when a late payment might result in a fee; overdraft protection to avoid future checks being returned for non-sufficient funds; Platinum Plus VISA and its cash back rewards for the member paying an account in full each month; and interest earning Money Market Checking for those carrying high balances in their regular checking account. There is no change to a service or addition of a new service that does not require significant effort by IT to accommodate those enhancements. Being ready so that progressive services can be introduced to the membership requires that many changes be in place and tested long before the membership has the opportunity to use the service.

10

what’s ahead in 2008


New Headquarters:

MSU Federal Credit Union’s new building will be up and operational in the summer of 2008. The new building offers the convenience of bringing together our contact center, adjustment and finance departments who have been off site for several years. Once space was rented to house these departments, plans were underway to locate property and begin the design of a new building to meet current needs as well as those for future growth. A location that would enable us to meet member needs while we continued to expand our membership and services. Members will be proud of the new building that they have made necessary and built through their use of MSU Federal Credit Union for their financial services. Most notably, the building will be a green building—and green is always good in Spartan Country. Headquarters is being constructed with LEED (Leadership in Energy and Environmental Design) certification in mind. Taking this a step further, the meadow, part of the 33 acre tract, will be used by the MSU department of plant and soil science to study indigenous plantings and their survival as optimum hydration varies due to climate changes. Water collection gardens will protect the soil from runoff and erosion. Use of recycled materials in the construction of the building will be environmentally safe. The building takes every advantage of natural light enhancing the attitudes of MSUFCU employees.

An exercise center with motivation from human resources will contribute to overall employee health and add a great deal to our employee’s personal lives. A new staff cafeteria will offer lunch and snacks. East Lansing residents are already applauding the architecture of the new building and look forward to a grand opening. Business accounts will be enhanced to include a sweep account to maximize the earnings of our business members and a Business VISA will allow members to take advantage of our low VISA rates. Mortgage information will soon offer all payment history immediately available. Future enhancements to bill payment include calendars, text message reminders, gift checks, and opening screens detailing any payments made, upcoming payments and current balance information. The website has undergone many changes and will continue to evolve as we add additional information necessary to our members’ financial decision making. Our goal is to make the service as friendly, easy, convenient and as seamless as possible through all platforms—a visit to the office, a call to our contact center or online contact.

Saving Options 2006 2007

Share Certificates $390,312,913 $420,621,265

IMMAs $436,881,274 $484,769,813

*IRAs $89,884,653 $99,564,747

Loans (net) $996,291,152 $1,050,931,083

**Lifetime Membership 23,684 (17.6%) 25,539 (18.2%)

*IRAs consist of IMMAs and Share Certificates** Members living outside of Michigan

what’s ahead in 2008

12

Dear Members:

Michigan State University Federal Credit Union had another successful year in 2007. MSUFCU grew in Assets to $1.45 billion from $1.31 billion in 2007. Total Capital increased from $160 million to $179 million. In short, during a economically difficult year the credit union remains a strong and growing financial institution. In 2007, the credit union was recognized by the Lansing Regional Chamber of Commerce for the Credit Union’s success and contribution to the local economy.

You can be proud that MSUFCU did not issue the subprime mortgages that caused the losses and write downs at other financial institutions. The credit union did not offer these products because they were not in the best interest of the credit union’s member owners. In addition, the MSUFCU has not invested in the high-risk mortgage-backed securities, or any similar investment.

During these trying times the credit union continued to invest to improve the quality and convenience of service. The credit union continues its investment in technology necessary to improve the quality and efficiency of service provided to the membership.

The key to quality service is the attracting, training and retaining of highly qualified and motivated staff. For the second year in a row, MSUFCU was selected as one of the 25 Best Places to Work For in the United States by the Society of Human Resources Management in 2007.

The major investment for the credit union in 2007 and 2008 is the new headquarters building and branch office. The new headquarters and branch office are scheduled to be completed and opened by mid-summer. The headquarters drive-up teller and ATM buildings opened in January 2007.

