Statements of Income Years Ended December 31, 2018 and 2017. (Dollars in Thousands) Interest Income: 2018 2017 Interest on loans to members $ 142,471 $ 114,019 Interest on securities and cash equivalents 42,379 30,381 Total Interest Income $ 184,850 $ 144,400 Interest Expense: Dividends on members’ accounts $ 58,051 $ 32,911 Net Interest Income 126,799 1 1 1 ,489 Provision for loan losses 1,500 1,500 Net interest income after provision for loan losses $ 125,299 $ 109,989 Non-Interest Income: Non-interest income $ 40,288 $ 36,779 Total Income $ 165,587 $ 146,768 Non-Interest Expense: Compensation and benefits $ 58,646 $ 51,051 Office occupancy 10,338 9,151 Office operations 12,297 9,969 Professional and outside services 2,166 1,783 Credit/Debit and share draft program expenses 6,664 5,569 Other 30,828 29,186 Total Non-Interest Expense $ 120,939 $ 106,709 NCUSIF Corporate Stabilization Expense $ 0 $ (402) Net Income $ 44,648 $ 40,461 Supervisory Committee’s Report “The Times They Are a Changing” The song by Bob Dylan in the 1960’s still applies today. I have been a volunteer on the Supervisory Committee for the past 20 years and I am about to note some of the many changes that have occurred to the Credit Union universe and TFCU. • In 1999 there were 10,628 Federally Insured Credit Unions. • In 2019 there are 5,375 Federally Insured Credit Unions (FICU). • In 1999 FICU had 75.3 million members with assets of $357 billion, and loans totaling $271.5 billion. • In 2019 FICU had 116.2 million members with assets of $1.45 trillion and loans totaling $1 trillion. • In 1999 TFCU had total assets of $830 million, membership totaled 99,000, and the number of branches totaled 8. • In 2019 TFCU has total assets of $7.2 billion, membership totaling 329,000, and the number of branches total 31. James F. Nohe Chairman • In 1999 TFCU field of membership was Suffolk County-limited townships and Nassau County. • In 2019 TFCU field of membership is the United States of America. • In 1999 TFCU’s methods of banking included retail store fronts, call center, online through dial-up connections, physical check issuance, debit cards for access to account information and ATMs. • In 2019 TFCU’s methods of banking include retail store fronts, call center, online bill payment, Automated Clearing House (ACH) transactions, mobile banking, debit cards (to make purchases as well as for use at ATMs and in branch transactions), mobile check deposit, Check 21 Regulations – same day and next day availability of checks and processing of checks electronically as opposed to physical delivery, and ITMs (Interactive Teller Machines). • In 1999 TFCU’s Regulatory & Compliance Risk statutes BSA/AML (new), Sanctions. • In 2019 TFCU’s Regulatory & Compliance Risk statutes BSA/ AML (expanded), Sanctions (expanded), USA Patriot Act, Right to Financial Privacy, Regulation CC Check 21 implementation, and Consumer Financial Protection Bureau (CFPB) established. • In 1999 topics of concern included Y2K and IT Issues. • In 2019 Topics of concern include identity theft, human trafficking, state-sponsored terrorism, terrorist financing, hacking and penetration of IT systems, including denial of service attacks. I have spent ten of the last twenty years as Chairman of the Supervisory Committee, and during that time the risks to banks, credit unions, and TFCU has increased exponentially, yet the role of the committee has not changed. Some of the responsibilities of the Supervisory Committee include: • Ensure that the Credit Union is in full compliance with National Credit Union Administration (NCUA) regulations with all relevant laws and regulations. • Ensure that a complete and thorough audit of the Credit Union’s records and operations, including verification of member loans and share accounts is conducted at least once a year. • Ensure that all necessary written audits and work papers are submitted to regulatory agencies in a timely fashion. • Ensure that adequate internal controls are established and effectively maintained to safeguard the Credit Union’s assets. I am pleased to report that TFCU has continued its high standard of compliance. The balance sheets and related statements of income are presented accurately. Members can rest assured knowing the credit union’s financial performance and operations are regularly evaluated for continued safety and soundness. We, the committee, wish to express our appreciation to the Board of Directors, management, and staff for their continued cooperation and support. We look forward to the pleasure of serving you in 2019. In conclusion, speaking for the Supervisory Committee and myself as Chairman, we would like to thank Mr. Allen for his insight, expertise, and knowledge. Over the years we haven’t always agreed, but we always reached a resolution, and that’s the way it is supposed to work. We wish you only the very best in your retirement! Supervisory Committee’s Report (continued)
