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2018 ANNUAL REPORT

2018 Annual Report

Chairman's letter

Chairman's letter
David Dear, Chairman, Board of Directors

To Our Members/Owners:

I am pleased to report that LGFCU has had a pivotal year of serving members and supporting our North Carolina communities. We are happy to share with you how we measure success as your member-owned Credit Union.

LGFCU is no ordinary financial institution. The characteristics that single us out from the pack represent the fundamental makeup of being a cooperative. Our philosophy, core values and financial structure are all purposeful, for the benefit of the membership. The results are evident in how you benefit from being an owner of LGFCU.

Being a Credit Union is more than just offering services. Our products must be affordable and attainable for all members. Our policies must give members an opportunity to appeal loan decisions they don’t like and advocate for improved user experiences. Members should feel valued and know they are part of a cooperative of owners. It is these ideals that can give you hope, and help you know that your Credit Union is truly here for you.

In 2018, the total assets of LGFCU exceed $2 billion. Our membership now totals approximately 340,000 members. This means one in every 30 North Carolinians is a member of LGFCU. This growth in membership and assets makes LGFCU one of the largest credit unions in North Carolina.

Member deposits continue to grow, rising to $1.8 billion last year. We value your trust in bringing your hard-earned nest eggs to LGFCU, and consider it a sacred duty to act prudently with your deposits. This compels us to maintain an investment policy that is disciplined and focused on safety. We know the daily news about stock market changes can seem unnerving. These events do not apply to your Credit Union. We only invest in safe government-backed instruments.

Last year, we made over 113,000 loans to you and your fellow members, totaling over $1.1 billion. Loans to members are for all kinds of purposes. We helped you buy homes, get the keys to vehicles, weather storms and get back on your feet, send your children to college (or return to school yourself), make needed repairs, take vacations and live your best lives. More importantly, LGFCU made loans to members in all 100 counties throughout the state.

Alone, these numbers are impressive, if keeping score seems most important. It’s not. The real determinant of success for us is how well you are doing. In other words, what do you and your family talk about around the kitchen table? We want to influence that conversation — to be about making your future a promising prospect.

The world is changing. Today, we talk about the advent of financial technology upstarts and non-traditional financial institutions that offer newfangled financial products. We’ve seen the development of novel mobile apps and payment services. We agree on the allure. But there is no substitute for a financial partner which has proven its steadiness during changing economic cycles.

LGFCU members can look forward to their Credit Union continually evolving to meet their needs. We have new features on the drawing board to empower you financially. We realize you want more options for moving money and accessing your accounts. They’re on the way.

We are excited about the future of our Credit Union! However, we are even more excited about what the future of our Credit Union will mean to you. Together, we will work to make your financial goals and dreams a reality.

It is a pleasure to serve you as chairman of your Credit Union’s Board of Directors. I work with an amazing group of talented and dedicated directors. On behalf of the entire board, thank you for your membership/ownership. We look forward every day to serving you.

David Dear

Chairman, LGFCU Board of Directors

Shared History

Shared History

When you reminisce on the years gone by, your memories are probably those of life’s important “firsts”: a graduation, your first car, a “real” job, marriage, the birth of your children, perhaps.

And maybe, for some of those firsts, your Credit Union was there with you, for your first car loan, and many after that. Or maybe the Credit Union financed your first mortgage — or your second or third. Perhaps we were there every day with you when you pulled out your LGFCU Visa® Credit Card simply to get groceries or gas.

Whatever part we play in your life, your history is our history. We were there then, and we’ll be here tomorrow.

Some of you may recall LGFCU’s beginning. In 1983, when the Credit Union was founded, a few Advisory Council members were a part of the early movement to spread the word.

In the following video, three original Advisory Council members share their recollections and insights of LGFCU.

Then and Now

Then and Now

In 1983, Americans were listening to cassettes on the Walkman, not to podcasts on iPhones. They were tuning in to “Dallas” and “Cheers” on big box TVs, not binge-watching entire seasons on flat-screens. They were sharing news face-to-face, not on Facebook.

