2020-10-06T14:22:07-05:00 2019-12-31 910189318 MOSS ADAMS LLP 2707 COLBY AVENUE SUITE 801 EVERETT WA 98201 990 2019-01-01 910557925 SOUND CREDIT UNION SOUN 2535977603 PO BOX 1595 TACOMA WA 98401 TROY GARRY CFO 2535977603 2020-10-05 1 COLLEEN RAMIRES P01251320 4252597227 2020-10-05 76.121.192.40 2020-10-05 17:27:23 PD P DA39A3EE5E6B4B0D3255BFEF95601890AFD80709 3EF74A9F095120C19DBF54175AA7CEC7F455DBD7 2019 2021-04-22 16:20:28Z DONALD CLARK JR PO BOX 1595 TACOMA WA 98401 99114102 0 X WWW.SOUNDCU.COM X 1940 WA COOPERATIVE PROVIDING FINANCIAL SERVICES, INCLUDING LOANS AND SHARE DEPOSITS TO ITS MEMBERS. 9 9 469 0 385808 0 0 0 74735632 89645251 4723676 7046509 -131016 -57700 79328292 96634060 161173 295000 0 0 25999369 31049122 0 0 0 32051442 46349877 58211984 77693999 21116308 18940061 1532196727 1840118126 1328862497 1617176338 203334230 222941788 A MEMBER OWNED COOPERATIVE PROVIDING FINANCIAL SERVICES, INCLUDING LOANS AND SHARE DEPOSITS TO ITS MEMBERS. 0 0 ON THE LIABILITY/EQUITY SIDE OF THE BALANCE SHEET OUR MEMBERS HOLD 235,824 SAVINGS, CHECKING, AND MONEY MARKET DEPOSIT ACCOUNTS WITH COMBINED BALANCES OF $1,299,846,734. MEMBERS HOLD 2,102 IRA SAVINGS ACCOUNTS WITH COMBINED BALANCES OF $21,158,889. THESE FUNDS ARE POOLED AND USED PRIMARILY TO FUND CONSUMER AND REAL ESTATE SECURED LOANS TO OUR MEMBERSHIP. ALSO ON THE LIABILITY/EQUITY SIDE OF THE BALANCE SHEET, 8,678 OF OUR MEMBERS HOLD CERTIFICATE ACCOUNTS WITH TOTAL BALANCES OF $274,705,116. ON THE ASSET SIDE, 74,854 OF OUR MEMBERS HOLD CONSUMER LOANS THAT INCLUDE VEHICLE, STUDENT, MORTGAGE, AND VISA LOANS. CONSUMER LOANS THAT INCLUDE VEHICLE SECURED LOANS TOTAL $543,632,825. REAL ESTATE SECURED LOANS TOTAL $716,152,043. THE LOAN PORTFOLIO TOTAL $1,417,697,537. 0 0 1 0 0 0 0 1 0 1 0 0 0 1 1 0 1 0 0 0 0 0 0 0 0 0 1 1 1 0 1 0 0 0 0 0 0 0 0 0 1 1 0 0 1 15920 0 1 469 1 1 1 0 0 0 0 0 1 0 X 9 9 0 0 0 0 1 1 1 1 1 0 0 1 1 1 1 1 1 1 1 0 X TROY GARRY 2535977603 1331 BROADWAY PLAZA TACOMA WA 98401 BRENDA HEINEMAN BOARD CHAIR 1.00 X X 25000 0 0 DAVID WASSON VICE CHAIR 1.00 X X 20000 0 0 SHELLEY COLEMAN SECRETARY/TREASURER 1.00 X X 20000 0 0 BARRY WALLIS DIRECTOR 1.00 X 20000 0 0 JOHN BAUDER DIRECTOR 1.00 X 20000 0 0 KEITH MOCK DIRECTOR 1.00 X 19625 0 0 JAMES GRIGGS DIRECTOR 1.00 X 18875 0 0 ALTAF MERCHANT DIRECTOR 1.00 X 15000 0 0 HALUK DEMIRKAN DIRECTOR 1.00 X 15000 0 0 DONALD CLARK JR PRESIDENT/CEO 50.00 X 1277519 0 588146 TROY GARRY EVP/CHIEF FINANCIAL OFFICER 60.00 X 360278 0 50758 WENDY CLEVELAND EVP/CHIEF OPERATIONS OFFICER 