2018-11-14T12:52:23-06:00 2017-12-31 381357951 PLANTE & MORAN PLLC 511 RENAISSANCE DRIVE SUITE 120 ST JOSEPH MI 49085 990 2017-01-01 381231023 HONOR CREDIT UNION HONO 2699836357 8385 EDGEWOOD DRIVE BERRIEN SPRINGS MI 49103 SCOTT MCFARLAND CFO 2699836357 2018-11-13 1 KENLEY PENNER CPA P00740260 2699828000 2018-11-12 67.59.56.31 2018-11-13 11:02:44 ES P DA39A3EE5E6B4B0D3255BFEF95601890AFD80709 DEC087A61A44975D60E0F3E4C9DD10AC7E40B18D 2017 2019-02-21 02:37:17Z SCOTT MCFARLAND 8385 EDGEWOOD DRIVE BERRIEN SPRINGS MI 49103 76816054 0 X WWW.HONORCU.COM X 1934 MI TO PROVIDE FINANCIAL SERVICES TO RESIDENTS OF THE STATE OF MICHIGAN. 9 9 384 9 102006 31946 0 0 41605926 46993453 1572557 2305561 37537 37512 43216020 49336526 0 0 0 0 17402548 19476125 0 0 0 20256294 21446424 37658842 40922549 5557178 8413977 712966023 852520992 636670547 757330790 76295476 95190202 PROVIDING SOLUTIONS FOR FINANCIAL SUCCESS. 0 0 SERVED 77,421 MEMBERS BY OFFERING LOANS, DEPOSITS AND VARIOUS OTHER FINANCIAL SOLUTIONS TO ENSURE FINANCIAL SUCCESS TO OUR MEMBERSHIP. 0 0 0 0 0 0 0 1 0 1 1 0 0 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 12596 0 1 384 1 1 1 0 0 0 0 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 SHARI WEBER 2699836357 8385 EDGEWOOD DRIVE BERRIEN SPRINGS MI 49103 MIMI ELWELL BOARD CHAIRMAN 2.00 0.00 X X 0 0 0 LARRY OLSON BOARD VICE-CHAIRMAN 2.00 0.00 X X 0 0 0 BRIAN BROWN SECRETARY 2.00 0.00 X X 0 0 0 MARK FRY TREASURER 2.00 0.00 X X 0 0 0 RICHARD ATWELL DIRECTOR 2.00 0.00 X 0 0 0 RANDY O'NEIL DIRECTOR 2.00 0.00 X 0 0 0 RONALD GRIESINGER DIRECTOR 2.00 0.00 X 0 0 0 SCOTT CLEVELAND DIRECTOR 2.00 0.00 X 0 0 0 DAVID RHOUTSONG DIRECTOR 2.00 0.00 X 0 0 0 GIL GUZMAN PART YEAR DIRECTOR 2.00 0.00 X 0 0 0 SCOTT MCFARLAND CEO 40.00 0.00 X 485323 0 78411 SHARI WEBER CFO 40.00 0.00 X 243985 0 68535 AMANDA CRAIG COO 40.00 0.00 X 182532 0 39049 KENT FIGY CLO 40.00 0.00 X 186612 0 45635 MARY UNRUH VP OF ACCT. & OPER. EFFIC. 40.00 0.00 X 166014 0 55508 RON LAUREN PRESIDENT, NORTHERN MKT. 40.00 0.00 X 154956 0 30623 DUSTIN JANKOVIAK MORTGAGE LOAN OFFICER 40.00 0.00 X 147373 0 25090 1566795 0 342851 15 0 1 0 EC MOORE OF BERRIEN COUNTY 117 W FERRY BERRIEN SPRINGS MI 49103 CONSTRUCTION 2606688 CU ANSWERS 6000 28TH ST SE GRAND RAPIDS MI 49546 DATA PROCESSING 1863536 VANTIV HOLDING LLC 8500 GOVERNORS HILL DR SYMMES TOWNSHIP OH 45249 ELECTRONIC PAYMENT PROCESSING 1495619 SECANT TECHNOLOGIES INC 6395 TECHNOLOGY AVE STE A KALAMAZOO MI 49009 TECHNOLOGY SERVICES 