2012-11-05T16:41:43-06:00 2011-12-31 410746749 CLIFTONLARSONALLEN LLP 20 E THOMAS RD STE 2300 PHOENIX AZ 85012 990 2011-01-01 910712539 WHATCOM EDUCATIONAL CREDIT UNION WHAT 3606761168 600 EAST HOLLY STREET BELLINGHAM WA 98227 WAYNE LANGEI 3606761168 2012-10-31 1 PHIL MCCOLLUM CPA P00129716 6022662248 2011 2016-02-24 21:20:13Z WAYNE LANGEI 600 EAST HOLLY STREET BELLINGHAM WA 98227 50110804 0 X WWW.WECU.COM X 1936 WA IT IS THE MISSION OF WHATCOM EDUCATIONAL CREDIT UNION TO PROVIDE THE MEANS FOR MEMBERS TO ACHIEVE THEIR DREAMS. 9 9 295 4 0 0 0 0 47851535 49625036 1104396 375246 0 0 48955931 50000282 0 0 0 0 15201361 16339468 0 0 0 24062927 20398770 39264288 36738238 9691643 13262044 706976500 776647224 580879054 637304152 126097446 139343072 X WHATCOM EDUCATIONAL CREDIT UNION (WECU) IS A MEMBER-OWNED FINANCIAL COOPERATIVE WHERE MEMBERS ARE ENCOURAGED TO SAVE AND BORROW RESPONSIBLY AT FAIR AND COMPETITIVE RATES, IMPROVING THEIR FINANCIAL WELL-BEING AND STANDARD OF LIVING. THIS STATE-CHARTERED CREDIT UNION IS A MEMBER OF THE NATIONAL CREDIT UNION ADMINISTRATION SHARE INSURANCE FUND, AND IS REGULATED BY THE NATIONAL CREDIT UNION ASSOCIATION, AND THE STATE OF WASHINGTON DEPARTMENT OF FINANCIAL INSTITUTIONS - DIVISION OF CREDIT UNIONS. WECU'S MAIN PRODUCTS ARE CONSUMER LOANS, REAL ESTATE LOANS AND COMMERCIAL LOANS TO MEMBERS, WHICH ARE PRIMARILY FUNDED BY DEPOSITS FROM MEMBERS. FINANCIAL EDUCATION AND COMMUNITY SERVICE ARE ALSO AN INTEGRAL PART OF WECU'S OPERATIONS AND SPIRIT OF SERVICE. 0 0 CREDIT CARD LOANS: WECU OFFERS THREE TYPES OF CREDIT CARDS - CLASSIC, PLATINUM, AND BUSINESS. EACH CARD INCLUDES THE FOLLOWING: 1% CASH BACK ON PURCHASES, NO ANNUAL FEE, LOW FIXED ANNUAL PERCENTAGE RATE (APR), 25 DAY GRACE PERIOD, LOW MONTHLY PAYMENTS, TRAVEL ACCIDENT INSURANCE WHEN YOU PURCHASE TRAVEL TICKETS WITH YOUR WECU VISA, SECURE ONLINE SHOPPING WITH VERIFIED BY VISA, OPTIONAL PAYMENT PROTECTION, 24 HOUR ACCESS WITH E-MAX ONLINE BANKING AND TELE-MAX AUDIO RESPONSE, AND LOCAL SERVICE YOU CAN TRUST. WECU STRIVES TO EDUCATE YOUTH TO BE FINANCIALLY RESPONSIBLE. IN 2001, WECU LAUNCHED A STUDENT VISA PROGRAM WITH OUR CLASSIC VISA CARD. THE GOAL OF OUR STUDENT VISA PROGRAM IS NOT TO PROMOTE SPENDING, BUT RATHER TO PROVIDE KNOWLEDGE AND AN OPPORTUNITY FOR OUR YOUNG MEMBERS TO LEARN ABOUT MONEY MANAGEMENT AND MAINTAINING GOOD CREDIT. OUR PROGRAM IS DESIGNED FOR MEMBERS 16 AND 