Sperry FCU Annual Report 2014

REL AT I O N SHIPS2014 Annual Report

SPERRY

ASSOCIATES

Federal Credit Union

VALUE

Sperry Associates Federal Credit Union produced another sound year in 2014,
achieving favorable financial results and demonstrating that our strategy to
reinvigorate Sperry is effectively in place and on pace. The Board of Directors
is confident that Sperry is positioned for sustainable financial stability and
intelligent growth.

CHAIRMAN’S MESSAGE I am particularly pleased to report that with the continued support of the
Membership, the Board of Directors, the Supervisory Committee along with the
focus and drive of Credit Union Leadership, Management and Staff, Sperry’s Vision
to be our Members’ Best Choice for Financial Services is moving forward. By
offering meaningful financial products and services at competitive rates, Sperry
achieved over 30% growth in our capital ratio and added nearly 12% in New
Memberships in 2014. These results are due in great part to our Membership’s
response to the efforts brought forth by Sperry’s Staff and Management
Team. I commend Kevin J. Healy, our CEO & Vice Chairman, for his
determined leadership and for implementing our strategic plan. The building
blocks are in place to strengthen our relationship with the current Membership
and welcome more to the fold as Sperry continues to grow.

As we know, excellent Member Service is the Sperry in the
foundation of the Credit Union philosophy of Community: 2014
“People Helping People.” I have personally
observed Sperry employes as they provide • Colette Coyne Melanoma Awareness
support to our Members for their finan- Campaign “CCMAC” Walk
cial needs, and I acknowledge their efforts.
Whether discussing loan options in the • East Meadow Cheerleaders
branch or at events, opening savings accounts, • Garden City Park Fire Department
making deposits, or teaching our Members how • Gladiator Fund Breakfast
to use Online Banking or Mobile Banking, • John Theissen Children’s Foundation Casino
our staff treats every Member with high
regard, as a Member not a customer. Sperry Night, Back to School Program, and Toy Drive
Staff strives to take a second look and • Mineola High School Career Day
ask for more details, because building • Nassau County American Legion
relationships is the Credit Union Difference! • New Hyde Park-Floral Park Kiwanis Club

I am certain that Sperry will continue to Night at the Races
provide its Membership with meaningful • Salvation Army
financial products and services to meet the • Six Nassau County Street Fairs
needs of our Members and their families. • The Maurer Foundation
My sincere wish is that our faithful Members • United Way, Operation LIVE United
will continue to spread the word about one • Young Israel of Plainview
of Nassau County’s best kept secrets: Sperry • College Scholarships through New York Credit
Associates Federal Credit Union, thus ensur-
ing that we continue to add Value to every Union Association and Sperry
one of our Members, those we know • Chamber of Commerce Membership in:
today and those we hope to meet and make
a part of Sperry in the future. New Hyde Park, Mineola, Williston Park,
Franklin Square & Wantagh
Gary Barello • Franklin Square Business and Food Expo
Chairman, Board of Directors • Gold Coast Multi Chamber Networking Event
• Trade Nassau

Statements of Financial Condition

12/31/14 12/31/13 12/31/12

ASSETS $24,701,848 $14,161,130 $ 27,772,063
Cash & Cash Equivalents 79,161,370 97,387,485 92,912,323
Investments 141,594,853 139,128,775 148,659,303
Loans Receivable, net 3,970,412 4,065,285 4,217,843
Property & Equipment 4,238,609 9,538,087 10,455,467
Other Assets 253,667,092 264,280,762
Total Assets $284,016,999
LIABILITIES & MEMBERS’ EQUITY 234,781,334 $250,126,314
LIABILITIES 1,175,298 1,119,030 $268,365,078
Members’ Shares 804,351
Accrued Expenses & Other Liabilities 235,956,632 251,245,344
Total Liabilities 269,169,429
MEMBERS’ EQUITY 15,849,981 13,870,419
Regular Reserves 2,300,677 522,054 12,784,497
Undivided Earnings (440,198) 0
Appropriated Undivided Earnings 17,710,460 (1,357,055)
Total Members’ Equity 13,035,418 2,063,077
$253,667,092 14,847,574
Total Liabilities & Members’ Equity $264,280,762 $284,016,999

INTEREST INCOME Statements of Income 12/31/12
Interest on Loans Receivable
Interest on Investments 12/31/14 12/31/13 $8,738,154
Total Interest Income 2,458,606
INTEREST EXPENSE $6,332,016 $7,395,688 11,196,760
Dividends on Members’ Shares 1,844,345 1,981,789
Interest on Borrowed Funds 8,176,361 9,377,477 2,568,658
Total Interest Expense 681
Net Interest Income 1,555,387 1,912,116
Provision for Loan Losses 56 95 2,569,339
Net Interest Income after Provision for 8,627,421
Loan Losses 1,555,443 1,912,211 2,345,208
NON-INTEREST INCOME 6,620,918 7,465,266 6,282,213
Fee Income (1,875,000)
Other Operating Income 8,495,918 619,051 547,782
Other Non-Interest Gain (Loss) 6,846,215 864,166
NCUSIF & Corporate Stabilization Loss (738,307)
Total Non-Interest Income 633,991 467,412 (249,189)
Income Before Expenses 850,831 856,063 424,452
NON-INTEREST EXPENSE 335,966 125,389 6,706,665
Salaries & Benefits (194,643)
Occupancy 0 1,254,221 2,061,382
Operations 1,820,788 8,100,436 421,919
Total Non-Interest Expenses 10,316,706
2,452,742 4,165,388
Net Income (Loss) 3,003,173 392,675 6,648,689
436,073
3,647,041 $57,976
3,119,272 6,492,458
6,558,518
$1,607,978
$3,758,188

