Well, good morning and welcome. I'm Lin Jones, I'm Chairman of the Board of Directors for Local Government Federal Credit Union. And it is wonderful to see all of your faces. It has been two years that we have had to do virtual, virtual is fine, but nothing beats having you all here in the room. It really does. And it's wonderful.
I'm calling the 39th Annual Meeting of Local Government Federal Credit Union to order. A quorum of 15 members is required for the annual meeting. I think we certainly have that and seeing that there's more than 15, the chair recognizes and declares a quorum for this meeting. The assistant to the secretary, she'll record the minutes of this meeting.
Next I'd like to call on board member Dr. Aaron P. Noble Junior to give the invocation. Aaron. Thank you very much, Chairman Jones.
Please join me in returning thanks. Oh Heavenly Father, this is the day that you have made. We will rejoice and be glad in it. Heavenly Father, we're so thankful, first of all, to be able to assemble in person once again. It's been two years since we've enjoyed the fellowship, the friendship, the camaraderie that has really been spun through this organization over time.
And we thank you for putting the pandemic at bay and allowing us to assemble as a group and allowing a degree of normalcy to return to our lives. Heavenly Father, we ask that you continue to bless this Credit Union. You've been so gracious to us. You blessed us with a wonderful staff. You blessed us with wonderful members. You've allowed this organization to grow.
And more importantly, you allow it to meet the needs of your people, and for that, we give you thanks. And Heavenly Father, at this time when there is so much going on in our world today, we ask where there is hate that you give us love, where there is anger that you provide us with tranquility, and where there is war.
Heavenly Father, we ask that you give us peace. We ask that you bless our meeting today and all of those who are in attendance. Heavenly Father, when they return back to their respective homes, please provide them with traveling mercy so they can arrive at their destination safely. Be with us, guide us, protect us, these and all blessings.
we ask in the name of your son, Jesus the Christ, amen.
Thank you, Aaron. The first order of business is the approval of the 2021 Annual Meeting minutes. These minutes are available for your inspection upon request. The chair will now entertain a motion for approval of the minutes. So moved, may I have a second. Have a motion and the second. All in favor say aye. Any opposed? Hearing a majority in favor, this motion is approved. This time I'd like to introduce your Local Government Federal Credit Union board members and ask that they stand as I call their names. Vice Chair Ken Noland from Wilkesboro. Secretary Ruth Barnes from Atlantic Beach. Treasurer Jeanne Erwin from Cary. David Dear, from Shelby. Dr. Aaron P. Noble Junior from Burlington, and Paul Miller of Snow Hill, is recovering from a surgical procedure and was unable to be with us today.
Paul, we wish you a speedy recovery. I hope he may be watching this online. And in his absence, I'd like to recognize our emeritus member, Al Richardson from Black Mountain. Also in attendance, we have the two independent directors of our sister organization, Civic Federal Credit Union. Please recognize Treasurer Kellie Blue and Willie Best from Chapel Hill.
And Kellie is from Robeson County. Thank you. Please give these dedicated volunteers a round of applause. The chairman's report is available in the 2021 Annual Report to membership. A link to the annual report has been provided on our website. LGFCU cannot operate the way it does without the contribution of our many volunteers. Almost every month the board appoints new volunteers to serve in a number of capacities.
We appreciate the work of these bodies of volunteers, and what they provide to our Credit Union. LGFCU has more than 600 volunteers working on behalf of our Credit Union members. We currently have seven board members, 601 Advisory Council members, five Supervisory Committee members, and 12 Loan Review Committee members. This time I'd like to give a special thank you to all the new volunteers who have been appointed during the last 12 months.
And if we have any Advisory Council members or volunteers who are attending their first annual meeting, would you please stand? All right. Thank you.
To all of our volunteers, please remember LGFCU is only as effective and as efficient as the efforts you give us in helping us to run our Credit Union. At this time, I'd like to call on Emily Lucas for the Supervisory Committee report.
Good morning, members. On behalf of the Supervisory Committee, it is a pleasure to present this report once again in person for the annual meeting of Local Government Federal Credit Union. It is the duty of the Supervisory Committee to ensure that all financial records present fairly the operations of this Credit Union and that procedures and practices are sound, thereby protecting members, deposits and rights. In accordance with the National Credit Union Administration requirements.
We engaged the CPA firm of Clifton Larson Allen to perform a financial statement audit of the Credit Union as of June 30, 2021. The audit found the financial statements proved to be a fair presentation in all material respects of the Credit Union's financial position, and that the results of operations and cash flows were in conformity with generally accepted accounting principles.
On behalf of the committee, the auditing firm helps ensure that accounting records are free of material misstatement and represent the true financial picture of this Credit Union, and that the Credit Union follows sound accounting principles and guidelines. The committee monitors policies for fairness, soundness and efficiency. Also, the Credit Union employs an amazing internal audit department that tests the internal systems and processes. The internal audit team conducts periodic consultative, operational and compliance reviews of various functions within the Credit Union.
I wish to thank the board and the members for their confidence in the work that the Supervisory Committee does for the Credit Union.
Thank you. Thank you, Emily. Our Supervisory Committee provides an important service to the members by ensuring the safety and soundness of the Credit Union. But thank you again, Emily, for providing the report. And please relay our appreciation to the rest of the committee. Before we hear the chair of the Loan Review Committee, our CEO, Maurice Smith, would like to say a few words about Tony King, who led the Loan Review Committee and served as an advocacy ambassador until his passing this last year.
Tony was both a colleague and a friend, and a fierce advocate for the Credit Union. We will miss him dearly.
Maurice. Thank you, Mr. Chairman. Good morning, everyone. I prepared a few remarks I want to mention about Tony. I mean, we were saddened to receive the news of his passing. And some of you may remember Tony as a former chair of the Loan Review Committee. Tony would constantly remind us of the Credit Union's purpose when it comes to lending.
It was you know, he found it to be, you know, a satisfying sacrifice to serve all of you on the Loan Review Committee. And he would talk about the need of us to be intentional about the membership and what we were doing. We would often talk, sort of lament, about the way financial services are going today. For many institutions, an individual is simply just a number, an account number or score, something this doesn't represent who that individual actually is as a person.
And Tony was proud to, you know, to emphasize that the Loan Review Committee had the final say on member applications. This is an unusual practice. And if you think about the difference between credit unions and other types of financial institutions, most institutions do not have a Loan Review Committee, a body that you can appeal decisions to. Occasionally, a member would call my office and they would be ticked off about the decision they received on a loan application.
I want to talk to the CEO who has the final say on my loan application. You're talking to the wrong person. It's the Loan Review Committee that has the final say, whatever decision the committee makes, I don't have the authority to to overrule it or undo that decision. It's you, as members of the Credit Union, who have that final say. Tony, he believed it was important to take the time and listen to a member's story.