17 YEARS OF AGE, AND BEGINS WITH AN EDUCATIONAL SEMINAR. STUDENTS ARE REQUIRED TO ATTEND THE SEMINAR, AND WE STRONGLY ENCOURAGE LEGAL GUARDIANS OR PARENT(S) TO ATTEND. THE STUDENT VISA SEMINAR COVERS MANY TOPICS, FROM THE DEFINITION OF CREDIT, TO CREDIT SCORES, HOW LOANS WORK, MONEY MANAGEMENT SKILLS, THE BENEFIT OF A VISA CARD, AND WHAT TO DO IF YOUR CARD IS LOST OR STOLEN. UPON SUCCESSFUL COMPLETION OF THE STUDENT VISA SEMINAR, AND EITHER A COMPLETED APPLICATION WITH PROOF OF INCOME OR PARENT/LEGAL GUARDIAN AS CO-BORROWER, STUDENT MEMBERS WILL BE ISSUED A $250 STUDENT VISA. THE CARD IS GOOD UNTIL AGE 21. HOWEVER, IF THE LOAN IS IN GOOD STANDING AT THE AGE OF 18, STUDENTS CAN APPLY FOR A $500 CLASSIC VISA BY FILLING OUT A NEW APPLICATION WITH PROOF OF INCOME OR PARENT/LEGAL GUARDIAN AS CO-BORROWER. THIS PROGRAM HAS BEEN VERY SUCCESSFUL, AND AS OF THE END OF 2011, WE HAVE 107 STUDENT VISA ACCOUNTS.WECU HAS APPROXIMATELY A 27% MEMBER PENETRATION IN OUR CREDIT CARD PROGRAM. AT YEAR-END, WE HAD OVER 1,818 NEW VISA ACCOUNTS FOR OUR MEMBERS, WITH NEW CREDIT LIMITS TOTALING OVER $5.8 MILLION. OTHER CONSUMER LOANS: ALONG WITH CREDIT CARD LOANS, WECU OFFERS AUTO, BOAT, RV, PERSONAL, SECURED, TIMELINE, AND OTHER CONSUMER LOANS. WE HAVE VERY COMPETITIVE RATES, AND OFTEN FUND VERY SMALL LOANS THAT OTHER FINANCIAL INSTITUTIONS WOULD NOT. IN THIS CAPACITY, WECU FILLS A CRITICAL ROLE IN THE MICRO-LENDING ECONOMY. IN 2011, WE ISSUED 3,359 CONSUMER LOANS (NOT INCLUDING CREDIT CARDS) TO OUR MEMBERS, TOTALING AROUND $33 MILLION. WECU ALSO PROVIDES ACCESS TO THE BALANCE FINANCIAL FITNESS PROGRAM FREE OF CHARGE TO MEMBERS. PROFESSIONAL FINANCIAL COUNSELORS AT BALANCE PROVIDE DIRECTION AND SUPPORT TO ANY OF OUR MEMBERS WHO NEED HELP MANAGING THEIR DEBT AND GETTING THEIR PERSONAL FINANCES BACK ON TRACK. IN 2011, OVER 850 OF OUR MEMBERS USED THIS SERVICE. REAL ESTATE LOANS: WECU OFFERS RESIDENTIAL REAL ESTATE LOANS WITH VERY COMPETITIVE RATES AND LOW FEES, MEMBER EDUCATION SEMINARS RELATED TO BUYING A HOME, AND HOME $TART PROGRAM LOANS THROUGH THE FEDERAL HOME LOAN BANK OF SEATTLE. DURING 2011, WE FUNDED APPROXIMATELY 740 RESIDENTIAL FIRST MORTGAGES TO OUR MEMBERS. AT THE END OF 2011, WECU HAD OVER 2,129 RESIDENTIAL FIRST MORTGAGE LOANS OUTSTANDING WHICH EQUATES TO A HOUSEHOLD PENETRATION OF ABOUT 4.3% IN OUR MEMBERSHIP PORTFOLIO. HOWEVER, AS OF THE END OF 2011, WE WERE ALSO