On behalf of the members, I would like to take this opportunity to thank the board of directors and all of the volunteers for time they dedicate to the success of the credit union. The credit union is a cooperative owned by the members, with leadership provided by the volunteer board of directors.

Thank you for allowing the credit union to provide your financial service.

Sincerely yours,

Patrick M. McPharlinPresident/CEO

from the president


from the president from the chairmanDear Member:

As we all know, 2007 was a difficult year for most financial institutions. Because of sound management, prudent investments, moderate lending practices, efficiencies in operations and a stable membership, MSU Federal Credit Union has remained strong and continued to grow. MSUFCU has not only grown, it has increased the level of service to members and maintained its pattern of offering competitive rates to our savers and our borrowers.

Most notable is the steady increase in use of services by all members. Members use MSUFCU for more of their financial services, in large part because they can rely on a highly trained staff that understands and practices the “member first” philosophy that has guided the credit union since it was chartered. Our out-of-state members rely on us for more services as well. Many members have their checking accounts and all their savings with us even though they are living in distant cities or traveling throughout the country and the world. As our members increasingly embrace technology, more members, no matter where they live, handle their day-to-day transactions with us. ComputerLine enables members to conduct just about any transaction necessary, online in real time. When direct deposit of a member’s pay or retirement check posts, funds are available for immediate access at an office or an ATM as well as tracked online. Should there be a problem, a knowledgeable contact center specialist is ready to help. Some financial institutions restrict withdrawals even on cash and electronic deposits.

On behalf of the MSUFCU board of directors, I would like to thank our management team and our employees for their service and for going the extra mile whenever necessary, for understanding member concerns and for taking the steps to see that any problems are resolved in a friendly and efficient manner.

We also thank the membership for their confidence and for referring their family and friends to MSUFCU. It is always a pleasure to review member surveys and see that our membership ranks us so highly and recommends us to others. There is nothing more important than a member’s endorsement of our services.

Sincerely yours,

Thomas A. ScarlettChair, MSU Federal Credit Union Board of Directors

Thomas A. Scarlett, Ph.D.Chairman

John R. Brick, Ph.D.Vice Chairman

Nancy E. CraigTreasurer

Mary D. ZehnerSecretary

Angela Brown

Lonnie C. Eiland, Ph.D. Ralph E. Hepp, Ph.D. William Latta, Ph.D.

14

valuable expertise

William D. Kenney


$0 $300 $600 $900 $1200

2004 $ 1,167,240,902

2003 $ 1,083,781,496

2007 $ 1,450,443,231

2006 $ 1,317,633,684

2005 $ 1,242,942,513

Total Assets

$0

2004

Total Reserves

$40 $80 $120 $160 $200

$ 137,092,078

2003 $ 125,460,252

2007 $ 179,070,444

2006

2005 $ 148,006,057

$0 $200 $400 $600 $800 $1000 $1200

2004

Loans Outstanding (net)