On the homefront, North Carolinians were celebrating the success of the state’s favorite college basketball teams. The Tar Heels men’s basketball team had a fantastic 28–3 season, led in part by a young Michael Jordan, while the Wolfpack, the “Team of Destiny,” won the NCAA Tournament as an underdog.

In 1983, a brand-new LGFCU was welcoming members who worked or volunteered in local government or had family members who were themselves members. At least that hasn’t changed.

Of course, LGFCU has made many changes to offer more products and services and to build in technology and convenience where possible. Yet some things remain the same — like our unwavering dedication to help members in large and small communities improve their lives in large and small ways.

Improving lives means financial growth

1983 2018
Graph: LGFCU's 2018 Total membership numbers
Group photo of employees holding up number one forbes hands
Forbes 2018 Best in state Credit Union logo

Greater Future

Greater Future

As you may know, 2018 brought continued growth, with a new recognition that shows the deep commitment, the passion and the member-centric focus at LGFCU. In an independent survey of more than 25,000 credit union members across the country, LGFCU earned the rank of No. 1 Credit Union in North Carolina, and No. 3 in the nation. That survey, published in Forbes magazine’s first-ever listing of the Best-In-State Credit Unions, brought us both pride and humility at once: We’re proud of this prestigious honor ranking us so notably, and humbled by the fact that our members love us as much as we love them.

Seeing our name at the top of this Forbes ranking just proves what our members know and want to share with others: We’re a member-owned, not-for-profit cooperative working hard to earn their trust and business.”

Maurice Smith, LGFCU CEO

Leadership

Leadership

Most members won’t hear about the many LGFCU stories that remind us why we do what we do. Members may not know about the LGFCU mortgage, or car loan, or personal loan that kept other families out of financial ruin. What members do know is that the Credit Union is here for them.

As real as those stories are, they aren’t the entire picture of how members view the Credit Union’s leadership. To most members, LGFCU is the branch staff, the employees at LGFCU headquarters or even our MDOs in the field. But the heart of LGFCU’s leadership is our volunteer network — those unsung heroes who run our Board of Directors, our Advisory Council and our committees. They help shape and direct the activity of our Credit Union and ensure the member voice is heard, from Murphy to Manteo.

Board of Directors

David Dear

Chairman

Lin Jones

Vice Chairman

Ruth Barnes

Secretary

Ken Noland

Treasurer

Jeanne Erwin

Director

Paul Miller

Director

Dr. Aaron P.
Noble Jr.

Director

To lead is to honor the trust bestowed upon us by our fellow members.

Director Emeritus

  • Al Richardson – Black Mountain

Supervisory Committee

  • Ryan Draughn – Sanford
  • Emily Lucas – Wake Forest
  • Michelle Price – Cary
  • Lee Smiley – Apex

Loan Review Committee

  • Jim Baker – Retired
  • Nancy Held – Retired
  • Pam Hurdle – Town of Hertford
  • Dale Johnson – Retired
  • Tony King – Town of Louisburg
  • Caroline Lee – Retired
  • Wilbert McAdoo – Retired
  • Nancy Medlin – Town of Clayton
  • Charles Murray – Retired
  • Cheryl Perry – Town of Cary
  • Jean Stowers – Johnston Community College
  • Sam Tingler – Town of Cary
  • Charles Weber – Retired
  • Mark Williams – Retired

Advisory Council

The Advisory Council members serve as advocates in their communities, acting as ambassadors to potential members and a source of information to existing members. As of December 31, 2018, there were 569 members.