SERVICING AN ADDITIONAL 1,472 IN SOLD RESIDENTIAL FIRST MORTGAGES TO OUR MEMBERS, INCREASING OUR OVERALL REAL ESTATE PENETRATION TO ABOUT 7.4%. THE AVERAGE BALANCE OF RESIDENTIAL FIRST MORTGAGE LOANS BEING SERVICED BY WECU IS APPROXIMATELY $156,242. IN ADDITION, WECU PARTICIPATES IN HOME $TART. OFTEN REFERRED TO AS THE "AMERICAN DREAM" PROGRAM, HOME $TART IS A JOINT PROGRAM THROUGH THE FEDERAL HOME LOAN BANK OF SEATTLE, AND IT PROMOTES HOME OWNERSHIP BY HELPING FIRST-TIME HOME BUYERS EARNING UP TO 80% OF THE AREA'S MEDIAN INCOME TO PURCHASE A HOME. THE HOME $TART PROGRAM PROVIDES $3.00 FOR EVERY $1.00 A FAMILY CONTRIBUTES, UP TO $5,000. HOME $TART GRANTS MAY BE USED FOR DOWN PAYMENTS, CLOSING COSTS, OR REHABILITATION OF AN OWNER OCCUPIED HOUSING UNIT, TO BE USED AS THE HOUSEHOLD'S PRIMARY RESIDENCE. GRANTS MAY BE USED IN COMBINATION WITH FUNDS FROM OTHER SOURCES. OUR NEXT YEAR'S GOAL IS TO SURPASS THE NUMBER OF FIRST-TIME HOME BUYERS BY PROVIDING EDUCATIONAL SEMINARS, INDIVIDUAL COUNSELING AS WELL AS CLOSING COST ASSISTANCE - THUS ENABLING OUR NEIGHBORHOOD FAMILIES TO REALIZE THEIR AMERICAN DREAM. 0 0 1 0 0 0 0 0 0 1 0 0 0 1 0 1 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 1 1 0 0 0 0 0 0 0 0 0 1 23319 0 1 295 1 0 0 0 0 0 0 0 0 X 9 9 1 0 0 0 1 1 1 1 1 0 1 1 1 1 1 1 1 1 1 1 0 X JEFF DYKSTRA VPCFO 3607567649 600 E HOLLY STREET BELLINGHAM WA 982279750 KRISTI LEWIS TYRAN 4.00 X 0 0 0 CATHIE OBERG 4.00 X X 0 0 0 JAMES WALSH 4.00 X X 700 0 0 DAVID WASCHKE 4.00 X 997 0 0 BRUCE BURPEE 4.00 X 0 0 0 ASHOK KHANNA 4.00 X 1212 0 0 PHILIP ISLE 4.00 X X 3404 0 0 DALE ZENDER 4.00 X 1165 0 0 HARTWELL BRESSLER 4.00 X 0 0 0 WAYNE LANGEI 59.00 X 1292480 0 37208 JEFF DYKSTRA 62.00 X 138708 0 27727 KATHLEEN GAVIN 46.00 X 289838 0 30640 JENNIFER KUTCHER 64.00 X 144108 0 22327 ROBERT LANGEI 59.00 X 144119 0 22327 LISA LANGEI 50.00 X 133710 0 24095 COLIN NAYLOR 60.00 X 133109 0 27095 KENT BOUMA 45.00 X 120013 0 25627 2403563 0 217046 9 0 1 0 JACK HENRY & ASSOCIATES (JHA) P O BOX 807 MONETT MO 65708 VISA CARD PROCESSOR 768075 BIT LLC 710 SW 34TH ST RENTON WA 98057 STATEMENT PROCESSING AND POSTAGE 643389 HARLAND FINANCIAL SOLUTIONS PO BOX 535120 ATLANTA GA 30353 COMPUTER SOFTWARE PROVIDER AND VENDOR 413493 DIEBOLD INC PO BOX 643543 PITTSBURGH PA 15364 SECURITY SYSTEMS EQUIPMENT AND MAINTENAN 369195 PEARSON CONSTRUCTION CORP 2034 FRANKLIN ST BELLINGHAM WA 98225 CONSTRUCTION