649584 AT&T PO BOX 5019 CAROL STREAM IL 60197 COMMUNICATION 600538 27 LOAN INTEREST INCOME 522100 28897021 28897021 FEES AND CHARGES 522100 18096432 17994426 102006 46993453 2310811 2310811 37512 0 37512 37512 37512 27474278 27469192 10336 5086 -10336 -5250 -5250 49336526 46891447 102006 2343073 876254 12318668 176653 4919459 1185091 436578 86110 73011 249071 1438525 1190658 1539216 1519555 224592 215714 809756 1780051 280501 FEDERAL INCOME TAXES 43280 PROVISION FOR LOAN LOSS 3025610 CREDIT AND DEBIT CARD F 2718490 INTEREST PAID ON MEMBER 2506517 3309189 40922549 7633549 10642971 23661908 19920985 282816 557356723 681232046 880404 949846 45095945 10836566 29980963 34259379 77969367 83942542 15483109 21290407 712966023 852520992 3991778 6243722 909162 1216251 45394000 45394000 586375607 704476817 636670547 757330790 X 0 0 0 0 76295476 95190202 76295476 95190202 712966023 852520992 X 8413977 -303772 10784521 X X 0 1 X 1 0 0 1 X 5432356 5432356 27000333 4020572 22979761 11171811 6815994 4355817 1491445 1491445 34259379 U.S. GOVERNMENT AND FEDERAL AGENCY SECURITIES 39557459 F MORTGAGE-BACKED SECURITIES 21813678 F NEGOTIABLE CERTIFICATES OF DEPOSIT 10740348 F STATE AND MUNICIPAL BONDS 3542778 F COLLATERALIZED MORTGAGE OBLIGATIONS 5813149 F CORPORATE BONDS 2475130 F 83942542 MEMBERS' SHARES AND SAVINGS 704476817 704476817 X 49694618 278871 278871 49415747 -79221 -79221 49336526 41001770 79221 79221 40922549 0 40922549 PART IV, LINE 2B: THE CREDIT UNION HOLDS AMOUNTS IN ESCROW ACCOUNTS FOR REAL ESTATE TAXES AND HOME INSURANCE RELATED TO HOME MORTGAGE LOANS. PART X, LINE 2: THE CREDIT UNION IS EXEMPT, BY STATUTE, FROM FEDERAL AND STATE INCOME TAXES. HOWEVER, THE CREDIT UNION MAY BE SUBJECT TO UNRELATED BUSINESS INCOME TAX. THE NET UNRELATED BUSINESS INCOME TAX IS IMMATERIAL TO THE FINANCIAL STATEMENTS AS A WHOLE. ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA REQUIRE MANAGEMENT TO EVALUATE TAX POSITIONS TAKEN BY THE CREDIT UNION AND RECOGNIZE A TAX LIABILITY IF THE CREDIT UNION HAS TAKEN AN UNCERTAIN POSITION THAT MORE LIKELY THAN NOT WOULD NOT BE SUSTAINED UPON EXAMINATION BY THE IRS OR OTHER APPLICABLE TAXING AUTHORITIES. MANAGEMENT HAS ANALYZED THE TAX POSITIONS TAKEN BY THE CREDIT UNION AND HAS CONCLUDED THAT AS OF DECEMBER 31, 2017 AND 2016, THERE ARE NO UNCERTAIN POSITIONS TAKEN OR EXPECTED TO BE TAKEN THAT WOULD REQUIRE RECOGNITION OF A LIABILITY OR DISCLOSURE IN THE FINANCIAL STATEMENTS. THE CREDIT UNION IS SUBJECT TO ROUTINE