And I know for financial institutions, it's important for us to have our metrics, to have our apps and to have all the technology to help us determine the risk of a loan application. But there's something about a story, to listen to an individual. Tell me what happened in your life. How can we help? We want to understand how to meet your needs.
And Tony was old fashioned in that way. That story should mean something to us as an organization. Our friend, my friend exhibited what I like to consider is the humanity of financial services and of membership. And we often talk about servant leadership in a number of different conferences. We talk about it in among our staff. What does servant leadership actually mean?
I believe Tony's legacy to this organization and to our community is exactly that. He exhibited what servant leadership means and what it should mean. We will miss his service here at the Credit Union. And may his soul rest in peace. Thank you, Mr. Chairman.
Thank you. Thank you, Maurice.
Tony will be missed. I mean, most of you remember seeing his report each annual meeting, Tony, you'd send him a script which Tony didn't follow, as you can remember, but it was always interesting to hear his report. And now I like to call Wilbert McAdoo for the Loan Review Committee report.
Good morning. I am pleased to present the Loan Review Committee report for the 39th Annual Meeting of the Local Government Federal Credit Union. The Loan Review Committee fulfills two significant roles for the Credit Union. First, the Loan Review Committee gives members a way to appeal loan decisions that they have received. These loans may have been denied through the usual delivery channels.
This second look by volunteers is an assurance to members that they are not just another number. Secondly, the Loan Review Committee offers members a direct voice into the loan decision process. Loan Review Committee members are not staff. Loan Review Committee members are volunteers. This is your fellow members who serve without compensation. This right to appear before the Loan Review Committee appears is a unique benefit for Local Government Federal Credit Union members.
This is truly one of the differences that makes Local Government Federal Credit Union membership exceptional. These members are given the option of having the applications presented to the committee via mail, telephone or in person. In each instance, every application is treated equally, confidentially and respectfully. Last year, the Loan Review Committee met as often as needed, usually weekly, to consider the needs and requests of members. During 2021, the Loan Review Committee reviewed 29 member loan requests and after careful review, the Loan Review Committee was able to approve 41% of those applications. This is a very dedicated group of individuals. In fact, some of the members have served more than 20 years. I thank the committee and board of directors for their hard work and their effort. We are truly making a difference in the lives of the members and their families.
Respectfully submitted, Wilbert McAdoo, Chairman of the Loan Review Committee. Thank you, sir.
Our Loan Review Committee really demonstrates the credit union spirit of members helping members. Thank you, Wilbert. Please let the rest of the Loan Review Committee know how much we appreciate their hard work. Next, I'd like to call on Kellie Blue to give the Nominating Committee report. Mr. Chairman, thank you for the opportunity to present the report from the Nominating Committee. I'd like to begin by introducing the members of the Nominating Committee, Ms. Ruth Barnes, Mr. Ken Noland, and myself. In accordance with the Credit Union bylaws, the chairman of the board appointed the Nominating Committee. The charge of this committee is to review qualifications of prospective candidates for the board and make nominations to the membership. The committee has voted to submit the following nominations.
Paul Miller, Snow Hill, North Carolina, for a three-year term. Dr. Aaron P. Noble Jr., Burlington, North Carolina, for a three-year term. Mr. Chairman, the Nominating Committee submits these nominations, we submit these nominations and recommendations to the membership.
Thank you, Kellie, and thank you for your report. And thank you to the members of the Nominating Committee for their work. Our bylaws provide for nominations from the floor in the event of a vacancy where no nominations have been submitted. There are no such vacancies. There were no petitions received from members for nomination. The chair will entertain a motion for the election of the Nominating Committee selection by acclamation.
Do I hear a second? Thank you. Having a motion and proper second, the motion is approved. Next, I'll call on our CEO, Maurice Smith, for his report, which I have to tell you is one of my favorite parts of this entire meeting.
Maurice? Thank you, Mr. Chairman. Good morning, everyone.
I just want to take a moment first of all, to just take this in. I'm trying not to cry. So it's been a tough couple of years for, for many of us. Most of us, perhaps all of us. And so earlier, I was just listening. I was talking to Ken earlier and just listening to the buzz of conversation in the room.
And what a beautiful sound that is. You don't get that on a Zoom call. You don't get it on an email or a text. You get it with human interaction and people coming together, enjoying each other's company. This is a joy to me to see all of you. And thank you for taking the sacrifice of your time to be here for the annual meeting for LGFCU.
You notice that we call this a membership meeting. We don't call you clients and we don't call you customers. You are members. And to me that, there's something sacred about membership. There's no credit union and then there's you. If you're a member of something, you are part of something. You are it. So the credit union is you. Is that proper English? Are you, is you? You are the Credit Union.
There's no there's nothing distinguishes between that. So as part of a membership meeting, then I feel like there's a heightened responsibility that we have to be transparent, to be accountable, to be fully reportable to you about what we are doing for your organization and to listen to your needs and what it is you expect of us. So this is my, as Lin mentioned, this is my favorite meeting of the year.
Also, you can't see my knees knocking behind this podium either. So, so as enjoyable as this is, it's a bit nerve-wracking for them talking to all my bosses. So you see, LGFCU is represented by seven board members, but because you are owners of this institution, as my dad said, if you own something that makes you the boss.
I've got a lot of bosses in here and we owe it to you as the boss to be able to listen to your concerns, your needs, and be responsive to those. So I'm delighted to be here for the annual meeting and to provide to you a report of your Credit Union for this last year and how we have performed.
So I've, you know, Chairman, Chairman Jones puts it well and his quote in the annual report, In the midst of trials we faced last year, you rose to the occasion. He's not talking about the Credit Union here. He's talking about you rose to the occasion. So a pandemic comes along and the rest of the world is hiding under a rock and deciding that we are going to, you know, and for good reasons, protect ourselves and break our normal routine.
And we are going to just wait this thing out. But you in local government, you didn't have that luxury. We citizens, we residents of the communities, we continue to expect you to provide services to us. We still expected to have clean water, safe buildings, emergency services, government services for our communities. And you provided that. So in the midst of this trial, you arose to the occasion. On behalf of a grateful citizenship and members of the community, thank you for the services that you provided to us. We know in daunting times, and there were challenging times for you because you have to be concerned about the safety and welfare of yourself and your families as well, but for many of you, you put that aside for the protection and the service of us in the community. We do not take that for granted, not for one single moment, you know, and it just creates this sense of pride in all of us who work in this institution.
That we serve you, because you are membership that serve us. So what do you say we get started here a little bit? I got this little clicker here that sort of advance the slides here, and we're going to have a conversation about how your Credit Union has done. And it says here, how are we doing? What do we, as all of us, because you are part of the credit you not just the institutional side of things, but how are we all doing? Let's have a conversation about that. So here we have 2021 at a glance, and we show some statistics on how your Credit Union performed last year. In the midst of a pandemic coming along the trails of a recession, uncertain times, what does the world look like going forward? Here's how your institution performed. One in every 27 North Carolinians is a member of LGFCU. And that's because of this support and evangelism that you provide in sharing the news about the Credit Union with others. I mention here we are the ninth largest financial institution in North Carolina. There's 144 financial institutions in North Carolina, including banks and credit unions, and we are the ninth largest.