Albemarle Sound
Brenda Algood
Eddie Buffaloe
Darlene Carter
Monica Cole
Anthony Dickinson
Philip Donahue
Katherine Felton
Jay Fortenbery
Jackie Frierson
Mary Hunnicutt
Pam Hurdle
Stephanie Jackson
Chuck Jones Jr.
Clarann Mansfield
Barry Overman
Amy Powers
Debbie Reed
Fred Spruill Sr.
Keith Throckmorton
Tammy Woodley
Biltmore
Dan Barron
Bob Boyette
Theresa Coletta
Jonathan Feldman
David Foster
Brian Franklin
Tonia Hampton
Rickey Hensley
Brad Holmes
Steve Jones
Dean Luebbe
Joe McKinney
Cheryl Mitchell
Kate O'Hara
Kevin Owenby
Anthony Penland
Sheila Pike
Jason Robinson
Stefan Stackhouse
Danna Stansbury
Joey Webb
John Wilson
Danielle Wittekind
Central Coast
Michael Avery
Grace Barbour
Rosie Brinson
Dorothy Brown
Amy Burdulis
Jayne Calhoun
Leigh Ann Cook
David Cox
Megan Daub
Shirley Gabbert
Natalie Gibble
Thurman Hardison
Wendy Jenkins
Karla Johnson
Valeria Johnson
Tharesa Lee
Jaime Long
Chad Mann
Lea Mills
Susan Nixon
Vickie Phillips
Timothy Pike
Denise Powell
Sherry Riggs
Tony Sears
Chad Smith
Garland Terry
Lee Tillman
Harvey Walker
Ed Weigl
Mary Weigl
Central Mountain
Ellie Avery
Sheila Blalock
Tommy Burleson
Darlene Butler
Richard Canipe
Jackie Cornette
Amy Davis
Angie Eggers
Chris Grace
Scott Hurley
Bobby Powell
Dale Presnell
Amy Shook
Jordan Steady
Cindy Turbyfill
Blake Vance
Central Piedmont
Gerald Anderson
Nancy Boyden
Nikki Carswell
Richard Cooke
Ken Deal
Ti Farmer
Carol File
John Gallimore
Franklin Gover
Grayson Gusa
Michelle Hepler
Robin Howard
Hilda Keeney
David Ketner
Wayne Krimminger Jr.
George Lanier
Jay Lowe
Melody Moxley
TJ Patton
Patti Price
Jessica Reid
Chad Ritchie
Loran Schulte
Kim Stine
David Taylor
Nick Turner
Sylvia Turnmire
Josh Watkins
Mark Wilkinson
Sarah Wilkinson
Angel Wright-Lanier
Chowan River
Carolyn Brown
Joleatha Chestnutt
David Clary
Bill Early
Bobby Eure
Troy Fitzhugh Sr.
Earnest Howard
Evelyn Howard
Alvin Lewis
James Peele
Scott Sauer
Stephanie Simpson
Belinda Smith
Mike Stalls
Marion Thompson
Dominique Walker
Kathleen Wright
Donna Zube
Coastal Plain
Jonathan Allen
Susan Baptist
Pamela Brame
Regina Bryan
Audrey Bryant
Amy Davis
Kathy Hubbard
Sandra Janssen
Hans Kalwitz
Brian Kelly
Jackie Nicholson
Brenda Reece
Chris Roberson
Kathy Wallace
Anna West
Marina Williams
Deep River
Stacy Griffin
Alice Lloyd
Krista Lowe
Gary McGee
Greg Patton
Mike Roberson
Amelia Varner
Thomas Wassack
Jill Williams
Eastern Carolina
Tammy Blake
Delbert Bryant
Theresa Cieslinski
Dennie Dale
Vivian Davis
Wanda Dixon
Debra Dunn
Scott Godefroy
Rosalie Grimes
Doris Hill
Sherry Howell
Barbara Lipscomb
Alice Manuel
Shelton Nelson
Glen Newman
Jasman Smith
Ellen Walston
Eastern Sandhills
Melissa Adams
Michelle Babson
Laticia Black
Annette Bryant
Cathy Buie
Therman Cherry
Chad Deese
Debbie Disbrow
Judy Freeman
Lemark Harris