COMPANY 333539 17 PROGRAM SERVICE REVENU 522100 49625036 49625036 49625036 485768 485768 110522 -110522 -110522 -110522 50000282 50000282 0 0 2620609 8881610 1629416 2384070 823763 268453 174000 213727 319747 935090 788968 178997 108880 3119208 1398424 1448178 OTHER OPERATING EXPENSE 6915582 PROVISION FOR LOAN LOSS 4529516 36738238 23528463 98923841 582610747 599292402 40890201 12783349 28390397 28106852 3827557 3811145 57635800 35659900 10983536 10853084 706976500 776647224 4861929 5296960 855740 902640 7961598 5533026 567199787 625571526 580879054 637304152 X 0 0 0 0 126097446 139343072 126097446 139343072 706976500 776647224 X 13262044 -16418 X X 0 1 1 X 0 6875 6875 1 NORTHWEST CREDIT UNION ASSOCIATION 33301 9TH AVE S STE 200 FEDERAL WAY WA 98003 910460483 6875 CREDIT UNION LEGISLATIVE ACTION COUNCIL 601 PENNSYLVANIA AVENUE NW SOUTH BU WASHINGTON DC 200042601 521154361 5488 ORGANIZATIONS DIRECT AND INDIRECT POLITICAL CAMPAIGN ACTIVITIES: PART I-A, LINE 1: CONTRIBUTIONS ARE MADE TO A POLITICAL ACTION COMMITTEE (PAC) AS PART OF WECU'S NORTHWEST CREDIT UNION ASSOCIATION (NWCUA) ANNUAL DUES. THE TOTAL CHECK IS PAYABLE TO NWCUA, AND THE PAC PIECE IS DISTRIBUTED BY THE NWCUA TO THE CREDIT UNION LEGISLATIVE ACTION FUND (CULAF), WHICH IS OUR WASHINGTON STATE PAC. CULAF'S FUNDS ARE RAISED FROM THE DUES INVOICES AS PART OF A VOLUNTARY 'FAIR-SHARE' CONTRIBUTION LISTED FOR EACH STATE-CHARTERED CREDIT UNION. NOTE: IN 2011, WECU COLLECTED $5,488.00 FROM EMPLOYEES IN CONTRIBUTIONS DESIGNATED FOR THE CREDIT UNION LEGISLATIVE ACTION COUNCIL (CULAC), WHICH IS OUR FEDERAL PAC, ADMINSTERED BY CUNA. THESE ARE CAMPAIGN CONTRIBUTIONS AT THE FEDERAL LEVEL, AND CULAC MAY ONLY RECEIVE PERSONAL CONTRIBUTIONS. THE CHECKS WERE PAYABLE TO CULAC, AND WE SENT IN THE CONTRIBUTIONS WEEKLY DURING THE MONTH OF JULY 2011 ALONG WITH A WASHINGTON CONTRIBUTOR DISCLOSURE SPREADSHEET. 0 1 9779845 9779845 19147375 2859607 16287768 2684817 1719419 965398 9278164 8204323 1073841 28106852 OTHER LIABILITIES 7177434 MEMBER SHARE DRAFT 121432184 MEMBER IRA SHARES 19611918 SHARE AND IRA CDS 28564240 SHARE SAVINGS 446792035 ACCRUED PENSIONS AND PROFIT SHARING 1993715 625571526 50000282 36738238 13262044 -16418 -16418 13245626 50000282 0 50000282 0 50000282 36738238 0 36738238 0 36738238 PART IV, LINE 2B: MONEY RECEIVED WITH MORTGAGE PAYMENTS THAT IS HELD IN ESCROW FOR REAL ESTATE TAXES. X 1 1 X X X 0 1 0 