50.00 X 351600 0 41725 ROBYN LACHANCE EVP/CHIEF STRATEGY OFFICER 50.00 X 288149 0 34632 LYMAN WILLIAMS SVP/CHIEF LENDING OFFICER 50.00 X 252248 0 48260 KIMBERLY MAPES SVP/CHIEF EMPLOYEE ENGAGEMENT OFFICER 50.00 X 224171 0 29607 CHARLENE HENSON SVP/CHIEF RETAIL OFFICER 50.00 X 217637 0 29019 RYAN HORAN BUSINESS LOAN OFFICER 50.00 X 167664 0 31615 ANNA ALBERTIN VP/MORTGAGE LENDING 50.00 X 161723 0 40113 JASON MCDOUGAL BUSINESS INTELLIGENCE MANAGER 50.00 X 147983 0 38877 SANDY LOPEZ VP/CONTROLLER 50.00 X 145136 0 30900 SARAH MEIKLE MORTGAGE LOAN OFFICER PRODUCTION SUPERVISOR 50.00 X 131747 0 28382 3899355 0 992034 36 0 1 0 MEDIA PLUS 160 ROY ST SEATTLE WA 98109 MEDIA/COMMUNICATIONS 1848257 NCR CORPORATION 14181 COLLECTIONS CENTER DRIVE CHICAGO IL 60693 DIGITAL BANKING SERVICES 1489935 MOMENTUM INC 1520 4TH AVE SUITE 300 SEATTLE WA 98101 ARCHITECTURAL/CONTRACTING SERVICES 1406916 AUGEO 1620 BOND STREET NAPERVILLE IL 60563 CARDHOLDER REWARD PROGRAM 1213941 WONGDOODY INC 1011 WESTERN AVE STE 900 SEATTLE WA 98104 ADVERTISING SERVICES 1081796 41 LOAN INTEREST INCOME 522291 65113895 65113895 FEES AND CHARGES 522100 10397225 10208336 188889 INTERCHANGE 522299 10264722 10264722 LOAN ORIGINATION INCOME 518210 1126578 1126578 FINANCIAL SERVICES 522100 507492 421218 86274 2235339 2124694 110645 89645251 6429321 6429321 325709 383409 -57700 -57700 -57700 2713821 2096633 617188 617188 617188 96634060 89259443 385808 6988809 279000 16000 3967250 19856899 1734889 3447126 2042958 109294 119222 320020 2355862 707727 7050535 1600718 2221675 801417 262306 8629799 2836238 LOAN SERVICING 6447904 PROVISION FOR LOAN LOSS 4897111 BANK FEES 4619860 MP AMORTIZATION OF CDI 2249322 1120867 77693999 15643996 24167142 169903005 209022259 7732935 9018568 0 11292149 1175947137 1402487985 1628267 1567303 70671400 23790519 38949174 46880881 89747416 84429800 3665402 3832809 3459134 24113838 25520261 23305392 1532196727 1840118126 18494973 19114364 1310178 2109594 0 1769490 1309057346 1594182890 1328862497 1617176338 X 0 0 0 0 203334230 222941788 203334230 222941788 1532196727 1840118126 18940061 667497 0 X 0 1 X 1 0 15187 0 0 15187 15187 1 CREDIT UNION LEGISTLATIVE ACTION FUND 18000 INTERNATIONAL BLVD SEATAC WA 98188 800043051 15187 PART I-A, LINE 1: THE CREDIT UNION CONTRIBUTED TO A POLITICAL ACTION COMMITTEE WHOSE FUNDS ARE USED TO MAKE CONTRIBUTIONS TO SUPPORT THE ELECTION OF CREDIT UNION-FRIENDLY CANDIDATES FOR STATEWIDE OFFICE AND STATE LEGISLATURE. 