$ 830,999,235

2003 $ 767,667,961

2007 $ 1,050,931,083

2006 $ 996,291,152

2005 $ 911,251,651

$200$0 $400 $600 $800 $1000 $1200 $1400

2004

Total Shares

$ 974,917,736

2003 $ 904,271,602

2007 $ 1,169,531,311

2006 $ 1,098,348,225

2005 $ 1,037,856,444

0 30 60 90 120

2004

Membership

123,698

2003 119,420

2007 139,936

2006 134,488

2005 128,612

$0 $20 $40 $60 $80 $100

2004 $ 72,562,662

IRAs*

2003 $ 66,707,783

2007 $ 99,564,747

2006 $ 89,884,653

2005 $ 81,221,765

$0 $5 $10 $15 $20

2004

Dividends Paid All Savings

$25 $30 $35

$ 17,781,723

2003 $ 18,984,055

2007 $ 38,415,463

2006 $ 33,118,844

2005 $ 23,738,578

* IRAs consist of IMMAs and Share Certificates

$0 $100 $200 $300 $400

2007 $ 484,769,813

2006 $ 436,881,274

2005 $ 383,697,806

2004 $ 347,936,072

2003 $ 291,159,376

IMMAs

$ 160,815,477

five-year history

Founded by volunteers, MSU Federal Credit Union continues to rely on the expertise of a strong volunteer base that includes committee members and our Ambassadors. All our volunteers offer insight into how best to serve our University communities.Their valuable input has resulted in MSU Federal Credit Union becoming the world’s largest University-based credit union.

Consumer Education Committee

Roger Niemeyer, Ph.D., Consumer Education Committee Chair Ray Hilton, Marketing Specialist Joyce M. Banish, V.P. Marketing Gloria Kielbaso, Ph.D. Mary Ellen Furseth Jessie Kolka, Events Planner Ralph Hepp, Ph.D., Board Liaison

“The economy necessitates that, perhaps more than ever, we be informed consumers. There are less dollars to spend and mistakes are often costly. MSUFCU’s consumer information series is just one resource available to members and those of the community. Another area of concern is protecting oneself from identity theft and the cost and anxiety of correcting one’s credit report. Seminars from purchasing a home to buying and selling on eBay help members make sound decisions. Partnerships with the MSU College of Law and the MSU Women’s Resource Center not only increase attendance at our seminars, but further develop relationships within the University community.

Most campus presentations relate to maintaining a good credit score. They have resulted in positive reviews with many college students reporting that the information would be valuable as they dealt with debt resulting from credit card spending and college loans.” Roger Niemeyer, Ph.D., Consumer Education Committee Chair

Supervisory Committee

Gregory Deppong, CPA, Supervisory Committee Chair Cheri Speier, Ph.D. Ernest Betts, Ph.D. Keith Williams, Ph.D. Lonnie C. Eiland, Ph.D, Board Liaison. Denise Zieleniewski “The multitude of Federal regulations poses challenges to every financial institution. The supervisory committee oversees and makes recommendations to maintain compliance. Members can rest assured that MSUFCU meets these regulations with timely audits by Federal regulators, our external auditing firm and the MSUFCU internal audit department. Further, security of member information remains among the highest priorities of the credit union. The MSUFCU technology team is constantly monitoring the credit union’s security landscape to ensure member protection and compliance with Federal information security regulations. The supervisory committee is regularly briefed on matters of member security and oversees and fully supports timely examinations of such matters by both internal auditors and external reviewers, including intrusion specialists.” Gregory Deppong, CPA, Supervisory Committee Chair

16

volunteers offer their time & commitment...every step of the way


volunteers offer their time & commitment...every step of the wayAsset-Liability Management Committee

John R. Brick, Ph.D., CFA, ALCO Chair Ralph E. Hepp, Ph.D. Jeffrey S. Benson, CPA, V.P. Operations William Latta, Ph.D. Angela Brown Patrick M. McPharlin, President/CEO Tiffany L. Ford, CPA, V.P. Finance Thomas A. Scarlett, Ph.D., Board Chair

“Over the past year conditions in the financial markets have deteriorated to produce the most difficult operational environment for financial institutions in several decades. Declining housing values across the country, a slowing economy, inflationary pressure, rising energy costs and job losses have greatly strained consumers and many businesses. These conditions have resulted in major problems for many of the world’s largest investment banks, commercial banks and other financial institutions. Despite these extraordinarily difficult conditions, the MSUFCU continues to perform exceptionally well as indicated by its financial performance in 2007. The ALM Committee (ALCO) closely monitors these conditions through meetings and reports. This committee then makes recommendations to management to ensure that the financial integrity of the credit union remains intact and that we continue to serve members in the best possible manner.” John R. Brick, Ph.D., CFA, ALCO Chair