WAYNE LANGEI 398661 0 79301 0 814518 0 26950 0 10258 0 1329688 0 0 0 JEFF DYKSTRA 114142 0 23377 0 1189 0 15859 0 11868 0 166435 0 0 0 KATHLEEN GAVIN 156863 0 31589 0 101386 0 21060 0 9580 0 320478 0 0 0 JENNIFER KUTCHER 119542 0 23377 0 1189 0 15859 0 6468 0 166435 0 0 0 ROBERT LANGEI 119542 0 23377 0 1200 0 15859 0 6468 0 166446 0 0 0 LISA LANGEI 109739 0 22665 0 1306 0 15241 0 8854 0 157805 0 0 0 COLIN NAYLOR 109239 0 22665 0 1205 0 15241 0 11854 0 160204 0 0 0 PART I, LINE 4B SCHEDULE J, PART III, SUPPLEMENTAL INFORMATION. THE CREDIT UNION MADE CONTRIBUTIONS TO A 457 (F) PLAN ON BEHALF OF THE CEO, WAYNE LANGEI, AND THE EXECUTIVE VICE PRESIDENT, KATHLEEN GAVIN, IN THE AMOUNTS OF $459,981 AND $65,071, RESPECTIVELY. SHANNON DYKSTRA SPOUSE OF CFO 13620 FEES PAID FOR JANITORIAL SERVICES. 0 FORM 990, PART VI, SECTION A, LINE 2 A SPOUSAL RELATIONSHIP AND A FATHER/SON RELATIONSHIP EXIST WITHIN THE EXECUTIVE MANAGEMENT GROUP. FORM 990, PART VI, SECTION A, LINE 6 THE ORGANIZATION HAS MEMBERS. FORM 990, PART VI, SECTION A, LINE 7A MEMBERS OF THE CREDIT UNION HAVE THE RIGHT TO ELECT ONE OR MORE MEMBERS OF THE ORGANIZATION'S GOVERNING BODY, WHETHER PERIODICALLY, OR 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 OF MEMBERS OF THE GOVERNING BODY, AS WELL AS OTHER MATTERS THAT ARE SUBJECT TO THE APPROVAL OF MEMBERS OF THE CREDIT UNION AS THEY OCCUR. FORM 990, PART VI, SECTION B, LINE 11 OUR FORM 990 TAX FILING IS REVIEWED BY WECU'S ACCOUNTING MANAGER AND VP/CFO IN DETAIL. IT IS COMPARED TO OUR PREVIOUS YEAR'S RETURN, TIED BACK TO OUR FINANCIAL STATEMENTS AND OUR GENERAL LEDGER RECORDS. THEN, IT IS REVIEWED BY OUR PRESIDENT/CEO PRIOR TO FILING. A COPY OF FORM 990 IS PROVIDED TO THE BOARD OF DIRECTORS PRIOR TO FILING. FORM 990, PART VI, SECTION B, LINE 12C WECU'S CONFLICT OF INTEREST POLICY FOCUSES ON DEFINING AND PREVENTING CONFLICTS OF INTEREST. BEFORE ENGAGING IN ANY ACTIVITY, TRANSACTION, OR BEFORE ENTERING INTO ANY RELATIONSHIP THAT MIGHT GIVE RISE TO A CONFLICT OF INTEREST, EMPLOYEES MUST SEEK REVIEW FROM THEIR MANAGERS, THE INTERNAL AUDITOR, OR THE HUMAN RESOURCES DEPT. WECU'S HR DEPT., STAFF LIAISON, AND INTERNAL AUDITOR ARE RESPONSIBLE FOR ENSURING THAT NO CONFLICT OF INTERESTS OCCUR THAT COULD HAVE A NEGATIVE EFFECT ON WECU. IF ANYONE SUSPECTS A CONFLICT OF INTEREST, IT IS REPORTED TO MANAGEMENT, THE STAFF LIAISON, THE HR DEPT., OR THE INTERNAL AUDITOR. WECU