0 1 X 18441216 18441216 35252224 13378482 21873742 3462817 1382504 2080313 13515143 9029533 4485610 46880881 MEMBER SHARES 1594182890 1594182890 X PART IV, LINE 2B: THE CREDIT UNION HOLDS ESCROWED FUNDS FOR THE PAYMENT OF PROPERTY TAXES AND INSURANCE PREMIUMS AS A SERVICE FOR MEMBERS WHO HAVE MORTGAGES WITH THE CREDIT UNION. A THIRD-PARTY MORTGAGE SERVICE PROVIDER HANDLES THE ESCROW PROCESSING ON BEHALF OF THE CREDIT UNION. PART X, LINE 2: THE CREDIT UNION IS A STATE-CHARTERED CREDIT UNION DESCRIBED IN INTERNAL REVENUE CODE (IRC) SECTION 501(C)(14). AS SUCH, THE CREDIT UNION IS EXEMPT FROM FEDERAL TAXATION OF INCOME DERIVED FROM THE PERFORMANCE OF ACTIVITIES THAT ARE IN FURTHERANCE OF ITS EXEMPT PURPOSES. HOWEVER, IRC SECTION 511 IMPOSES A TAX ON THE UNRELATED BUSINESS INCOME (AS DEFINED IN SECTION 512) DERIVED BY STATE-CHARTERED CREDIT UNIONS. THE SPECIFIC APPLICATION OF SECTION 512 TO THE VARIOUS ACTIVITIES CONDUCTED BY STATE-CHARTERED CREDIT UNIONS HAS BEEN AT ISSUE FOR MANY YEARS. THE INTERNAL REVENUE SERVICE (IRS) HAS ISSUED A SERIES OF TECHNICAL ADVICE MEMORANDA (TAM) TO A NUMBER OF STATE-CHARTERED CREDIT UNIONS LOCATED THROUGHOUT THE COUNTRY. IN THESE TAMS, THE IRS RULED CERTAIN PRODUCTS AND SERVICES TO BE SUBJECT TO TAXATION AS UNRELATED BUSINESS INCOME. IN LIGHT OF THE TAMS, THE CREDIT UNION HAS ASSESSED ITS ACTIVITIES AND ANY POTENTIAL FEDERAL INCOME TAX LIABILITY. IN THE OPINION OF MANAGEMENT, ANY LIABILITY ARISING FROM FEDERAL OR STATE TAXATION OF ACTIVITIES DEEMED TO BE UNRELATED TO ITS EXEMPT PURPOSES IS NOT EXPECTED TO HAVE A MATERIAL EFFECT ON THE CREDIT UNION'S FINANCIAL POSITION OR RESULTS OF OPERATIONS. ACCOUNTING PRINCIPLES PRESCRIBE A RECOGNITION THRESHOLD AND MEASUREMENT ATTRIBUTE FOR THE FINANCIAL STATEMENT RECOGNITION AND MEASUREMENT OF A TAX POSITION TAKEN OR EXPECTED TO BE TAKEN IN A TAX RETURN. THE CREDIT UNION ADOPTED THE PROVISIONS OUTLINED IN THIS GUIDANCE ON JANUARY 1, 2009. THE CREDIT UNION HAD NO UNRECOGNIZED TAX POSITIONS THAT REQUIRED ADJUSTMENT TO THE JANUARY 1, 2009, BEGINNING BALANCE OF UNDIVIDED EARNINGS. THE CREDIT UNION HAD NO UNRECOGNIZED TAX POSITIONS AT DECEMBER 31, 2019 OR 2018. IF ASSESSED, THE CREDIT UNION RECOGNIZES PENALTIES AND INTEREST ASSOCIATED WITH TAX MATTERS AS PART OF OPERATING EXPENSES. 