Justin Hunt
Jody Jernigan
Angela Jones
Kayla Lee
O'Ryan Lowry
Michael McNeill
Ti Morrill
Marion Morrisey
John Rankins
Katrina Tatum
Annie Williams
Larry Williams
Eastern Triangle
Veloris Allen
Elton Daniels
Jeremey Daughtry
Gordon Joyner
Tim Kerigan
Billy Langston
Valerie McLamb
Melanie Proctor
Amy Shearin
Connie Sorrell
Matt Sutphin
Jennifer Turner
Foothills
Chris Beddingfield
Heather Black
Erica Bobo
Jeff Brittain
Debra Brown
Rich Chuvala
Jeff Clevenger
Vontella Dabbs
Gary Foster
Laura Hamilton
Amy Heavner
Justin Merritt
Chuck Moore
Bryant Morehead
Zach Ollis
Judy Smith
Judy Toney
Lisa Wassen
Barry Webb
Phil Welch
Hatteras
Charlene Allen
Ellen Bell
Becky Breiholz
Gary Britt
Melody Clopton
Mike Eubank
Fred Featherstone
Bonita Hurdle
Lynn Morris
Elizabeth Reilly
Kermit Skinner
Karen Swaine
Kevin Zorc
Lake Hickory
Winfield Abee
Laura Anderson
Sherri Bradshaw
Seth Eckard
Brandon Elrod
Tamara Faulkner
Patricia Gabriel
Kimberly Green
Paul Hedrick
Carson Hendrix
Danny Hester
Darlene Huffman
David Huffman
Louise Humphrey
Charles Ingold
Debbie Jones
Teresa Laffon
Claudia Main
Todd Money
Johnny Overby
Molly Phipps
Wayne Rash
Donald Robinson
Crystal Smith
Betty Jean Stinson
Addie Williams
Michael Willis
Mecklenburg
Bill Blackwelder Jr.
Aaliyah Cupil
Chanyne Cupil
Craig Cupil
Anna Ellis
Christina Fath
Charvetta Ford
Brian Gott
Andrew Holland
Heather James
Stephanie Kelly
Barbara Lansche
Roger McCoy
Mike McLaurin
Steve Roberson
Teresa Ross
Laura Wasson
Nantahala Forest
David Adams
Terry Ashe
Elise Bryson
Mike Decker
Kyra Doster
Sheila Jenkins
Pam Ledford
Chuck Norris
Dustin Pendergrass
Ruth Sitton
Chuck Young
Northern Mountain
Connie Bauguess
Breanna Creed
Bill Hancock
Carol Hermann
Steve Hutchens
Stephen Mahaffey
Denise Monahan
Michael Pardue
Larry Phillips
Lizabeth Roupe
Miranda Roupe
Josh Smith
Sandra Snow
Vic Spencer
Monroe Wagoner
Susan White
Northern Piedmont
Jackie Astrop
Carla Banks
Joseph Brady
Debra Bronson
John Capes
Tommy Cole
Chamreece Diggs
Stacy Farlow
Valarie Halvorsen
Antuan Hawkins
Matthew Johnson
Brenda Jones Fox
Jimmy Marley
Kendrick Mayes
Tim McKinney
Carolyn Nimmons
Eric Olmedo
David Parrish
Chris Phillips
Teri Sentiff
Keith Volz
Melinda Ward
Jason Wood
Janice Wyrick
Northern Triangle
Angelia Alston
Sandra Catherwood
Joyce Dickerson
Kelly Faulkner
Coy Floyd
Jon Franklin
Cheryl Hart
Joyce Howard-Fritz
Argretta Johen
Holt Kornegay
Elgin Lane
Donna Lee
Jordan McMillen
Javier Plummer
Donna Stearns
Curtis Tyndall
Dianne White
Research Triangle
Brian Andrews
Kendra Beard
Germaine Brewington
Deborah Craig-Ray
Tara Fikes
Reginald Johnson
Kevin Locklear
Lenora Minion
Daniel Oguin
Craig Page
Alice Sharpe
Diane Shepherd
Stevon Strudwick
Deborah Taylor
Lee Worsley
Roanoke River
Mary Anderson-Faison
Christie Avens
James Avens Jr.