This is because you performed in supporting your Credit Union and asking your colleagues to be a part of this institution. Total assets $3.2 billion. Just as a moment of maybe personal reflection, I started working at LGFCU in 1992. December 7, 1992 thereabout, and our total assets then were $67 million. Now if I can convince you the reason why we are $3.2 billion because I did it, you know that's not true.
You did it. It's your support, it's your patronage, it's your spreading the word about LGFCU among your colleagues is what created the institution that we have today. The final number I'll mention on this slide is $4 billion in economic value annually to the state of North Carolina. If you want to, if you just wonder this, LGFCU matters to this state, just look at that number. $4 billion in economic value to the state. This is what you did. Not just us as staff. So, one of the barometers that you use to determine the success or the wherewithal of a financial institution is growth. How well did the institution grow? In the business world, sometimes we use this adage where you either, either you're growing or you're dying, and maybe there's some truth to that.
But the notion here is that you know, it's important that we continue to grow as an institution to serve the community. I want to run through some of these numbers to give you an idea of how well we've done. To give you some context, we have on here peers, which is peer-sized credit unions. Other credit unions in the nation who are similar to our size for LGFCU, roughly the billion dollar-plus organizations. In the total assets for the credit union, we grew a little over 15% for the year. How does that compare to peers?
Peers grew by just under 12%. So we are growing faster than similarly sized financial institutions, credit unions that is, in the United States. That's what you've done. Total deposits for the Credit Union grew by just less than 15% for the year. Our peer credit unions a little under 13% was their growth rate. Total loans, this is hair on fire growth for the loans, almost 25% growth for loans.
You know, so think about the context of this loan growth. It came in, in the midst of a pandemic. Now, and I'm gonna mention this perhaps a couple more times, I think the point is worth noting, this is a pandemic. In a financial services market, those who are managers of institutions, there's a practice that whenever you're going into uncertain times, Wall Street doesn't like uncertainty.
Financial institutions don't like it either. So whenever you see uncertain times, there is a tendency to sit on your hands, to move to the sidelines and say, we're just going to wait this pandemic out. We don't know what it means. So, you shouldn't be surprised when you read in the news, and some financial institutions are closing out lines of credit, they're increasing the difficulty for individuals to get loans, because what they're trying to do is just wait out the conditions and see what happens. Not LGFCU. Loans grew by close to 25%, peers by eight and a half percent. Investments went down almost 13%. Like 12 and a half percent. Peers went up by 24%. There's a story in that. Every dollar that you as members bring to the Credit Union, the first thing we think about is how do we invest your money. Because by putting it in an investment is how we earn a return that we can pay dividends to you. There's two ways, for the most part, that we invest money. One, we can put it in marketable securities. These are government-backed securities that are protected and safe. You know, nothing weird, nothing risky, nothing exotic, sort of boring stuff. The other way we invest it is in loans to you.
We are a Credit Union. We'd much rather make loans to you. So when you see that growth rate on loans going up close to 25%, then that means we don't have to invest it in the market and we are putting that money to work for you, your family and your communities. So, we want to see that investment number from time to time, not keep up with peers in terms of the growth rate, because we want that money to go out into your homes. Net worth for the Credit Union went up by 22.39%, peers went up by 11.27. Net worth is the savings account for the Credit Union. So we have to put aside reserves for uncertain times in the future. As you can see, we were building higher reserves during this period of time. The membership went up by just a little margin, more than our peer-sized credit unions. Now a little inside baseball.
Because now we're going to get kind of nerdy on some of the numbers. This is your Credit Union. You should wonder how did we perform? And so the business of managing a credit union, of guiding a credit union, because the board demands these numbers from us on a monthly basis. How are we performing? Well, one way to look at it is not just looking at the dollars and cents, but looking at ratios and percentages, because regardless of the size of the portfolio, you get a sense of the performance based on the comparative performance, based on how it's working with the other numbers that we have on the balance sheet.
Let's explain a few of these. The cost of funds. The percentage of total expenses, actually, the interest rate that we pay, the dividends we pay on your deposits, is called cost of funds, sort of a term of art in our business, as you can see for here for us was .28%, peers 0.47%. A little less than our peers.
But there's a there's something going on behind the scenes here. And part of it is the effect of supply and demand, also leveraging and consumer behavior. One of the things we've learned about our membership is that when we think there's going to be a rising rate environment and the Federal Reserve has indicated multiple rate increases for the year, most of you, most of our members decide we are just going to sit this out and we're going to just invest in a higher earning instrument when rates go up. So, during these occasions, members often put their money in their share account or their checking account just waiting for rates to go up, and then they will invest it in share certificates or CDs.
So, we have a lot of members who are pocketing money in low interest-earning accounts waiting for higher rates for the future. Not a bad strategy, but it depresses the cost of funds here a little bit compared to our peer-sized credit unions. Expenses to income. We take a look at what it takes to operate your Credit Union and compare that to the income we were receiving for the Credit Union.
And as you can see here by the blue and the gray bar that we can operate LGFCU less, it's less less expensive than it would be for our peer-sized credit unions. We think that's a mark of efficiency also for you. But then we look at the next chart and we see the expense to assets and expense to assets is a little bit higher than our peer size credit unions.
And part of that equation is because we prepared ourselves for this pandemic in a recession that we face. So, take a look at the next column over to give you a little bit of insight on that. That is a provision for loan losses. Now, this might shock you, but every now and then we make a loan and the member doesn't pay us back.
It doesn't happen often, but it does happen. So, you go into a recession and you think, oh man, people might be losing their jobs. Expenses are going up. What's the price of gas today? Bread, everything. The cost of living is going up. And so that might actually impede the ability of a member to, to make their loan payments to us.
Now, if we were a traditional financial institution, we would have gone over to the sidelines and said, let's wait out this pandemic. But your board of directors said, no, no, we're not doing that. We are going to stay in the game of lending money to members at a time when they need it the most. What kind of credit union would we be, when you need us the most we're going to turn our backs on you? So to prepare for the potential that we're going to have higher losses loaning in a pandemic when everybody else is going to the sidelines, we put aside what is called provision for losses. We put aside reserves in the anticipation that some, few more loans are going to go bad.
That's not OK. But it is OK, because we're not going to turn our backs on you. So you can see a provision for loan loss is .19% compared to our peers. Went down by 0.01%. Remember, the Credit Union is you. You are the Credit Union. What kind of institution will we be to turn our backs on you?