1 NEWS TRIBUNE SCHOLARSHIP FOUNDATION 1950 S STATE ST TACOMA WA 98405 943082120 501(C)(3) 27083 SOUTH SOUND TOGETHER UNIVERSITY OF WASHINGTON FOUNDATION 1900 COMMERCE STREET BOX 358420 TACOMA WA 98402 943079432 501(C)(3) 14500 BUSINESS LEADERSHIP AWARDS/PROGRAM YMCA OF PIERCE AND KITSAP COUNTIES 4717 S 19TH ST STE 201 TACOMA WA 98405 910565562 501(C)(3) 10000 ANNUAL DONATION NORTHWEST CREDIT UNION ASSOCIATION 1800 INTERNATIONAL BLVD STE 350 SEATAC WA 98188 911649328 501(C)(6) 21510 ANNUAL DONATION - CU 4 KIDS AUCTION ECONOMIC DEVELOPMENT BOARD OF TACOMA-PIERCE COUNTY PO BOX 1555 TACOMA WA 98401 911040355 501(C)(6) 9000 SPONSORSHIP & COMPETE EVERY DAY FOREVER NATIONAL CREDIT UNION FOUNDATION 5710 MINERAL POINT ROAD PO BOX 431 MADISON WI 53705 391383650 501(C)(3) 20187 ANNUAL DONATION & FAIRSHARE CONTRIBUTION CREDIT UNION NATIONAL ASSOCIATION INC 99 M STREET SE NO 300 WASHINGTON DC 20003 237065623 501(C)(6) 100000 CREDIT UNION AWARENESS INITIATIVE 4 3 EDUCATIONAL ASSISTANCE - SCHOLARSHIPS 13 16000 PART I, LINE 2: THE DONATION AND SPONSORSHIP COMMITTEE MEETS APPROXIMATELY EVERY 45-60 DAYS TO REVIEW EACH REQUEST THAT IS SUBMITTED. AS THE REQUESTS ARE REVIEWED, THE ORGANIZATION DETERMINES THE FOLLOWING INFORMATION: WHO IS THE ORGANIZATION AND WHAT DO THEY DO? WHAT ARE THEY TRYING TO ACHIEVE WITH THEIR REQUEST? WHAT IS THEIR PURPOSE, AND DOES IT ALIGN WITH SOUND'S PUBLIC RESPONSIBILITY BELIEFS? IS THE SUPPORTING ORGANIZATION GOOD FOR THE LOCAL COMMUNITY, SOUND'S MEMBERSHIP, AND SOUND CREDIT UNION AS A WHOLE? WHERE ARE THEY LOCATED AND WHAT IS THEIR AREA OF FOCUS? HAS THE ORGANIZATION SUPPORTED THE CAUSE IN THE PAST? DOES THE DOLLAR AMOUNT REQUESTED FIT INTO THE BUDGET? WHEN APPROVED, THE ORGANIZATION WORKS WITH THE REQUESTING ORGANIZATION TO DISCUSS NEXT STEPS, INCLUDING PAYMENT, LOGO PLACEMENT, AND SOCIAL MEDIA. ONCE SCHOLARSHIP APPLICATIONS ARE SUBMITTED EACH COMMITTEE MEMBER SCORES THE APPLICATIONS. THOSE SCORES ARE THEN AVERAGED. THE COMMITTEE MEETS TO DISCUSS ALL APPLICATIONS AND DETERMINE THE TOP APPLICANTS THEY FEEL SHOULD BE SELECTED TO RECEIVE THE AWARDS. APPLICANTS PROVIDE THEIR SCHOOL'S INFORMATION AND SCHOLARSHIP CHECKS ARE MAILED DIRECTLY TO THE SCHOOL'S FINANCIAL AID OFFICE. PAYMENTS COME DIRECTLY FROM SOUND CREDIT UNION. X X 1 0 X X X 0 1 0 DONALD CLARK JR PRESIDENT/CEO 593720 0 178116 0 505683 0 562588 0 25558 0 1865665 0 0 0 TROY GARRY EVP/CHIEF FINANCIAL OFFICER 252000 0 63000 0 45278 0 25200 0 25558 0 411036 0 0 0 WENDY CLEVELAND EVP/CHIEF OPERATIONS OFFICER 252000 0 63000 0 36600 0 25200 0 16525 0 393325 0 0 0 ROBYN LACHANCE EVP/CHIEF STRATEGY OFFICER 199500 0 49875 0 38774 0 25200 0 9432 0 322781 0 0 0 LYMAN WILLIAMS SVP/CHIEF LENDING OFFICER 197478 0 49370 0 5400 0 22702 0 25558 0 300508 0 0 0 KIMBERLY MAPES SVP/CHIEF