AUDITS BY TAXING JURISDICTIONS; HOWEVER, THERE ARE CURRENTLY NO AUDITS FOR ANY TAX PERIODS IN PROGRESS. PART XI, LINE 2D - OTHER ADJUSTMENTS: BARGAIN PURCHASE GAIN 278,871. PART XI, LINE 4B - OTHER ADJUSTMENTS: LOSS ON SALE OF FORECLOSED ASSETS -79,221. PART XII, LINE 2D - OTHER ADJUSTMENTS: LOSS ON SALE OF FORECLOSED ASSETS 79,221. X 0 1 0 SCOTT MCFARLAND CEO 385820 0 82677 0 16826 0 65612 0 12799 0 563734 0 0 0 SHARI WEBER CFO 227673 0 16312 0 0 0 55795 0 12740 0 312520 0 0 0 AMANDA CRAIG COO 175000 0 7532 0 0 0 37333 0 1716 0 221581 0 0 0 KENT FIGY CLO 175108 0 11504 0 0 0 33253 0 12382 0 232247 0 0 0 MARY UNRUH VP OF ACCT. & OPER. EFFIC. 141370 0 21345 0 3299 0 49334 0 6174 0 221522 0 0 0 RON LAUREN PRESIDENT, NORTHERN MKT. 133412 0 15265 0 6279 0 29228 0 1395 0 185579 0 0 0 DUSTIN JANKOVIAK MORTGAGE LOAN OFFICER 147373 0 0 0 0 0 13776 0 11314 0 172463 0 0 0 PART I, LINE 3 COMPENSATION FOR THE CEO, OTHER OFFICERS, AND KEY EMPLOYEES IS APPROVED BY BOTH HUMAN RESOURCES AND THE BOARD OF DIRECTORS. PART I, LINE 4B THE CREDIT UNION EXECUTIVES PARTICIPATE IN A 457F PLAN. SHARI WEBER, SCOTT MCFARLAND, KENT FIGY, MARY UNRUH, AND RON LAUREN WERE THE PARTICIPANTS IN THE PLAN. FORM 990, PART VI, SECTION A, LINE 6 THE CREDIT UNION CURRENTLY HAS APPROXIMATELY 77,000 MEMBERS. FORM 990, PART VI, SECTION A, LINE 7A THE MEMBERS OF THE CREDIT UNION ARE RESPONSIBLE FOR ELECTING THE BOARD OF DIRECTORS. FORM 990, PART VI, SECTION A, LINE 7B THE MEMBERS OF THE CREDIT UNION MUST APPROVE A MERGER INTO ANOTHER CREDIT UNION. ALL OTHER DECISIONS ARE MADE BY THE BOARD OF DIRECTORS. FORM 990, PART VI, SECTION B, LINE 11B BEFORE THE 990 WAS FILED, AN ELECTRONIC COPY OF THE DRAFT WAS SENT TO THE BOARD OF DIRECTORS AND VP OF FINANCE, VIA EMAIL, FOR THEIR REVIEW. ALL OF THE BOARD MEMBERS WERE GIVEN THE OPPORTUNITY TO CONTACT THE CREDIT UNION'S MANAGEMENT WITH ANY QUESTIONS OR CONCERNS THEY HAD REGARDING THE FORM 990 RETURN. FORM 990, PART VI, SECTION B, LINE 12C AUDIT LINK IS A SERVICE WE USE TO MONITOR ALL EMPLOYEE AND BOARD MEMBER ACCOUNTS. ACCOUNTS ARE MONITORED WEEKLY BY AUDIT LINK AND A REPORT IS SENT TO HUMAN RESOURCES WITH THE FINDINGS, HUMAN RESOURCES DOES A REVIEW OF ACCOUNTS AND INVESTIGATES IF NEEDED. COMPLIANCE WITH THE CONFLICT OF INTEREST POLICY IS MONITORED THROUGH DISCUSSIONS AT THE BOARD LEVEL. IF A CONFLICT ARISES THE AFFECTED BOARD MEMBER WILL ABSTAIN FROM VOTING. FORM 990, PART VI, SECTION B, LINE 15 THE BOARD OF DIRECTORS IS AWARE OF