Member Services/Membership Committee

Al Thelen, Member Services/Membership Chair Patricia Riley Joyce M. Banish, V.P. Marketing Robert Wenner Stella Cash Mary Zehner, Board Liaison Cynthia Perry, Marketing Administrative Assistant

“Membership continues to increase because of the excellent services offered and the service provided by MSUFCU employees to its members. Member retention is high as those leaving the state maintain membership and continue to use services. Many use MSUFCU for all their financial needs including checking. While MSUFCU has always enjoyed a substantial out-of-state membership, the use of online and remote services enhances the relationship. The availability of free ATMs through the Co-Op Network, ComputerLine, direct deposit, knowledgeable contact service specialists with extended hours and a dedicated initiative to assisting our out-of-state members, enables all our members to use all of MSUFCU’s services with convenience and ease.

In town or out of town, members can rely on services with reasonable costs and convenience to answer their financial needs for a lifetime. Our Ambassadors spread the word about lifetime membership to those on our campuses.” Al Thelen, Member Services/Membership Chair

Marketing Committee

William D. Kenney, Marketing Committee Chair Patrick McPharlin, President/CEO Joyce M. Banish, V.P. Marketing Thomas A. Scarlett, Board Chair Sarah McCarthy, Senior Marketing Specialist

“There are service offerings for every age group from birth with the Lil’ Sweet Pea Club, teens, grads, our new younger “movers and shakers” and our retirees and Senior Class. Targeting each group has allowed MSUFCU to maintain a younger membership than what is found at most credit unions. MSUFCU’s holistic approach to providing service allows us to meet the needs of both our savers and our borrowing members.

Promoting to our varied groups requires finely targeted messages using a broad range of media from radio and television to billboards and print advertising. E-mail notification of special offers and incentives has fast become an ideal way of reaching the younger members who may not respond to direct mail. This approach of mixed media along with some exciting promotions such as our Real World Makeover and Ideal Room Makeover have become very successful promoting individual services to our members as well as attracting new members.” William D. Kenney, Marketing Committee Chair

18

Oakland Ambassadors

Janice AheeKim AllanSandra AllenJames ArtabasyJan Lee AsmannRobert AsmannDiane BarkerErin BarnetteAudree BaxterKathy BelangerErnest BettsJan BettsRalph BonnerCherie BoomsDoris BrewerJohn R. BrickJeff BrodieWilliam BrosmannAngela BrownBlair BullardShirley BullardBarbara BurnettKay ButcherLynne CampbellDorit CardChristine CarterJerry CashStella CashAlbert ChapmanKaren ClineKathleen CoffeyLarry ColeGary ConnorShari ConroyNancy CraigDoug CronPatrick CusickJulie DansbyJudith DeJaegherKathleen DeneauKenneth DeneauGreg DeppongSusan DePoorterEckhart Dersch

MSU Ambassadors

Carla DombroskiWilliam DonohueBill DrakeLisa DupreeThomas DutchSusan DutcherLonnie EilandMarcia EvansPhil FighterJodee FortinoSharron FrucciMary Ellen FursethChuck GaglianoMichael GardnerJoan GillilandKaren GrannemannSharon GraverMarilee GriffithJodi HancockJay HarmanRosemarie HarmanBarbara Harrison-KingTina HartMary HarveyBruce HaskellMary Lou HeberleinPaul HeberleinMary HempstedRalph HeppMary E. HillK. Gale HinesCharles HornburgMary HorvathRichard HoweCheryl HowellLaurie HuntleyRoz JafferDarlene JohnsonCarol JordanBarbara JudgeEd KarazimFred KayneSally KeislingJoanne Keith