EMPLOYEE ENGAGEMENT OFFICE 171419 0 47457 0 5295 0 20175 0 9432 0 253778 0 0 0 CHARLENE HENSON SVP/CHIEF RETAIL OFFICER 168000 0 42000 0 7637 0 19587 0 9432 0 246656 0 0 0 RYAN HORAN BUSINESS LOAN OFFICER 91672 0 1100 0 74892 0 15090 0 16525 0 199279 0 0 0 ANNA ALBERTIN VP/MORTGAGE LENDING 138923 0 21888 0 912 0 14555 0 25558 0 201836 0 0 0 JASON MCDOUGAL BUSINESS INTELLIGENCE MANAGER 125895 0 13664 0 8424 0 13319 0 25558 0 186860 0 0 0 SANDY LOPEZ VP/CONTROLLER 121941 0 18339 0 4856 0 13062 0 17838 0 176036 0 0 0 SARAH MEIKLE MORTGAGE LOAN OFFICER PRODUCTION SUP 54834 0 1050 0 75863 0 11857 0 16525 0 160129 0 0 0 PART I, LINE 1A FIRST CLASS TRAVEL: FIRST CLASS TRAVEL IS PROVIDED FOR BOARD OF DIRECTORS MEMBERS FOR FLIGHTS OVER A CERTAIN AMOUNT OF HOURS. TRAVEL FOR COMPANIONS: INCLUDES SPOUSAL TRAVEL FOR BOARD OF DIRECTORS MEMBERS, ALL OF WHICH IS TAXABLE COMPENSATION. PART I, LINE 4B THE CREDIT UNION HAS ENTERED INTO ONE 457(F) SUPPLEMENTAL RETIREMENT BENEFIT AGREEMENT WITH DON CLARK JR. IN 2019, DON ACCRUED AN AMOUNT OF $537,388. IN 2019, TROY GARRY, WENDY CLEVELAND, KIMBERLY MAPES, LYMAN WILLIAMS, ROBYN LACHANCE, AND CHARLENE HENSON PARTICIPATED IN A SPLIT DOLLAR LOAN PLAN. CHARLENE HENSON SVP/CHIEF RETAIL OFFICER NON-RECOURSE, SPLIT DOLLAR LOAN X 1250000 1248341 0 1 1 KIMBERLY MAPES SVP/CHIEF EMPLOYEE ENGAGEMENT OFFICER NON-RECOURSE, SPLIT DOLLAR LOAN X 2050000 2047279 0 1 1 LYMAN WILLIAMS SVP/CHIEF LENDING OFFICER NON-RECOURSE, SPLIT DOLLAR LOAN X 1500000 1498009 0 1 1 ROBYN LACHANCE EVP/CHIEF STRATEGY OFFICER NON-RECOURSE, SPLIT DOLLAR LOAN X 2160000 2153574 0 1 1 TROY GARRY EVP/CHIEF FINANCIAL OFFICER NON-RECOURSE, SPLIT DOLLAR LOAN X 2200000 2197799 0 1 1 WENDY CLEVELAND EVP/CHIEF OPERATIONS OFFICER NON-RECOURSE, SPLIT DOLLAR LOAN X 2150000 2147147 0 1 1 11292149 FORM 990, PART VI, SECTION A, LINE 6 THE CREDIT UNION HAS 134,737 MEMBERS AS OF DECEMBER 31, 2019. FORM 990, PART VI, SECTION A, LINE 7A THE CREDIT UNION'S MEMBERS HAVE THE RIGHT TO ELECT ONE OR MORE MEMBERS OF THE GOVERNING BODY, WHETHER PERIODICALLY, AS VACANCIES ARISE, OR OTHERWISE. FORM 990, PART VI, SECTION A, LINE 7B MEMBERS OF THE CREDIT UNION HAVE THE RIGHT TO APPROVE THE GOVERNING BODY'S ELECTION AND REMOVAL ANNUALLY. ADDITIONALLY, MEMBERS VOTE ON ITEMS BROUGHT THROUGH A SPECIAL MEETING OF MEMBERS, SUCH AS MERGERS AND REMOVAL OF OFFICERS AND DIRECTORS. FORM 990, PART VI, SECTION B, LINE 11B THE FORM 990 IS PROVIDED TO THE BOARD OF DIRECTORS WHO REVIEW THE FORM AND APPLICABLE SCHEDULES