CEO MESSAGE I am pleased to report that Sperry achieved another year of positive financial growth
in 2014. The perseverance and diligence of Sperry’s Management Team enabled
us to greatly improve our standing with the National Credit Union Administration
(NCUA), which is the governing board for Federal Credit Unions. Several years ago,
Sperry was advised by the NCUA to “give up” and merge with another credit union
because it was thought that Sperry could not recover from its financial challenges. Instead,
our Board of Directors and I put a plan in place to remedy the situation and Sperry has
emerged stronger than before. Thanks to our Sperry Management Team and Staff working
together to implement new programs to move Sperry in the right direction, we achieved
over 30% growth in our Capital Ratio in 2014. We are making strides to be on strong
financial footing for many years to come.

My Management Team evolved in 2014 and provided some thought-provoking ideas
which resulted in new products that have helped our Membership base grow and
increased Sperry’s revenue. This included the High Five Checking Account, and the Credit
Card Balance Transfer program. These successful offerings attracted many new first-time
Members to Sperry.

Supporting the community and building relationships is at the core of keeping Sperry
on strong footing, so in 2014 Sperry’s Business Development and Marketing
teams focused on reinforcing the Sperry brand, attracting new Members, and at the same
time enriching the local community. We participated in many noteworthy causes throughout
2014, as listed within this report.

Several of the Sperry Board Members had the opportunity to attend the Credit Union
National Association (“CUNA”) “Hike the Hill” Government Affairs Conference
(“GAC”) in Washington, D.C. in February, 2014. We attend this conference every
year because it is important for the State Senators and their staff to keep credit
unions “top of mind” to ensure that we maintain our tax free status and can
continue to offer the best rates and services to our Members. There were over 4,000
credit union attendees and we were all networking and interacting with each other.
I also attended the Albany State Government Affairs Conference in April, which
is a similar venue but is focused solely on the needs and concerns of New York
Credit Unions. Because Credit Unions are cooperative in nature, conferences like
these provide the opportunity to build relationships and share important information
that is relative to our industry and supportive of our Membership.

It makes me proud to see the progress that has been made since I became CEO in 2012,
and I am grateful for the hard work and dedication of my Team as well as the support and
insight of our Board of Directors and Supervisory Committee Members. I am also grateful for
the trust that our Membership has shown us throughout the years. As you know, credit unions
are member-owned, so the value that we are building through our products and services is
intended to directly benefit you, our Members. We will continue to implement our Vision to
make Sperry our Members’ best choice for financial services.

Thank you for choosing to be a Member of Sperry Associates Federal Credit Union!

Kevin J. Healy
CEO & Vice Chairman

SUPERVISORY COMMITTEE REPORT The Supervisory Committee is a volunteer group that is responsible for ensuring the
soundness of the Credit Union’s operations and the compliance of the Credit Union
CFO MESSAGE policies with state and federal regulations. Appointed by the Board of Directors, the
Committee’s main responsibilities are to the Members of Sperry Associates Federal
Credit Union. They ensure that management is implementing sound internal controls
and maintaining practices and procedures that adhere to generally accepted
accounting principles.

Albrecht, Viggiano, Zureck & Company, PC (AVZ) was retained to perform an
annual financial audit and issue certified financial statements on the overall financial
condition of Sperry Associates Federal Credit Union. AVZ audited the financial
statements as of December 31, 2014 and issued an unqualified audit report finding true
and accurate numbers.

The Committee also has regular contact with Membership to ensure that Member issues
are addressed properly and on a timely basis. Member inquiries may be sent to the
Supervisory Committee at:

Sperry Federal Credit Union, PO Box 7875, Garden City, NY 11530.

We believe that the Committee’s persistent attention to detail, our independent
evaluation of the Members’ funds and interests, and our safeguarding of assets will
continually help strengthen the position of Sperry in the marketplace. We appreciate the
opportunity to volunteer in this capacity at Sperry Associates Federal Credit Union.

Rosaria Sasso
Chairperson, Supervisory Committee

In 2014 we grew our capital ratio by 31.4%. That dramatic increase has positioned
Sperry’s balance sheet to make a difference with your balance sheet. Our competitive
loans and deposits along with our well trained people offer our Members a combination
of products and services that better help them meet their financial challenges on a
daily basis. Our goal is to be the solution to your financial questions and needs.

People are taking notice. Over the course of 2014 new Sperry Memberships increased
by 11.9% and once again we are positioning ourselves to more than double that
percentage in 2015. The ability to positively influence our Members and our
community has always been an integral part of the Sperry Credit Union philosophy.
We are proud to be a part of that movement and proud that you have showed
such faith in us. We are looking forward to the opportunity to build on that
faith and position ourselves in the best way possible to serve you. People
Helping People is one of our guiding principles and something we strive to
accomplish every day.

Doug Brinkman
Chief Financial Officer

Total Loans, Shares & Assets as of December 31st

400,000,000

350,000,000

300,000,000

250,000,000 Assets
200,000,000 Shares
150,000,000 Net Loans

2014 ANNUAL REPORT 100,000,000

50,000,000

0
2010 2011 2012 2013 2014

Members as of December 31st

25,000

20,000

15,000

10,000

5,000

0
2010 2011 2012 2013 2014

2400 Jericho Turnpike, Garden City Park, New York, 11040
www.sperryfcu.org Phone: 516-873-7171 Fax: 516-873-7623