Georgette KennedyWilliam KenneyDebby KenrickGloria KielbasoTim KnightBarbara KnuthDenni KraftJudith LamphereSuzanne LaninghamBill LattaAggie LewisRhonda LienhartJonnie LillyWilliam MageePamela MarcisRon MateerDean I. MatsudoBarbara McClearyM. Chandos McCoyMary McDanielMatt McKuneVicki McPharlinJudy McQueenGreta McVayJune MessnerBob MeyerJudith MillerKathleen MillsSandy MoreyRoger NiemeyerCarol NoudDoug OwenNancy PassananteSuzy PavickKaryn PearlEvelyn PorteeDeborah PowellAngelica RadfordMarcia RatliffJan ReidSonya RibnickyMichael RicePatricia RileyJohn Roberts

Judith SalminenThomas ScarlettMary SchwalmMary Jane SchwartzSharon ShaftPaula ShappelCarol ShaulisJames SheppardMarilyn ShielsJoAnne ShoemakerNina SilbergleitMark SimmonsJoan SmithRon SmithJames SnoddyBrenda SpackmanBrenda SternquistCristine StockJulie StonerPaula TerzianAl ThelenKatherine TrebilcottFrank TumaNancy VanderwestGeorge VanDusenRosemary WalkerMarsha WalshLeigh WaltersdorfSusan WaltersdorfS. Faye WatsonRobert WennerKeith WilliamsRobert WiltsieSally WisnerNancy YeadonMary ZehnerDonna Zischke

Elizabeth Angeli-PolycynDavid ArchboldDawn AubryScott BarnesNancy Barton-KennyAdrienne BassPat BennettDavid BirkholzJanet BohlenSheila CarpenterCharles ClarkVirginia CloutierEric CondicSarah CoxRob DotyDavid DowningAnn DunlopSandra FickPaul FranklinPieter FrickSandy GabertKitty GentileFrank GiblinMelvin GilroyGeraldine GrahamCora HansonRobert HansonKen HightowerMary IsaacsAlexis IversonDan JaffeJenny JohnsonLaura JohnsonGreg JordonMike KazyakEllen KeatonDonna KellstromSandy KernBonnie KochCatherine KononKim KopaczeskiCatherine KorreckJeanette KutcheyMichael LedfordAnn LeighKelly LendaBarbara Line

Joanne LitkeDanielle MarineJulie McCarrelLaurel McDanielBarbara McDowellKaren MeyerGail MeyersDeborah MiddlebrookJean Ann MillerVirinder MoudgilDaniel NiezurawskiJude NixonMary OttoJohn PagelJane ParpartGeorge PreisingerLinda PriceAmy PriceEleanor ReynoldsGerald RhadiganMychelle RobertsSusan RothfussGail RyckmanLaura SchartmanMaura SelahowskiLeigh SettlemoirSteven ShablinAnnmarie SheppardJonathan SilbermanJill SimpsonKim StallingsAl SteeleTammye StovesLinda SwitzerLinda ThompsonGrover TigueJean TimmerRonald TracyChris TurkoppLinda TylerGeoffrey UpwardTracy UtechDavid VartanianJulie VoelckMarsha WhartonHazen WilcoxJoan WilliamsDiane Wyffels

ambassadors


employees

Matthew AdairAndrea AlburtusLichiu AldrichAmanda AlsdurfSamantha AmburgeyLea AmmermanMaisean AndersonJean AntonCraig ArensLisa ArmstrongKathy Baecker-SmithJianjun BaiAnthony BairdMichelle BaldinoErica BancroftJoyce BanishAndrea BarnardBret BarrKristin BarringerErin BartonNancy BearssDebra BeehlerTraci BellRonda BennettJeffrey BensonSandra BlankenMatt BoardmanAshleigh BoardwaySarah BohanValerie BorgShirley BouchaSally BoyerKelly BradleyLisa BrinkAbbie BroughmanMallory BrownLaurie BurkholderJustin BushPierre ButlerPhilip CampionRonald CapuleNancy CarpenterAaron CarterKevin CarterLori CasadayHeather ChamberlainDale Clark