Now, we put aside reserves for losses. What does that actually mean? And real losses. The next column is charge-offs. This is when a loan has reached a point like, let's just give up. We're not going to get any more here. Let's just write it off as a bad debt. And you can see where a .38, our peers a .18.
What is that? How does that shake out to the bottom line? The final set of numbers, return on assets, essentially is the bottom line for the Credit Union. As you can see, for us, it's 1.78%. Our peers 1.08%. Even with taking more chances on the membership, we still produce a better bottom line than our peer-sized credit unions. That feels like a good deal to me because we are looking after you and you perform and servicing the Credit Union as well.
So you've seen this chart from me before. And this is the chart that shows the total assets from the Credit Union for inception in 1983 until 2021, last year. It looks impressive to me, to see assets go up like this. We have not, we've never had a negative asset growth year. Can I say that better than that?
There's never been a year where we have assets go down. We've always grown in membership, grown in deposits, grown in loans. And that's because of you. And indeed, indeed, absolutely. But this chart doesn't tell the whole story. It just shows you how our total assets have gone up. And it isn't just luck or just happenstance that the assets are going up.
It's because of deliberate decisions by the board of directors, your management team, to the support and guidance that you have provided to the Credit Union. So now let's take a look at total assets and let's add a story to it. So the Credit Union formed in 1983 and along about 1988, the board of directors here decided it would be a good idea to have Advisory Councils, individuals who can evangelize the Credit Union purpose and its mission out in the communities, to be a focus group if you will, to feed information back to us.
What's going on in your corner of the state that we should be aware of so that we can make sure that we are being sensitive to the needs of the membership, your family, your neighborhood, that's what you have done as Advisory Councils. If anybody in here is not a member of the Advisory Council, we'd be happy to talk to you about that because you are the ears and the mouthpiece of the Credit Union out in the community.
Do not underestimate the value you provide to the institution here and, and the factor that's important for our success. Long after that, we started talking about, you know, we need a brand, this credit Credit Union. We need people to know LGFCU is different from other institutions. And so we started working on branding, putting member development officers out in the field to talk about the Credit Union, who we are.
And you see assets continue to grow. And we've built this website, ever heard of a website? Well in 1998 that seemed like a novel thing to do. Well we built this website and that changed things for the Credit Union. A game changer also was getting into the fire lending business, serving the heroes in the communities that serve you.
We needed to learn what it was. I needed to learn what was a pumer truck, turnout gear. My vocabulary expanded but more importantly we hired really smart people who understand this and those of you who work in this field, you said, here's how we need our Credit Union to serve us. We built the Quorum Center as a monument to local government, just across the street from the League of Municipalities, Association of County Commissioners, down the street to from the legislature, from the capital, the governor's office.
We didn't want anybody in, in Raleigh to not know the importance of local government. And so we built this facility that is for your use, to come in when you're in town, need a cup of coffee. I don't know how to make coffee, but if you come in, you need something, come see us. This is your Quorum Center. O,ur partnership with the School of Government, has added really real value to the state of North Carolina, and we are proud of that. We launched Civic Federal Credit Union because you said you wanted more services. You wanted in a different way and you want to be able to expand the footprint of our services and local government. We created it for you. And then we have this pandemic comes along.
And most of us in financial services are thinking there's going to be a retrenchment in our business. We're going to see assets sort of fall back. We're not quite sure where the losses are coming from. And then we grow like crazy in the middle of a pandemic. Who knew? You knew it because you are part of an institution that supports you.
And we thank you for that.
We even have to look at those numbers. You might ask, well, how are we really doing? Never mind that year after year that you can test the you know, the wherewithal, the success of your Credit Union to a number of ways. And we test it in a number of ways. The first one we get an unmodified CPA opinion, you know, so, you know, so Clifton Larson Allen comes in and they take a look at what we're doing financially.
We had this audit opinion and it's presented on the website for you to look at. And if you look at it and you see a number say I don't understand what some of these numbers are, we have a great accounting and finance department you call them. They're happy to, to work with you to understand the numbers because transparency is extraordinarily important for a membership-owned organization. We get a regulatory exam on an annual basis from NCUA, which is the National Credit Union Administration. As a federal agency they come in once a year to waterboard us and make sure we are doing what we're supposed to do. They check us on compliance, on the share insurance, you know, issues they make sure that we're following the rules that the board gives us.
Making sure that we operated the institution in a safe and sound and prudent manner. And so it's a federal exam. We're not supposed to tell you the results of the exam, but the federal government said we own these results. You're not supposed to share it with the public or we don't want the public to have reliance on the federal government report.
It's a good report. So I'll say that much about it. How else might you think about us is membership satisfaction, and we do surveys, focus groups among you to tell us how are we doing. The final analysis is your perspective. How are we doing as an institution? Listen, if we ever disappoint you with something, give us a call and let us know. If you can think of a better way we can provide services for you, by all means, let us know. We are your institution. You are the best gauge of how well we are doing. Just by your own perspective, and your, your own experience with the Credit Union. Now let's talk about some really happy stuff. I want to announce that your Credit Union has formed a new foundation, the Local Foundation of North Carolina, and the reason why we formed this foundation is because you asked us to be more involved in the community.
So the foundation is a philanthropic arm of LGFCU. And, but it's your deeds in the community that inspired us. You see, there's a reason why is called Local Foundation. We want to celebrate what you are doing and your individual communities. We want to go to where the real work is happening in improving communities. And the Local Foundation will be sending out appeals and scurrying about to understand what it is that you are doing and how we can celebrate you, how we can support you and allow it, to empower you to do more what you do in the community.
That's the role of this foundation it's not for its own celebratory purposes. It's to help you serve your communities. So if you have a story to tell, something that you think that we should know about, we want to hear about it. So the foundation's going to be basically focused on four causes, four areas that we are going to be keenly fixated on.
How can we make a difference in these areas? The first one here that I'll mention is on hunger. I don't know how a human being, a student, a worker, a parent, somebody in a community, does their best if they're worrying about their next meal. And some of you in your communities and some of you because of your own work, you have, you have charities and you have organizations in your community that are addressing hunger for your citizens.
We want to celebrate you and we want to pour into you. The next one's on housing. There's something important about maintaining the dignity of a family or an individual when they say, I have a place to call home. And when you don't have something that just takes something a little something away from your soul. There are charities and foundations and organizations in the community that are addressing the homelessness problems and problems that some communities have.
We want to support you. In human services, you know, every now and then bad things happen to us as individuals and our families, our communities, and there are charities in your community that do things to support human services for your neighbors. We want to help them as well. And if you haven't looked around, there's an affordable housing challenge in North Carolina, and housing is one of the prime ways that a household creates and builds wealth for themselves, the kind of intergenerational wealth that moves from parents to children and so forth, to give the next generation a little bit of a head start on their lives.
