Letter to Our Members

Colin Baxter, Chairman of the Board and James Wileman, President/CEO

As Credit Union 1 embraces a new year of leading change, uplifting others and valuing people across Alaska, we do so in a particularly unique time for our state and world. The COVID-19 events of 2020 challenged Alaska’s economy and tested many families’ financial wellbeing. But as always, in times of challenge, Credit Union 1 has stepped up to show that our core commitment to serving those in need is unwavering.

When Alaskans need us most, we remain true to the credit union philosophy of “people helping people.” This philosophy has been the guiding light in everything we represent and everything we continue to do! Through the good times and the tough times alike, we live our mission to help our members achieve their financial goals by focusing on excellent service and value.

Lending money is the most impactful way that Credit Union 1 helps Alaskans weather difficult times. In 2020, the historically low interest rate environment provided an opportunity for our members to refinance their mortgages and free up much-needed funds – or finance the purchase of their dream home! We were right there beside these members with a helping hand, originating a record setting $97.7 million in real estate loans last year. Our real estate loan portfolio experienced year over year growth of $26.3 million or 7.8%.

While our credit union is proud to lend money toward Alaskans’ life goals and provide a safe and secure location for your deposits, we’re also here to assist when times get tough. In 2020, Credit Union 1 had a tremendous opportunity to assist members by returning $707 thousand in member fees in response to the COVID-19 pandemic. This is just a small example of the power of a member-owned credit union! We also had the opportunity to help get COVID-19 relief funds to small businesses across Alaska by serving as a program operator for the AK CARES program. During this time, we distributed 2,006 grants for a total of $84.2 million on behalf of the State of Alaska. We were honored to rally with small businesses to help navigate the challenging economic times of COVID-19.

In 2020, our Member Assistance team continued to take outstanding measures to support Alaskans who have encountered financial struggles. This was more important than ever last year, when we assisted members impacted by COVID-19 with 4,643 loan "skip payments," skipping payments of $1,859,580 and keeping that money in our members’ pockets instead. These impacted members benefited from hanging on to their assets during a time of uncertainty and then picking up their regular payments shortly thereafter. We are happy to share that many members who took advantage of this skip-a-payment opportunity are back to making regular payments.

Considering the events of 2020, we are also thankful to continue to have a low ratio of delinquent loans in our portfolio – namely, 0.63% as of December 31, 2020 when excluding loans in COVID-19 forbearance. Loan net charge-offs as a percentage of average outstanding loans was 0.12% in 2020, which is a decrease from 2019. Total net charge offs decreased 62.4% from the previous year, which highlights a unique commitment to preserving our members’ financial health in difficult times.

The CU1 Rewards program was retired in 2020, and a timeline was announced for our members to redeem their remaining points. In light of this announcement, overall reward points redemptions increased by 3.28% during the year. Members will have until the end of 2021 to redeem their remaining points, with an extension to the first quarter of 2022 for those with points balances of 119,800+. The CU1 Rewards program was a hit with our members for many years, but we are proud to now offer market-leading interest rates on loans and deposits without members having to cash in points. This is yet another perk of being a member of Credit Union 1!

Financial Center South

In the year ahead, we have so many exciting things to share – not least of which is an innovative and exceptional new Financial Center South that will be opening where our former South Anchorage Branch once stood. We’re also thrilled to finally unveil a mobile branch that is ready to travel statewide for your financial needs. Our membership continues to grow, and we continue to improve and reimagine the ways we serve our fellow Alaskans.

Supervisory Committee Report

Credit Union 1’s Supervisory Committee (the “Committee”) is appointed by our Board of Directors and is responsible for ensuring the financial statements of the credit union are accurately and fairly presented by management. The Committee has the responsibility of providing an independent appraisal of the safety and soundness of the activities of the credit union to ensure that operational practices and procedures are sufficient to safeguard our members’ assets. These duties are required by federal and state regulations. The Committee also assists Credit Union 1’s Board of Directors in fulfilling its oversight. State of Alaska statutes summarize the Committee’s responsibilities as follows:

"The Supervisory Committee shall conduct an annual audit of the accounts of the credit union and submit a report of the audit to the Board of Directors and a summary of the audit to members at the next annual members’ meeting of the credit union. The Supervisory Committee may conduct supplementary audits as it considers necessary or as ordered by the commissioner and submit reports of the supplemental audits to the Board of Directors."

In carrying out this responsibility, the Committee i) oversees the Internal Audit Function, which reports to the Committee; ii) monitors the policies established by the Board of Directors and ensures compliance with them; iii) evaluates the adequacy and effectiveness of the system of internal controls established by Credit Union 1 management; and iv) investigates and responds to written member inquiries referred to the Committee. The Committee appoints an independent certified public accounting firm and reviews the policies and procedures for the audit engagement, including its scope, fees, and auditor independence matters. The Committee itself does not prepare financial statements or perform audits, and its members are not the certifiers or auditors of Credit Union 1 financial statements.