Starlin Beatty
Tony Brown
Denise Cherry
Wanda Clark
Spinosa Clements
Barbara Davis
Tyree Davis
Walter Gardner
C. Shane Lynch
Mark Macon
Ginny Orvedahl
Marcenda Rogers
Kristin Scott
Robin Williams
Southern Coast
Regina Alexander
Tommy Batson
Ken Bogan
Micki Bozeman
Marty Cooke
Joy Easley
Bob Grant
Mary Green
John Grimes
Warren Lee
Travis Mitchell
Chris Nelson
Teresa Parker
Avril Pinder
Gregory Sibbett
Shannon Slocum
Brandyn Smith
Lynnine Webb
Justin Whiteside
Southern Mountain
Herbert Blake
Sheila Cozart
Kelley Craig
Johnny Duncan
Jim Fatland
Susan Frady
Ken Garrett
Wallace Hollis
Rocky Hyder
Cathy Justice
Rick Livingston
Jessica McCall
Heather McGaha
David Nicholson
David Reid
Glenda Sansosti
Southern Piedmont
Ben Bailey
Crystal Gilliard
Gloria Haney
Nyki Hardy
Scott Hopkins
Bonnie Huntley
Brian Matthews
Franco McGee
Shawn Oke
Kimberly Parker
Donald Patera
Brady Ross
Mark Watson
Tar River
Tim Bilderback
Gordon Deno
Grant Goings
John Hunt
Cynthia Jones
Anison Kirkland
Troy Lewis
Wendy Moody
Nancy Nixon
Scott Parker
Robbin Pridgen
Wendy Rose
Pat Saunders
Dallas Shackleford
Jessica Smith
Andy Williams
Wake
Bryan Alexander
Tony Beasley
Kanika Brown
Jason Cannon
TJ Cawley
Bennie Collins
Shonda Corbett
Michelle Daniels
Marchell David
Sandra Dixon
Michael Edmonds
Gregge Efird
Cecelia Farrell
Felex Gathings
Hannah Gathings
Cheryl Gay
Celeste Goddard
Eleanor Green
Diana Harris
Randall Heath
Scottie Hinton
Denise Hogan
Dale Johnson
Forrest Jones
Kim Kenny
Eric Keravuori
Fontae Kilpatrick
John Kuhls
Mike Latta
Laura McLaughlin
Donald Monah
Carla Morgan
Tanner Morrison
Betty Pearce
Geoffrey Pearson
Erika Phillips
Jason Pleasant
James Purington
Sherry Scoggins
Aileen Staples
Ike Wheeler
Kenneth Wilkins
Chandra Wright
Todd Wright
Western Mountain
Victor Davis
Daphne Dockery
Melody Johnson
Mike Sheidy
Andy Williams
Western Piedmont
Scott Buffkin
Gray Cassell
Kimberly Dennings
Megan Garner
Martha Hancock
Joshua Harrold
Stephen Hawryluk
Matti House
Dolly Hulin
Tony Jarrett
Andrew Lance
Chris Mack
Lynn McKinnie
Dora Moore
Ben Neal
Susan O'Brien
Hank Perkins
Ann Stroud
Jean Thompson
Cory Tobin
Western Sandhills
Bob Bridwell
Dena Cook
Jamie Dockery
Betty Galloway
Amanda Hart
Brandon Holland
Angie Kantor
Meta McCune
Joyce McGehee
Ebony McLean
Dee Ann Purvis
Judy Rhyne
Melanie Rodgers
Regina Rosy
Marian Savage
Dawn Spivey
Terry Tapp
Theresa Thomas
Sheila Trotter
Donna Wright
Western Triangle
Michael Adkins
Shelton Burnette
Katherine Cathey
Lindsey Davidson
Bill Davis
Carol Dorsey
Lisa Edwards
Dylan Galloway
Diana Harris
Tamara Hayes
Sylvia Johnson
Anita Jones-McNair
Frankie Maness
Ernest Mangum
Wilbert McAdoo
Todd Norman
Dale Norris
Shari Porterfield
Whitney Powell
Angela Satterfield
Steven Stewart
Sean Tencer
Shannon Watkins
Susanna Williams