And so because of the affordable housing challenge, some of you are working in that area and to the extent that we can support you and help you with that, we want to as well. So I want to talk a little bit about the first grant that that the foundation has given on behalf of LGFCU and this is the Chatham Trades is the name of the organization.
They received the $25,000 community grant from Local Foundation of North Carolina. Chatham Trades is a human services nonprofit organization dedicated to employment and training for intellectually and developmentally disabled adults in Chatham County. Our community grant will assist their participation in securing employment and help them accomplish personal development goals. The grant fund will also be used to provide transportation for participants to attend vocational training at Chatham Trades Human Services Hub.
This organization has remarkable relationships with other human services entities in Chatham County area, including Salvation Army, West Chatham Food Pantry, Chatham County government, Chatham Transit Authority and several businesses. This story is compelling. I love this story. I think you will too. They add value to the communities in ways that are absolutely remarkable. So here's a video highlighting the efforts of Chatham Trades.
Enjoy. The Local Foundation awards community grants to nonprofits across North Carolina, making a difference in their communities. We know that few organizations will change the course of history, but some organizations will absolutely change the course of people's lives. And that describes Chatham Trades, one of our inaugural community grant recipients. Chatham Trades is a community rehabilitation program that provides employment and training for adults with intellectual and developmental disabilities. Not only employment and training, but also skill development, social skills, peer skills, and just other skills that allow them to integrate as much as possible within the community. We have many companies that we do packaging and assembly for, so they actually learn how to count, how to assemble a package, seal up boxes. They learn how to work cohesively with their peers.
They learn how to accept supervision, learn about break times, lunchtimes, how to fix their own lunch, just general work skills, but also social skills and their interactions with each other and being respectful of each other. So it's more than just work. It's a total person development.
You come here and you spend some time with these consumers and the folks that work here, and you can't help but leave happy and energized by the stuff that they're doing here. Having an organization like this, for the folks to come to work and just live their lives in a normal way is just like you and I do in our jobs, it's just one of those things where you can't help but be satisfied and watching that. I'm a, I'm a part of something like this, and these people here are so in love with what they do. It's, it's to me, it's like one of the most rewarding things I think you could do.
Chatham Trades also contracts with Chatham Transit to provide the transportation for our consumers. The consumers are picked up from their residence and brought to Chatham Trades, and then back home at the end of the day. In a way, Chatham Transit Network was born out of agencies like Chatham Trades. They are required to provide transportation for their clients.
We've all got vehicles, we've all got drivers. What if we had one organization that provided the transportation for us? So that way it took that stress off of them and making sure they had the vehicle or the driver. And then when community transportation grants came through, Chatham Transit Network was formed. Another partnership that we have is with Chatham County with an electronic recycling program.
We certainly want to help the clients of Chatham Trades have more work to do that helps with their development and helps Chatham Trades become a stronger organization as well. But again, as I said, they're an integral part of our recycling program, really helps us to have that extra piece in contracting with them, really helps us continue to keep that program going.
I just want to say, as the president and on behalf of the board and Chatham Trades, how much we appreciate the Local Foundation of North Carolina for this great opportunity. It's support like that that continues to allow us to expand and grow and meet the needs of our consumers.
I would like to thank the Local Foundation of North Carolina for their generosity in this award and the opportunity that we were given to apply for this award and to be an inaugural recipient. This award will go a long way to serve the people of Chatham County.
So I'm trying to keep it together, and I'm not the only one. I was looking out at you and some of you were wiping your eyes. So, this is one of the charities that we're supporting and there will be more. There will be quarterly grants. We are investing in you and your community. What , we ask of you, as we put this on social media and we, we talk about Chatham Trades and other charities, put them in your LinkedIn feeds or Facebook or tweet about it.
Tell your friends about what the foundation is doing. Talk about these causes that are going on in your communities as well. Let's provide them as much love and support as we possibly can. We feel like our grant is really just a seed, and it's just the beginning of how the foundation can provide value to these causes.
Each year I provide you a snapshot. The faces change a little bit from time to time. These are my colleagues who work here at LGFCU. I am proud to be one of their teammates. I've had the privilege and the opportunity to have a conversation with every single person here coming into the organization. And I would ask the question in many instances, so as you're coming in LGFCU, what kind of career do you expect to have? And no one has ever said to me, Well, I'd like to have a dead end job. I'd like to be overlooked and I'd like to have a meaningless existence, and I just want to punch a few numbers here and there, or punch a clock and I don't want to add value. No one has ever said that to me. Everybody talks about service, the difference they want to make to the community, the love for their family, the things that are important to them. The mission of this organization. They talk about you, your communities, how we make a difference. That's the conversation we have.
The one thing you need to know about this group of folks here, and I've told you before. They are pigheaded. They're stubborn. They all don't always do what you ask them to do, because if anybody gets in their way, of serving you, they will run that person over. They don't believe nothing should stand in the way of this staff taking care of you.
That's why we hired them and that's why they're part of this team. That's why I'm so proud to serve with them. Final note, I want to make to you, as some of you already know, this is my last LGFCU Annual Meeting as your CEO. I'm being put out to pasture. No, I've announced my retirement. Now, before you start throwing confetti and celebrating, so we finally got rid of him, I have until the end of this year before I leave. And so there's still some work to do. But when I leave at the end of the year, it would be 43 and a half years in this business, 30 years here with LGFCU. Thank you.
I was doing so well trying to hold it together. Hmm. Thank you. I knew from age 12 this would be my life's occupation in financial services. Because my dad demanded of me at age 12, standing in a potato field, to make a decision on what my career would be going forward. Age 12, and I chose financial services.
What I didn't count on was all of you and the friendship and your support, your love that I didn't count on. That's the bonus for why, for what I get from this. So thank you to all of you.
We really change lives in North Carolina, and I hope you get that message from this report. We do make a difference to you and your neighbors. And your family members. That's why we do this. And so it's absolutely a delight to serve you in this capacity. Some of you have asked what am I going to do afterwards? Still trying to figure that out.
But the one thing it is my wife says I'm going to have fun whether I like it or not. So, so I don't know what's more fun than being here with you guys. So we have to figure that out going forward. So now comes my favorite part of my report and that is answering questions from you about your Credit Union.
Now, I'm going to step away from the podium here. I understand this mic is going to turn on, so you can still hear me. I'm going to get closer to you. Now, remember, I'm a lame duck. I'm a loose cannon, so I might say anything. So be judicious about your questions. So, does anybody have a question for me?
We have roaming microphones. If you do, I'll be happy to do my best to answer your question. We have a hand right here.
Here. The microphone is not on?
Check one two, mic one two. Yes. There we go. Yeah, there you go. Hi. Is it possible to go back several slides to the actual scale piece? I took a picture of one I wanted to ask a specific question around, let's see some of the returns that you were talking about. Yeah. And so I need to see the chart. Go back.
Yeah that one.
No, not that far back. Slide two. Right.