The Committee engaged the independent certified public accounting firm of CliftonLarsonAllen LLP to render an opinion as to whether the Credit Union 1 financial statements for the period January 1, 2020 through December 31, 2020 are fairly presented in all material respects. CliftonLarsonAllen LLP completed their audit, which was performed in accordance with generally accepted auditing standards, and issued an unqualified opinion.

The Committee reviewed and discussed Credit Union 1’s 2020 audited financial statements with CliftonLarsonAllen LLP, the credit union’s President/CEO James Wileman and Chief Financial Officer Chad Bostick. The Committee believes that appropriate internal controls are in place at Credit Union 1 and that the 2020 financial statements accurately reflect the strong financial position of this credit union.

Corporate Social Responsibility Report

In 2020, Credit Union 1 members and employees rallied together in the midst of a pandemic to fundraise, donate and volunteer across Alaska for the benefit of our neighbors in need.

Last year, we also introduced a newly enhanced Corporate Social Responsibility (CSR) program. As leaders in our state and industry, this program positions us to make a more impactful philanthropic difference in Alaska. As we were planning our 2020 reveal of this enhanced program, the world was experiencing an ever-evolving global pandemic. In this unprecedented time, our CSR team learned and adapted, and we quickly refocused our efforts on Alaskans impacted by COVID-19.

Community Impact

We fundraised over $61,000 last year for various organizations across the state, and we also created internal opportunities for employees to volunteer for a total of 910 hours. Over 25,000 items were donated throughout the year – from hygiene products for women and girls, to food and meal kits for hungry Alaskans, to donations to the Food Bank and much-needed clothing items for emergency shelter residents.

Environmental Impact

In July 2020, we successfully implemented a more extensive recycling plan at our branches and headquarters. In six short months we were able to divert almost 17 tons of comingled materials from our landfill.

Economic Impact

Our legacy and commitment to caring for people and our communities continued in 2020 as we donated $65,000 to various nonprofits and small businesses across the state. We awarded $19,500 to 17 deserving students through the Bill Countryman Scholarship program. The #CU1Foodie Challenge was born to help support small, local, restaurants and food trucks across the state during the shutdowns caused by COVID-19.

Employee Impact

As one of the top employers of Alaskans, we strive to enrich our employees’ experiences beyond the scope of training and job performance, to build long-lasting careers and always put people first. However, due to the pandemic, we further pivoted our employee efforts in 2020 by keeping the CU1 team engaged and connected to each other via virtual activities, games and relationship-building.

True corporate social responsibility is achieved through the efforts of every employee and member of our organization. Together, we look forward to further empowering, educating and enriching the lives of our fellow Alaskans in the coming year.

Treasurer’s Report

Jennifer Bernard, Treasurer

As of December 31, 2020, Credit Union 1’s total assets had grown to $1,293,913,722. This growth corresponded with an increase in member deposits to $1,124,596,535. The 20.8% member deposit growth was driven by traditional deposit growth in combination with COVID-19 economic stimulus relief received by members and remaining on deposit.

Net income for the 12 months that ended December 31, 2020 was $6.529 million. As a member-owned financial cooperative, 100% of this income is recycled toward lower loan interest rates, higher dividends, enhanced services and fewer fees for our Credit Union 1 members.

Income earned by a financial institution is measured as a percentage of total assets. For the 12 months that ended December 31, 2020, Credit Union 1’s return on average assets was 0.54%. These earnings have helped build equity within the institution and secure our ability to serve the long-term needs of our members. Equity also insulates and protects the credit union during periods of economic downturn, so that we can best serve our members when they experience difficult financial times. When local and national economies fluctuate, our credit union is well-positioned to navigate these changes while providing the financial support that our members rely on in times of need.

At the end of 2020, the credit union’s equity (or “capital”) was 11.36% of total assets, as reported in our audited financial statements. As such, Credit Union 1 is designated as “well-capitalized” by the National Credit Union Administration (NCUA). Credit Union 1 members directly benefit from this designation because it allows us to enhance services, upgrade facilities, maintain a strong workforce and expand our lending ability in support of Alaskans statewide.

Financial Statement

(audited in thousands)

Board of Directors

  • Colin Baxter, Chair
  • Steve Cavin, Vice Chair
  • Marietta “Ed” Hall, Secretary
  • Jennifer Bernard, Treasurer
  • Joe Towslee, Director
  • Andre Horton, Director
  • Yuliya Mitchell, Director

Supervisory Committee

  • Jeff Wood, Chair
  • Ross Risvold, Secretary
  • Vincent Schmoyer, Member

Executive Management

  • James Wileman, President/CEO
  • Rachel Langtry, Chief Operating Officer
  • Chad Bostick, Chief Financial Officer
  • Davina Napier, Chief Lending Officer
  • Mark Burgess, Chief Technology Officer