M’Lisa ClarkApril ClobesAmy CoeElizabeth CohenPenny CollinsScott ConatonCindy ConroyBonnie CoomesCherilyn CornellElizabeth CourterGlen CoverdellRae CoxTammy CraftSarah CruzAmanda DakroubJessica DeatonHeidi DeckerCortney DelineDiane DemariasJacqueline DermarcoAlexa DiazSilvia DimmaCarol DimmickTheresa DinkinsJennifer DochertyAnne DuffyKerrie DunckelJudy DunnHeather EifertSamantha ElmoreElizabeth EscojidoKathleen FabianSherrie FairweatherJenny FameuxPaula FarringtonDenise FergusonTiffani FergusonChelsey FetherJennifer FillioKimberly FloodTiffany FordLavone ForsmanAmanda FrancoVanessa FrassettoAnn FreelsAnne FuhrigKimberly Fullerton

Cheryl GammKim GarnaatDebra GarveyCynthia GellerAdam GeorgeChintana GeorgeSenait GhirmaiMichelle GilmanAmber GladneyBruce GreenwayJames GroenRaquel GuizarWilliam HagenChristine HammondGail HarpsteadMichelle HathawayJoy HazardJacqueiline HeniserTimothy HigginsRay HiltonBarbara HoldaLaura HoseyHeidi HubbardSean HubertyErin HuntElizabeth HutchingsMelisa HutchingsCraig IrishKristi IzzatDebra JacksonJeffrey JacksonEmily JannerethJeannette JenkinsDelinda JensenLisa JohnsonPaula JohnsonJoseph KaczanowckeIrina KaminskayaSue KarrRashae KateleyDianalee KeckKimberly KelleyMary KestersonGeoffrey KeyesJulie KingTara KingKelly Knopps

John KnottJanet KochJessica KolkaNicole KolodicaAnita KoonterDonna KruegerJan KujansuuKelli KuklaErindira LackAndrea LampmanJeannine LandellsBrandon LardieRyan LarsenSara LemonTiffany LeonardKevin LerchAlana LezotteWanyu LinLatonya LloydDelores LoveDianna LovellSharon LownsberyMichael LudwickMichelle LudwickJudy LynchRachelle LynchMargaret MacDonaldBrenda MakaraRhodope MartinBenjamin MaximRachelle MayesSarah McCarthyChristopher McClureDiana McFaddenDana McGowanPhyllis McKennNora McKenzieSara McKonePatrick McPharlinCarla McWherteMario MedinaVera Casie MedinaNelia MendezJesus MendozaCicely MerrellErin MerrillJulie Meschini

Ashleigh MillerBlake MillerDiane MillerJordan MillerPaula MillerSteven MillerStephanie MinottVeronica MitchellKristeen MondoskinKerry MonroeLynsi MontgomeryJoan MoodyCarolyn MossSheryl MunschyKevin MurchisonMirela NaeAmanda NasorAndre NguyeLonni NixonJoseph NortonStephanie NortonKaren O’DellMary OlenjniczakTarissa O’MalleyAnna PackerGia ParkerMona PatelKristina PatrickJacqueline PawlukWilliam PeifferDelores PeltierDione PenaJane PerezCynthia PerryDan PerryJessica PetteysBeverly PikeLisa PiperJeffery PluffEdward PniewskiTina PotterJeffrey PowersBrad PremoeDeborah PremoeAndrea QuinteroSharon RabyLori Rains

Deanne RamosMark RathwellChantell ReedJoan ReedMatthew RhodabeckDouglas RichardsonMary RichardsonLisa RileyDebbie RiningerJenny RiversDeanna RobbinsLinda RobinsonDeborah RoeElizabeth RoqueJulie RosenthalJohn Rossrielle RouseTimothy Sanchez MustaphaJohn SavioNaomi Savoie-MillerLindsey SchaferNicole SchaferSteven SchaferAl SchefflerVicki SchlakMichelle SchmittBarbara SchneebergerAndrea SchreindlPatricia SchuellerJean SchulzZuzana SequinDeborah SerranoDiane ShannonKarla ShappeeBess Ann SheppardDenise ShermanSherry ShookMelissa SimmonsRachael SingletonTeresa SlaghtSusan SleightCarol SmithSara SmithChristine SouthwellHeather SpaydW. Riley SpaydeBonnie Stevens