By The Numbers

By The Numbers

Membership total

Graph: LGFCU's 2018 Total membership numbers

Investment Portfolio Mix

Chart: LGFCU's 2016 Loan Portfolio Mix

Loan Portfolio Mix

Chart: LGFCU's 2016 Inverstment Portfolio Mix

Assets Total

Chart: LGFCU's 2016 Total Assets

Statements of Financial Condition

Assets2018 2017
Cash and Investments $189,978,320$200,741,339
Mortgage Loans $735,155,854$620,273,635
Personal Loans $222,597,857$190,642,821
Member Business Loans $104,709,558$83,598,420
Home Equity Loans $95,719,975$84,816,050
Auto Loans $517,812,672$529,878,838
Credit Card Loans $95,820,695$92,522,314
Allowance for Loan Losses ($18,932,280)($15,777,490)
Net Loans $1,752,884,330$1,585,954,587
National Share Insurance $17,635,660$16,687,575
Other Assets $113,279,460$105,731,097
Total Assets $2,073,777,770$1,909,114,597
Liabilities 2018 2017
Payables $46,704,706$21,527,178
Share Accounts $485,026,349$429,590,603
Share Draft Accounts $341,294,190$321,100,843
Money Market Accounts $560,812,040$511,753,442
Individual Retirement Accounts $184,101,195$182,574,559
Share Certificates$257,958,831$271,549,081
Total Deposits $1,829,192,605$1,716,568,528
Total Reserves &
Undivided Earnings
$197,880,460$171,018,891
Total Liabilities & Equity $2,073,777,770$1,909,114,597

Statement of income

Operating Income 20182017
Investment Income $3,306,370$3,037,863
Mortgage Loans $27,896,980$22,577,046
Personal Loans $21,948,867$18,743,337
Home Equity Loans $4,089,613$2,731,871
Auto Loans $24,612,715$22,831,433
Credit Card Loans $10,167,110$8,583,445
Member Business Loans $2,866,834$2,414,592
Total Loan Income $91,582,118$77,881,724
Other Operating Income $41,919,591$37,086,428
Total Income $136,808,080$118,006,015
Operating Expenses20182017
Operating Expenses $100,532,437$99,859,398
Interest on Borrowed Funds $167,735$18,493
Share Accounts $2,432,767$1,154,763
Share Draft Accounts $465,916$418,336
Money Market Accounts $4,485,926$2,615,033
Individual Retirement Accounts $2,850,948$1,969,737
Share Certificates$3,457,660$3,234,382
Total Deposit Expense $13,693,218$9,392,251
Total Expenses $114,393,389$109,270,141
Net Operating Income $22,414,691$8,735,874

Nature of Operations

Local Government Federal Credit Union (the “Credit Union”) is a not-for-profit cooperative that serves employees of local government units. The Credit Union is organized under the laws of the Federal Credit Union Act and is exempt, by statute, from federal and state income and sales taxes. The Credit Union serves its members through the State Employees’ Credit Union (SECU) network. This network includes more than 250 branches and nearly 1,100 ATMs in all of North Carolina’s 100 counties. The Credit Union’s primary source of revenue is its loan portfolio.

Audited Financial Statements

The financial reports provided here have not been audited. The Credit Union’s accounting firm, CliftonLarsonAllen LLP, has audited financial statements for the annual periods ending June 30, 2018 and June 30, 2017, which are posted on the Credit Union’s website at www.lgfcu.org. These financial statements include a more in-depth financial analysis and extensive footnote disclosures that provide additional information on the results of the Credit Union for the respective period ends as noted above.