THE USE OF THE COMP EASE SOFTWARE FOR ASSISTING WITH COMPENSATION FOR ALL EMPLOYEES. COMPENSATION FOR THE CEO, OTHER OFFICERS, AND KEY EMPLOYEES IS APPROVED BY BOTH HUMAN RESOURCES AND THE CEO OR THE BOARD OF DIRECTORS. THIS PROCESS WAS LAST COMPLETED DURING 2017. FORM 990, PART VI, SECTION C, LINE 19 GOVERNING DOCUMENTS AND FINANCIAL STATEMENTS ARE AVAILABLE UPON REQUEST. FORM 990, PART XI, LINE 9: ACQUIRED EQUITY ON BUSINESS ACQUISITION 10,505,650. BARGAIN PURCHASE GAIN 278,871. FORM 990, PART XII, LINE 2C: THE BOARD OF DIRECTORS HAS ESTABLISHED THE SUPERVISORY COMMITTEE WHICH IS RESPONSIBLE FOR THE OVERSIGHT OF THE AUDIT REVIEW AND THE SELECTION OF AN INDEPENDENT AUDITOR. THE SUPERVISORY COMMITTEE APPROVES AN INDEPENDENT AUDITOR EACH YEAR AND MEETS TO REVIEW THE INDEPENDENT AUDITOR'S REPORT AFTER THE AUDIT IS COMPLETE. THE PROCESS HAS NOT CHANGED FROM THE PRIOR YEAR. FORM 990, PART X, LINE 5 AND SCHEDULE L: SCHEDULE L IS NOT REQUIRED FOR LOANS RECEIVABLE BALANCES ON FORM 990, PART X, LINE 5 IF THE LOANS ARE MADE BY THE CREDIT UNION TO THE DIRECTORS, OFFICERS, AND KEY EMPLOYEES ON THE SAME TERMS OFFERED TO OTHER MEMBERS OF THE CREDIT UNION. THEREFORE, THE CREDIT UNION HAS INCLUDED APPROXIMATELY $2,697,000 AND $1,687,000 OF RECEIVABLES FROM CURRENT OFFICERS, DIRECTORS, TRUSTEES, KEY EMPLOYEES, AND HIGHEST COMPENSATED EMPLOYEES FOR 2017 AND 2016, RESPECTIVELY, WITHIN FORM 990, PART X, LINE 7. FORM 990, PART XII, LINE 9 AND SCHEDULE D, PART XI, LINE 2D: ON APRIL 1, 2017 THE CREDIT UNION ACQUIRED ALL OF BATTLE CREEK AREA FEDERAL CREDIT UNION'S (BATTLE CREEK) ASSETS AND LIABILITIES. ON OCTOBER 1, 2017 THE CREDIT UNION ACQUIRED ALL OF POST CREDIT UNION'S (POST) ASSETS AND LIABILITIES. THE ASSUMED ASSETS AND LIABILITIES WERE RECORDED AT FAIR VALUE. THE RESULTS OF BATTLE CREEK AND POST'S OPERATIONS HAVE BEEN INCLUDED IN THE CREDIT UNION'S FINANCIAL STATEMENTS SINCE THE DATE OF ACQUISITION. NO CONSIDERATION WAS PAID BY THE CREDIT UNION FOR EITHER ACQUISITION. THE FAIR VALUE OF THE ASSETS ACQUIRED IN THE BATTLE CREEK MERGER WAS GREATER THAN THE FAIR VALUE OF THE LIABILITIES AND RESULTED IN A BARGAIN PURCHASE GAIN OF $197,219 (NET OF $3,238,121 RECORDED AS AN INCREASE IN MEMBERS' EQUITY FROM ACQUISITION). THE FAIR VALUE OF THE ASSETS ACQUIRED IN THE POST MERGER WAS GREATER THAN THE FAIR VALUE OF THE LIABILITIES AND RESULTED IN A BARGAIN PURCHASE GAIN OF $81,652 (NET OF $7,267,529 RECORDED AS AN INCREASE IN MEMBERS' EQUITY FROM ACQUISITION).