PRIOR TO THE RETURN'S FILING WITH THE IRS. FORM 990, PART VI, SECTION B, LINE 12C EMPLOYEES SIGN A STATEMENT REQUIRING THAT THEY MUST DISCLOSE TO THE PRESIDENT & CEO ANY ACTUAL, POTENTIAL, OR PERCEIVED CONFLICTS OF INTEREST BEFORE BEING HIRED. DIRECTORS AND VOLUNTEERS SIGN A "CODE OF ETHICS ACKNOWLEDGEMENT" THAT STATES THEY WILL NOT BE INVOLVED IN SITUATIONS THAT RESULT IN OR COULD BE PERCEIVED TO BE A CONFLICT OF INTEREST. THEY MUST ALSO EXCUSE THEMSELVES FROM ANY DISCUSSIONS OR PARTICIPATION IN DECISIONS INVOLVING INSTANCES IN WHICH A CONFLICT OF INTEREST EXISTS OR MAY EXIST. THE POLICY MANUAL HAS THREE SECTIONS IN WHICH CONFLICTS OF INTEREST ARE STATED AND THE BOARD APPROVES THE POLICY MANUAL ON AN ANNUAL BASIS. BOTH THE CEO & EVP MONITOR ALL STAFF AND VOLUNTEER ACCOUNTS. IN ADDITION, DURING OUR CERTIFIED AUDIT, ALL STAFF AND VOLUNTEER ACCOUNTS, OR A SAMPLING, ARE REVIEWED FOR POTENTIAL CONFLICTS OF INTEREST. NO DIRECTOR, COMMITTEE MEMBER, OR EMPLOYEE OF THE CREDIT UNION MAY HAVE A PECUNIARY INTEREST IN ANY CONTRACT OR TRANSACTION WITH THE CREDIT UNION UNLESS THIS INTEREST IS DISCLOSED AND MADE KNOWN TO THE BOARD OF DIRECTORS. NO DIRECTOR OR COMMITTEE MEMBER OF THE CREDIT UNION WILL PARTICIPATE IN THE DELIBERATION OF ANY QUESTION AFFECTING THEIR OWN PECUNIARY INTEREST. SUCH DIRECTOR OR COMMITTEE MEMBER WILL WITHDRAW FROM THE DELIBERATION AND DECISION UPON SUCH INTEREST. FORM 990, PART VI, SECTION B, LINE 15 LINE 15A, COMPENSATION PROCESS FOR TOP OFFICIAL: THE EMPLOYEE BENEFITS COMMITTEE, WHICH IS COMPRISED OF 3 BOARD MEMBERS, REVIEWS LOCAL SURVEYS, INCLUDING THE ANNUAL MILLIMAN NORTHWEST FINANCIAL INDUSTRY SALARY SURVEY TO DEVELOP A RECOMMENDATION FOR THE BOARD. THE BOARD REVIEWS THE COMMITTEE'S RECOMMENDATION AND APPROVES THE CEO'S COMPENSATION. THIS PROCESS WAS LAST DONE IN 2018 IN DETERMINING THE CEO'S COMPENSATION FOR 2019. LINE 15B, COMPENSATION PROCESS FOR OFFICERS: OTHER OFFICER AND KEY EMPLOYEE COMPENSATION IS DETERMINED BY THE CEO, BASED ON A REVIEW OF LOCAL SALARY SURVEY INFORMATION, AND BECOMES A PART OF THE COMPENSATION RECOMMENDATION DURING THE BUDGET PROCESS. FORM 990, PART VI, SECTION C, LINE 19 THE CREDIT UNION'S BYLAWS AND LEGAL DOCUMENTS, FINANCIAL STATEMENTS AND ANNUAL REPORT, THAT MEMBERS HAVE THE RIGHT TO VIEW, ARE AVAILABLE UPON REQUEST. THE REQUEST MUST BE IN WRITTEN FORM. SOUND FINANCIAL GROUP INC PO BOX 1595 TACOMA WA 98401 911263213 INSURANCE WA SOUND CREDIT UNION C -185 9349 1.00000 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0