Chairman’s Report
2021 was another transformational year for Frontwave Credit Union. Following on the heels of 2020, when our attention was on adapting to the unique challenges of serving the Membership through a pandemic, 2021 provided us an opportunity to recalibrate and look toward the future. We focused on how to better serve our Members, not just in the moment, but for years to come. At the same time, the rise of inflation in 2021 reminded us of our core goal: to provide a full suite of financial products and services with exceptional value to the Membership. With this in mind, Frontwave has committed to a digital-first strategy to better serve our diverse Membership regardless of where they live, work, or are stationed. This digital-first strategy aims to make digital transactions seamless and easy, and fully complements our improved lending infrastructure, which can deliver Members everything from a VA mortgage loan to a rewards credit card. To support this strategy, Frontwave created a new Process Excellence Team in 2021 solely focused on improving the quality of all Member services.
Frontwave Credit Union is now the Official Credit Union of the San Diego Sockers, helping us better share our message of service and value with the community. At the end of 2021, Frontwave Credit Union’s Membership now stands at more than 117,000 strong. Throughout the year, we continued to grow and outpace our competitors. For example, we grew our Membership 5.3%, outperforming the industry average of 3.5%. We also grew our assets 8.79% (compared to peer
We became the Official Credit Union of the San Diego Sockers in 2021, and a primary sponsor of their 2021-2022 season.
average of -0.12%), exceeding our goals and strengthening our credit union’s financial condition.
We were honored to be presented the Distinguished Credit Union of the Year award by the Department of the Navy, and to be named San Diego’s Best Credit Union by the San Diego Reader as well as Best Bank in the Morongo Basin by the Hi-Desert Readers’ Choice Poll. We are excited for the future and to continue to help fulfill the financial dreams of our Members. Our team is known as “Dream Makers.” So, for 2022, keep dreaming big. We got you! Michael Brigagliano Chairman of the Board
In addition to expanding our focus on digital, we also expanded our support for the community and the military in 2021. We held 58 financial workshops and provided over 44,000 hours of financial education to our Members. Working side by side with Marines from Camp Pendleton and 29 Palms, we supported over 42,000 Service Members and their families in 2021, distributing food and Christmas gifts to those in need. And as part of our community development,
Through our partnership with the ASYMCA, we helped provide Christmas gifts for 4,657 individuals.
We received the Department of Navy’s Distinguished Credit Union of the Year award, adding to our honors 2014, 2015, 2015, 2016 and 2017.
Treasurer’s Report
Although a second year of the pandemic created challenges, Frontwave Credit Union finished the year financially strong. Assets continued to grow year over year; total assets increased $95 million or 8.79% over 2020. Supply chain issues and the uncertainty of the pandemic had people hold on to their funds, driving down the demand for auto loans. We saw a 10.15% or $18.7 million decrease in the direct and indirect auto loan portfolios. The real estate loan portfolio experienced respectable growth of 6.43% or $22.2 million for the year. Overall we saw a 1.85% or $12 million decline in total loans. Deposit growth in 2021 was much more sedate than the stimulus enhanced deposit growth in 2020, yet remained very healthy at $98.6 million or 10.47%. The vast majority of that growth, 87.16%, was in checking and savings accounts.
Net Income grew at a slower pace than asset growth, resulting in a decrease in our Net Worth Ratio from 10.82% at year-end 2020 to 10.64% at year-end 2021. We remain very well capitalized and significantly above the NCUA benchmark of 7%. Total operating expenses increased by 9.9% compared to the previous year, primarily due to increases in salary, benefits, marketing, and card processing expenses. Many of the key ratios that wemonitor for financial performance exceeded the budget forecasts. Specifically, our Efficiency Ratio came in at 81.23% compared to the budgeted 82.43%, Return on Average Assets was 0.75% compared to a goal of 0.31% and Net Charge-Off was 0.29% compared to a budget of 0.72% Kelley L. Mayer, CPA Treasurer
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