HAS VARIOUS ANNUAL REVIEWS AND CONTROLS IN PLACE TO MONITOR SITUATIONS IN WHICH A CONFLICT OF INTEREST MIGHT ARISE, WHICH ARE PERFORMED BY MANAGEMENT, OR OUR INTERNAL AUDITOR. FORM 990, PART VI, SECTION B, LINE 15 COMPENSATION FOR THE PRESIDENT/CEO IS DETERMINED BY THE DETAILS OF THE EMPLOYMENT CONTRACT SET FORTH BETWEEN THE BOARD OF DIRECTORS AND THE PRESIDENT/CEO. TO ENSURE THAT PAY RATES ARE COMPETITIVE WITHIN THE MARKETPLACE, THE CREDIT UNION PARTICIPATES IN A NUMBER OF INDUSTRY-SPECIFIC SALARY/COMPENSATION SURVEYS SUCH AS THOSE SPONSORED BY CREDIT UNION NATIONAL ASSOCIATION (CUNA), CREDIT UNION EXECUTIVE SOCIETY (CUES), AND THE WASHINGTON BANK AND CREDIT UNION SALARY AND BENEFIT SURVEY. UTILIZING DATA FROM THESE SURVEYS, WECU'S PRESIDENT/CEO AND EVP DETERMINE THE OVERALL SALARY STRUCTURE FOR THE CREDIT UNION. THEY ALSO MAKE THE FINAL DETERMINATION FOR INCREASES TO COMPENSATION FOR ALL STAFF MEMBERS, INCLUDING OFFICERS AND KEY EMPLOYEES, AFTER RECEIVING PROPOSALS AND FEEDBACK FROM MANAGEMENT, CROSS-REFERENCING THE REQUESTS TO THE SURVEYS MENTIONED ABOVE AND DETERMINING HOW THESE EXPENSES WILL FIT INTO THE OVERALL CREDIT UNION BUDGET AND STRATEGIC PLAN. THE EVP'S COMPENSATION IS REVIEWED BY THE PRESIDENT/CEO, AND CHANGES ARE RECOMMENDED BY THE PRESIDENT/CEO. FORM 990, PART VI, SECTION C, LINE 19 WECU HAS A MEMBER RIGHTS POLICY IN WHICH WE STIPULATE HOW OUR MEMBERS CAN REQUEST AND RECEIVE CREDIT UNION CORPORATE RECORDS, WHICH INCLUDE OUR ARTICLES AND BYLAWS, MINUTES OF MEMBERSHIP MEETINGS AND ANNUAL FINANCIAL REPORT, FINANCIAL REPORTS AND FORMS, CODE OF ETHICS, BOARD GOVERNANCE POLICIES, AND BOARD OF DIRECTORS AND SUPERVISORY COMMITTEE NAMES. A MEMBER REQUEST MUST BE SUBMITTED IN WRITING TO THE CREDIT UNION AND SPECIFICALLY IDENTIFY THE DISCLOSABLE RECORDS REQUESTED. THE CREDIT UNION MAY REQUIRE THE MEMBER TO SIGN A CONFIDENTIALITY AGREEMENT TO PROTECT THE CREDIT UNION FROM UNAUTHORIZED DISCLOSURE OF CERTAIN PROPRIETARY INFORMATION. IF ANY DOCUMENTS CONTAIN MEMBER INFORMATION, IT WILL BE EXPUNGED FROM THE DOCUMENT BEFORE BEING PROVIDED TO THE PUBLIC. CHANGES IN NET ASSETS OR FUND BALANCES: FORM 990, PART XI, LINE 5: NET CHANGE IN UNREALIZED GAIN ON AFS INVESTMENTS -16,418. TOTAL TO FORM 990, PART XI, LINE 5: -16,418. FORM 990, PART XII, LINE 2C: THE SUPERVISORY COMMITTEE ASSUMES RESPONSIBILITY FOR THE OVERSIGHT OF THE AUDITED FINANCIAL STATEMENTS.