Turned it off.
For numero dos.
Something you should know. OK, go. Here we go.
OK. One more.
Actually, I'm tech support for the office.
So no, no. Oh, yeah. That's great, in conjunction to comparison to other CDFIs that are in the same portfolio bracket. So my question specifically is around the data. So, where the provision for losses are showing the negative 1.9. And then when you compare it to the return on assets. My, my specific thought here is, is there another measurement in between when you're looking at other groups to say, because we made this provision at this level, we were able to convert those potential losses into assets, like another leverage point.
Oh, yeah. Because for me, the way I process data, I'm like, that piece is missing. Sorry, I don't mean to tell you that, but.
My feelings are hurt now.
So if I understand your question, there's a story to be told between provision for loan losses and a return on assets. And I think you're absolutely right. So there's some accounting and finance people here right now that's probably writing notes on how we can sort of articulate that for you. There is a story, because the fact that we put aside provision for loan losses, that extra reserves, that gives us an appetite.
We as a management team can go to the board and say we want to loan more. More often is the other way around. The board tells us we are going to loan more. We have an appetite for it because we have reserves that prepares us for the potential losses that might arise. So when those losses come in as charge-offs and is higher than peers, our board is not bothered by that because they say we budgeted for this.
We're not going to turn our backs on our members. Now, is there a way to quantify what that additional lending means to us on our bottom line? I think there is. I don't have that number at the top of my head, but I think there is so thank you for your question. Somebody can probably tap you on the shoulder before it is over with, but we can get information from you to make sure we answer that question, because it's important to you, it's important to everybody else. It's an astute point, because when you think about financial institutions, there's something called opportunity cost. If I invest money in here, the cost of it is where else could I have invested the money? So we put money in the provision for loan losses. The the cost of that is what loans would we have lost in the meantime had we not made those loans?
Yes, we should be able to quantify that for you. That's a good point. You keep talking like that. You'll end up on a committee around here. So and that's going to be your punishment for coming up with good questions.
Keep it up. Do we have another question from anyone? Don't be shy. Don't be shy. You all want to let me off easy. On my last . . . , here we go OK.
So mine is not necessarily a question.
But thank you so much for your years of service and we appreciate that so much. But we also want to extend our appreciation to your wife for sharing you all those years, supporting you in that job and being there for you every day. Thank you for sharing him with us.
She's happy to get me out of the house. It's gonna be her problem later when I'm hanging around the house. Thank you for your kind comment. This work, of working in a cooperative, finance and the Credit Union is really a family endeavor. And it requires long hours and requires some travel. She may tell you I work weekends as well, and probably most nights because this is important work.
But what this Credit Union has also done, this career has done, it's actually in my wife has created a monster, She is a zealot about Credit Union principles and so forth. And so I'm sitting at my desk at home and working on a proposal or something to take to the board a member of I'm writing and she's looking over my shoulder.
This is Credit Union stuff here. I know you're not going to propose that. I know you're not going to say that. This is my Credit Union. Wait a minute. So I'm getting scrutinized at home. I have my own Supervisory Committee at home as well. So, thank you for your remarks. We have another question here. Second question to have twofold.
One, what do you, what's next? We've talked about all our successes to this point. So what do you really see as our next growth opportunity as we move into next year?
Oh, great question.
I want this institution and all institutions for that matter, to get off of this hamster wheel that rotates between economic cycles. We just, so 43 years, I just came to my fifth recession in my career. We know what, whether it's a dot-com bust, a real estate bust, or whether it's an oil embargo or a pandemic, these recessions come about in different ways.
They react about the same in terms of who gets hurt in the community. So we know who gets hurt in the community. It's the same population that was hurt from the last recession. Now, if history is any guide to us, another recession is coming, and it's coming in the year 2028. That's just historical averages. They roll around every seven years or so.
So we know another recession is coming. We know who gets hurt. It would be a doggone shame if the same communities get hurt that we know are going to get hurt. So our job as an institution, in particular, credit unions owned by the membership as a cooperative, is determined to help lift up people and really fight poverty and build wealth in your community.
Our determination is we have a little bit of a runway to do something about it. What are we going to do about the kind of persistent poverty that grips families and communities? That's what we are supposed to do. And so you're going to hear more about Stride, a financial management company, financial wellness company that we've created that's going to be presented to you.
I board holds our feet to the fire. What are we going to do about the next recession? We know who gets hurt. It's the same people who were hurt in the last one. Doggone it, let's not let them get hurt again. It is our responsibility to do something about it. And to your question about what do we see for the future?
Once and for all, let's break the cycle of communities that we know are going to get hurt in the next recession. Let's break this cycle once and for all and do something about it today to help them live a better life going forward. I love your question. Thank you, sir. Y'all gonna get me on my soapbox. You're not going to get out here till lunchtime.
Good morning. I just want to say, just so appreciate your leadership, your erudite leadership. I'm going to cry when I see you next week. But my question is, can you talk a little bit about the shift to the credit-based lending? The reason behind that and how that will affect the end user, the member?
Are you talking about pricing loans using credit scores?
OK. So there's two ways to price loans. For the uninitiated, let's talk a little bit about it. There's two ways to price loans. One way is these equal or egalitarian approach that we've often talk about. If you get an automobile loan or home equity loan, or whatever kind of loan you get from us, every member pays the same interest rate, but every member doesn't represent the same risk to the organization.
The reference here is risk-based pricing, and with risk-based pricing we go in and we charge an interest rate based on your credit score, the risk you represent to the organization. Now, this rate that we have, this new system of charging rates, is actually what 99% of financial institutions do. So we as a management team present this to our board of directors, who by the way, raked us over the coals about it, to make sure that what we offer to you is going to be the very best rates for you and give you the best opportunity to get the, you know, an affordable price loan from us.
Now, this is way more than you want to know. As you think about the various credit scores the individuals might have, they have broken up into these various grades is called A paper, B paper, C paper, and, you know, down to E paper and depending on what your credit score is and what section, what silo you fall in, and that determines what your interest rate is going to be.
Most institutions have fairly narrow bands on what they charge you for the rate. We have broadened that to give our members the advantages of the best possible rate we can give you for those particular areas, whatever your credit score happens to be. Then we committed ourselves that whatever credit score you have, that we are going to work hard to help you improve it so that you can get better pricing from the Credit Union, from your auto creditors, from perhaps insurance premiums that you have from utilities or any other services that you might have, might might be for rent as well.
How can we improve upon that also for you? The final note I'll make on that is that the way that we have priced our loans, we are really, really, really good deal for individuals who have C and D paper, have lower credit scores. But we're not very competitive on people who have A paper, who have the very best credit scores, because we focus so much here. What we are now trying to do is just sort of balance the scales a little bit.