Arnold StiefelTimothy StraszStanley StroiwasMichael StruzinskiMary StuartMarjorie SuratoBrenda SwansonAnita SwistaraBeverly TaborLisa ThelenKathleen ThomlisonChristopher TrumbleJudith TuckerChristopher TylerAnn VaillancourtDebora Van AmbergHeather VanAmbergAmanda Van EssSherrie VandegriffStacie VanDenBergheJason VanderlaanLindsey VanderlaanAnna VandorpeDaniel VanHaftenCaroline VanhoutenArsiola VashaCindy VoisinetCarrie WalkerDiane WallasHeather WalleyTrisha WalleyKevin WalterMona WalterAndrea WaltonHeather WarnellRuth WeaverSellenna WeaverNathan WearnerSarah WesolekChristopher WickhamKenya WilliamsTimothy WilliamsStacy WillisonJacqueline WilsonPatina WoodTeresa WoodMichael WoodstockRebekah Zorgdrager

Finding solutions and making things possible

When we think about our members, most come for their basic financial services: checking, savings and access to funds. Our members often require more—they need solutions. Perhaps it is a way to save for retirement; a loan for adoption services; access to their checking not just in town, but for a trip to another continent; or perhaps the addition of a bedroom suite so that Dad can live at home. Solutions are necessary and need to be expedited in a way that suits each member’s budget and timetable. MSUFCU employees are sensitive to those needs and work toward members finding workable solutions to their requests. They make each member interaction positive through their hard work, personal assistance and knowledge. We thank our employees for making our “member first” philosophy reality.

20

volunteerismFounded by a handful of professors, MSU Federal Credit Union has grown to be the world’s largest University-based credit union. The volunteer spirit continues with a volunteer board of directors, a strong Ambassador program and a management team dedicated to serving its community. Our management team shares their expertise with the listed organization and many others.

Michigan State UniversityKresgeMSU Alumni Association National BoardMSU Federal Credit Union Dinosaur DashMSU Museum Development BoardMSU Safe PlaceMSU Summer Circle TheatreUniversity Club of Michigan State UniversityWharton Center for Performing ArtsWKAR Reading Book Program

Lansing CommunityCapital Area United Way BoardChild and Family Services-Capital areaHabitat for HumanityGrand Ledge Chamber of CommerceLansing Chapter of the MCULLansing Regional Chamber of CommerceLansing Symphony OrchestraLEAP Inc. (Lansing Economic Area Partnership)Zonta of Meridian Area

Industry American Institute of Certified Public AccountantsBeta Gamma SigmaCenCorp Board of DirectorsCenCorp ALM CommitteeCUESCUNAHuman Resources Management Association of Mid-MichiganInforumKomen Race for the CureMichigan Association of Certified Public AccountantsMCUL Awards CommitteeMCUL Community Reinvestment Future Vision InitiativeMCUL Michigan Advertising BoardMCUL Growth Strategies for Credit UnionsRed CrossSociety of Human Resources ManagementSymitar Advisory Board

Oakland UniversityAthletic Department Advisory CommitteeSchool of Business Administration Board of VisitorsProject Upward Bound Oakland AreaWomen’s Council of RealtorsCommunity Foundation of Greater Rochester Avondale Education Foundation Auburn Hills Chamber of CommerceDetroit Chamber Winds & Strings/Eisenhower Dance Ensemble

600 East Crescent Road, East Lansing, MI 48823(517) 353-2280

800-MSU-4-YOU

michigan state university federal credit union 2007 annual report

Documents