So individuals who have A paper will get a little better rate, individuals who have credit scores that really should be improved, we're going to work with you to improve your scores to get you as close to A paper as we possibly can. It's a different way of thinking about equality in a financial cooperative, but we are working on the mathematics for it. The board met and talked about this yesterday, had more questions for us.
We are going to be rolling this out sometime soon. We demand of you to demand of us accountability and anything we present to you that you feel like, wait a minute, this doesn't seem fair to a particular segment of the population or not, we want to hear from you. That's the only way a cooperative should work ,that you a part of the population is feeding back to us the insight we need to make sure the decisions we are making to you are fair for all of you. Does that answer your question? It's my pleasure.
Maybe more a little bit more in the weeds than you wanted. But you deserve full transparency from your cooperative. A hand just went up, OK Crystal in the back there. Hey, Dale.
I was wondering, you mentioned Stride. I was thought it might be helpful if just a 50,000-foot level, if you talk a little bit about Member Enterprise and how all of that's coming together to create synergy, that's going to help us to be proactive when that next recession comes.
Thank you for your question. We have, have built around Local Government Federal Credit Union and Civic credit union this new entity called Member Enterprise. And the reason why we've done so is to be able to offer more services to you and local government. Back up a little bit and explain what I mean by that, every organization that goes to government, to state or federal government and asks for a license to operate, has limited powers. It doesn't matter whether you're a bank or credit union, a petroleum company, a pharmaceutical company or an automobile manufacturer, airline, you go to government, you say, may I have a license to operate? They are handed to you and you are restricted to certain kinds of activities. There's no exception for credit unions. So, we have this box we have to operate in within LGFCU.
But you have told us that you have needs that sit outside that box. So when your board heard about the needs that you have, that sit outside that box, the board had a choice. They could ignore your needs. They could go to government and say will you give us a bigger box, and we do from time to time, or we can create other boxes outside that box that serve, that pinpoints and serves your needs. Member Enterprise, if you think about it, it's sort of like a holding company that sits underneath the Credit Union that's going to allow us to diversify the activities and the services that we offer to you, that might sit outside the credit union box, but they're designed for the specific purposes of serving your individual needs.
This is relatively unprecedented thinking for a financial institution from credit unions, from it, from that respect, that we are going to stretch our ability to serve you. Now, it would be safe from a management standpoint if we sort of stayed in our corner and we just continue making loans and paying dividends on deposits and doing what we always do because there's success in doing that, you see that from some statistics, but it feels negligent to know that you and your colleagues and your neighbors have financial needs that we think that we can actually play a role in addressing. Your board is saying we're going to do something about that, and we've created this new corporation that's going to have other activities coming underneath that. I can't wait to see what you're going to think about that when we start unveiling that to you. I want your communities and your colleagues at work, your family members to get excited about what LGFCU, Member Enterprise and our family of companies are going to do for you. It's going to be good stuff.
So hold on to your hat. It's coming. Do I see another hand? Yes, ma'am.
Yeah, thanks. I have two short questions. One follow-up to what you just said. So are the additional enterprises also cooperative, cooperatively owned? They are owned by you, the members of this Credit Union. So we're not going to create anything that Wall Street comes in and says, that's mine. No, no, no, it's owned by you.
Thank you. And then my other question is, I really appreciate you exploring and going into the credit layers. I think my primary question is yes, thank you for solving the A-level needs and problems. One of the things that I find that most financial institutions avoid or ignore is the reality that a lot of African Americans, LatinX families and other types of families end up supporting multiple generations, which ultimately has an impact on income and credit.
Because when you yourself are the bank to multiple layers of generations, it shifts. And that's it's a cultural thing. And it happens in many pockets in North Carolina and many communities. So what is the Credit Union? Because there isn't another. And with the initiatives that are moving forward, there needs to be a focus. I'm a little passionate. You can see that. A little pushy, a little passionate.
It's all good. Where is the emphasis and focus on really accounting for whether it's in the credit metrics or additional products, not just learning products? Because if you're becoming the bank yourself, you don't necessarily need additional financial wherewithal in terms of acumen. What's happening there? And thank you for allowing me to be so emphatic.
You're pushing this is a high compliment to us because you wouldn't have stood up, you wouldn't have taken the mic and you wouldn't have made a point if you didn't have confidence that we would address it head on. Thank you for that. So one of the one of the reports your board receives every year is a fair lending report.
And the fair lending report looks at essentially what it says, are we fair in our lending services fair to the entire community of local government. We look at geography, look at various demographic fields like race, ethnicity, those are the data points I think we collect the most. Our general counsel is in here someplace probably telling me I'm missing a few points.
But what we look at is and making sure there's no disparate treatment, that is, we have what appears on the face to be a benign transact, a benign policy that affects everybody perhaps equally. But the effect of the policy is treating some groups and some populations unfairly. So sometimes you have to go to the policy, say let's make some adjustments, though good intentions exist, it's having this negative consequence on a population over here. So part of the fair lending is to sort of ferret out that kind of data. Are we treating anybody, people from the western part of the state or the eastern part, are we treat them differently? People who live in smaller community versus urban, are we treating them differently? People who have different ethnic backgrounds, are we treating them differently?
And if we are, it is incumbent upon us to go in and not just look at what regulations and what Washington is telling us to do. Is it fair for the membership for this policy to exist the way it does? Your board examines those numbers on an annual basis to make sure that we are providing as fair service as we possibly can to everybody.
That's an interesting point. I hadn't thought about being the bank for your family, what that looks like. Part of our path of being on this journey of financial wellness and helping members make the best financial choices for themselves, whether it is choosing an investment that's consistent with your retirement needs, or how do I have enough to feed my children this week, we run the spectrum, how do we provide a platform of education and tools to help you do that? If you are the bank for your family, then maybe we ought to figure out a way to provide you some banking tools to help the family, or how can we help other individuals in various situations? When you're having your kitchen table conversations at 9 o'clock at night and trying to make financial decisions for your family, we want the Credit Union to be a partner with you in that and it includes a fair lending piece, the tools you get, the education and everything else that we can think about. Keep being pushy. I like that.
Maurice just wanted to point out, like in city government, we put so much emphasis on the succession plan and I'm excited that you get to retire, but you leave enormous shoes to fill. What is the succession plan and what should we expect as far as your replacement?
Good question. So the board is already actively engaged in a search process for a new CEO. And so they, they have a number of candidates. They're having conversations with them about this. Trust me that your new CEO is going to share your values. So, I know this board fairly well. You think staff is pigheaded. They would not put anybody before you that doesn't have your best interests in mind and heart and is also qualified to do this job. This is, this is, this is not a solitary job. It's a team sport. And so being able to help be good stewards of the resources that you as members have provided to us as a Credit Union requires a whole team of people that you see here.
Requires this board and requires the volunteers who come here. Advisory Council, Supervisory Committee, Loan Review Committee. Those, everybody's pulling in together to make this organization as successful as it is. And so the search process has begun. Have no, no notion to be able to say when that announcement will be made. But it is they are actively engaged in it.
Thank you for your remarks. Very well.
And is there another, please. Absolutely.
So I saw hand go up over there too Crystal. Good morning.
So to follow up with that question, my question is, I'm a dual member with SECU and Local Government, and I know that they just have a new president, CEO. So I'm just wondering, is that going to change our relationship with SECU?
If it does, I'm going to bop him in the nose. All right. Got some fighters in here. Good. The relationship with State Employees like any other vendor relationship we have with anybody else to provide, I don't think this is hyperbole, there's probably hundreds of vendors we deal with at LGFCU providing services to you, they are probably the most important vendor of course, and they've got some things they have their own strategic plans and what they're working on there, and it ebbs and flows over the years as they change. What we do share with State Employees is this love for this state and these cooperative principles that we as credit unions that members come first, but sometimes techniques and sometimes our processes are a little bit different. We, we work that out and we meet on a regular basis.
We have the conversations about what are they working on, things that we would like to work on that we share with them. Sometimes we go back and forth. So I think that collaboration will continue. We'll continue to have conversations and we will continue to pay attention to what they are doing going forward and how it aligns with you.
The fiduciary responsibility of your board and the management team here is to have a duty of loyalty, that's in the law. The focus that on decisions that we make here, why it factors in State Employees' Credit Union and factors in NCUA and factors in what other people are doing, is fixated just on you. What do you need from us?
And every decision going forward is going to be locked in just on what, how it serves the community. Great question. Thank you.
Good morning. Am I on? You are. I don't really have a question. I have a comment. The Credit Union, Local Government Federal Credit Union, has been awesome. It is. It's awesome. Prior to becoming a volunteer, of course, I was a member of the Credit Union. And, you know, I told my family and I just told everyone how wonderful it was.
And going back to credit, credit scores and lending, the, the Credit Union, I just want to say thank you because it has offered so many people that I know the opportunity to buy homes and vehicles that other lenders would not have allowed them to you know, they wouldn't have given them a mortgage or they would have had much higher rates on vehicle loans and, and it, and thank you for the 30-Year Mortgage that that I've had several, I've had several people say you know that was just just great. But really I don't have a question.
I just wanted to say, you know, that the Credit Union has the structure and everything has just been awesome and it has helped so many people that I know in my personal life to be able to accomplish their goals.
Thank you. Thank you for your remark. We work very hard to take care of your needs, but it's a symbiotic relationship because we count on you to feed into us what it is we need to provide for you. How many times have we heard from you over the years past, we want a 30-year fixed-rate mortgage loan, and we figured it out and we figured out how to scale it.
And also how to be able to provide it in a humane way going forward, regardless of what the market rates are going to be doing. But you were patient with us as we figured it out and did it in a smart way. So we're happy to provide that services for you. I think I saw a mic go on. Yes, ma'am.
Thank you, Maurice, for your service. I think we met probably when you were just starting. And, you know, I count it a pleasure to have known you and seen your development all these years. And we certainly wish you the best as you get ready to ride off into the sunset a little bit. I have a question about Civic.
I remember when we sort of described it at one of these meetings a couple of years ago, I would just kind of like to hear maybe a high level, how is it doing? Is it performing the way we expected, and what more can we do to assist? Thank you.
Good question. So Civic had its annual meeting yesterday and is doing well, is performing as we expected it to. You know, standing up a brand-new financial institution, I think when we would chartered it, Civic for North Carolina, it was the first brand new de novo financial institution in about ten or 12 years. So it's been a while. Regulators are a little bit out of practice with it. When you create a new institution regulators put handcuffs on it because they want to make sure that you really know what you're doing.
Last year they took the handcuffs off. We proved we know what we're doing. And so now we are ready. We are in scale mode with Civic. What that means is if anybody in this room is not a member of Civic, we want you to go in and kick the tires and test it because you said, we want an institution that offers commercial services, organizational services. You said we want best in breed and mobile services. You said we want different products and different things offered to you. And Civic is something that we control. You control directly as members as to what that looks like. So I'm hoping by the end of the day, the Civic folks want to tell me there's been a spike in website activity because all of you are going in saying, let's see what this offers. For members who want a certain level of service, a certain kind of service, LGFCU is there for you. It's strong, it's available for you. But Civic is a new generation of financial services. And as you look at the television Super Bowl ads, you see, you hear about these different kind of fancy, you know, financial institutions that are coming along to offer you all kinds of promises. Most of them are not financial institutions.
They are either a brand of a financial institution, or they're what we call fintech organizations that warehouse your money but it's not insured. It's just a fancy technology company offering something that looks like financial services. Because we've looked under the hood to determine it's not a bank and it's not a credit union. It's something else. To me it inherits some risk and we're doing business with that company.
I won't call them out but if you see me after the meeting, I might name a few. Civic is a bona fide financial institution that has the wherewithal and the power of any of the financial technology companies that you might see, but also has the safety and regulation and compliance of a financial institution. And as you think about, if you want to sort of juxtapose Civic to LGFCU from a personality standpoint, LGFCU is a little bit older, a little more, you know, set in its ways. Civic is that teenager that says anything is possible. You want to be ready in 2028 when the next recession comes along and you don't like the way you performed in the last recessions. And you say, I need different tools to help me think about this. Compare LGFCU and Civic and various tools available for you. One thing I've learned about this board is they would not give up on exploring options to serve you and your communities, and Civic is one way that we go about doing that. And not seeing the mic pass around, not see anybody standing up, no one drawing back a beer bottle.
So I'm thinking we are good. Thank you all for your time, your attention, your cooperation here. All right. Thank you.
Thank you, Maurice. As always, it was a wonderful report. But as you heard, Maurice has announced his retirement. The the success of the Credit Union is a tribute to Maurice's wonderful leadership. Many of the ideas he gives the board credit, but it's Maurice that brings those ideas and then we vet them. And so a lot of the things that you've seen have come from him, and I give him a lot of credit for that.
I hope you'll join me in giving Maurice one more round of applause for his amazing leadership.
Maurice, we'll miss you, but you're always welcome. Rest assured that the Board of Directors is already working to identify Maurice's successor, and notice that I said successor because we can know we can never replace him in any way. Is there any new business to come before the membership today?
Seeing none. Is there any old business? None. Just a couple of announcements. Does anyone have an announcement from the membership? Seeing none, I would like to recognize Mark Caverly, who is the president of Local Government Federal Credit Union, and all the other dedicated employees. And I would ask it, would the employees please stand? Employees, please stand.
And also, I'd like to give a special thank you to the employees that work to make this event such a success. We were here yesterday having meetings, and it was like a beehive, I can assure you. Let's give them a round of applause if you would, please. Seeing no further business, thank you for being a part of the 39th Annual Meeting, and I now declare that the business meeting is adjourned.