Chung Bothwell, JD, LLM
Chairman of the Board
“There is immense power when a group of people with similar interests get together to work toward the same goals.”
—Idowu Koyenikan, internationally-acclaimed author and organizational consultant
In an extraordinary year of accomplishments and growth, our credit union’s success is a testament to the tremendous power of working in concert toward a shared purpose. Since our inception in 1957, we have flourished under a dual mission to promote the financial well-being of our members and enrich the communities we serve. Driving steadily ahead on our strategic course in 2018, we expanded our footprint in a key region of our membership field and strengthened our financial foundation to build enduring value for our members. Welcoming the opportunity to take part in the revitalization of the City of Stockton and its surrounding areas, we also added more than 2,500 new members to our organization in the past year.
As a member, you are much more than a customer to UNCLE Credit Union. Under our unique cooperative structure, you are part-owner of an organization that exists to return value to its collective membership as well as the larger community.
Unlike a for-profit bank, UNCLE does not create profits for the purpose of distribution to private investors and outside stakeholders. Instead, we leverage our combined funds to deliver the high-value financial products and services that our members expect. Our surplus income is re-invested in the credit union to offer reduced fees, lower-cost loans and higher rates for deposit accounts. Our earnings also provide us with the capital to invest in the innovative financial solutions and infrastructure necessary for the best possible member experience. Moreover, these returns fuel the growth that is so vital to our long-term survival in an industry facing constant market pressures and outside challenges.
Along with significant organic growth, we expanded our retail network in the Central Valley during 2018 by merging with two credit unions in our 4.1 million potential membership market. UNCLE assumed all operations for Stockton Community Federal Credit Union and Allied Trades Credit Union on January 1 and March 31 respectively. Following these transactions, our management team and staff worked diligently to carefully conduct a seamless transition for full systems integration of both credit unions. Team members from every department at UNCLE had a hand in efficiently executing this considerable undertaking.
With both mergers successfully completed, UNCLE ended the year with more than $448 million in assets and 26,473 members. We’re pleased to be providing our new members in the Stockton area with a wider range of financial offerings, as well as upgraded technology solutions for added convenience. In addition, this consolidation of capital and resources allows us to improve our value proposition across the entire organization. It effectively enables us to increase assets and income without compromising our level of service, or raising our average costs. This creates the potential for stronger earnings that are poured right back into the credit union to benefit of all of our members and the communities we serve.
Throughout our history, UNCLE has had a leading role in efforts to strengthen our communities in vital areas including health and human services, education, community-centered economic growth and cutting-edge research and innovation. In late 2017, our charter corporate sponsor Lawrence Livermore National Laboratory launched a new nonprofit that addressed all of these critical issues. UNCLE was one of the first organizations to help fund the new Livermore Lab Foundation with an initial donation of $5,000 in 2017, and we were proud to make another $5,000 contribution in 2018. We plan to support the Foundation among our many philanthropic endeavors again in 2019, as it aligns well with our vision of the importance of science and technology in creating a more promising future for generations to come.
To be certain, we also recognize that the cooperative principle of “people helping people” must equally apply to improving the current circumstances of individuals in our communities that face hardship and unmet needs. Among the many nonprofits and charitable events that we supported in 2018 were the U.S. Marine Corps Reserve’s Toys for Tots program, the American Cancer Society’s Relay For Life of Tri-Valley and St. Joseph’s Foundation of San Joaquin. During the most devastating wildfire season on record in California, we raised funds and awareness for those who suffered major losses from the Camp Fire and Woolsey Fire that occurred in November. In December, when federal agencies endured a partial government shutdown, we had the requisite experience and contingency plan in place to assist employees impacted by the unexpected loss of their paychecks. Our loan relief program made it easy for our members in this difficult position to obtain loans for up to $10,000 with zero interest and no payments required for a period of six months.
As an organization that exists to promote the financial success of our members, we are humbled and honored that our members and our industry continue to recognize UNCLE’s value as a trusted financial partner. In 2018, we were not only named “Best in East Bay” for credit unions by the East Bay Readers’ Choice Awards, but we also earned a Crystal Performance Award from Raddon Financial Group for the third time. The title of “Best in East Bay” is awarded based on polling results from more than 2,500 readers of the East Bay Times, the Bay Area News Group’s daily publication serving Contra Costa and eastern Alameda counties. Winners of the Crystal Performance Award rank among the top three percent of all credit unions analyzed by Raddon Financial Group for growth, income, efficiency and margin management over two consecutive reporting periods.
The achievements of the past year underscore a financial institution steadfast on a clear path of prosperity and growth that is deeply rooted in service to our growing community.
Through the collaboration of our highly capable board members, management and staff, we are successfully pursuing a strategy to create the best possible value for our members as we continue to bolster our financial strength. I sincerely thank our talented and dedicated UNCLE team for an outstanding year with UNCLE Credit Union. Moreover, I thank you, our members, as an integral part of our thriving community, and for the confidence that you continue to place in us on the road to even greater opportunities ahead.
President and CEO
“You won’t understand the unabashed power of community until you’re a part of one.” —Anonymous
Reflecting on the course of an outstanding year in 2018, UNCLE’s achievements attest to a financial institution greatly empowered in its goal to help members prosper and thrive. As we expanded our retail network and our membership with the successful integration of two credit unions in San Joaquin County, we experienced record-breaking growth across core areas of the organization. With growing financial strength and resources, we augmented our current offerings for enhanced value, introduced innovative new programs for members and implemented substantial measures in our ongoing focus on outstanding service and 24/7 convenience. Furthermore, we effectively aligned our credit union with a long-term strategy which enables us to deliver the best possible results for our members.
Our exceptional financial performance in 2018 underscores accelerated growth bolstered by healthy earnings and solid capitalization. Members continued to increase usage of UNCLE to achieve their financial objectives, as evidenced by double-digit percentage growth in loans, deposits, members and capital. A high demand for our UNCLE Mastercard® Credit Card and Home Equity Line of Credit (HELOC) largely contributed to a 15.53 percent surge in net loan growth, as did the popularity of our indirect auto loans where financing is completed at the point of sale. Organic growth and our two strategic mergers in 2018 also resulted in a 12.92 percent increase in net members and 11.17 percent growth in assets. Another significant measure of our year-end financial results was our operating expenses to average assets ratio of 3.75 percent. This metric indicates we are using assets efficiently to mitigate expenses and generate strong returns for our members, while still investing strategically in our credit union’s future. In addition, UNCLE’s high net worth ratio of 9.55 percent will provide us with sufficient reserves to take calculated risks and withstand any potentially unfavorable conditions in the overall economy.
In our continual drive to provide an exceptional member experience, we are committed to investing in the infrastructure and resources that make it as easy as possible for our members to manage their finances.
Throughout the year, we launched multiple initiatives to deliver enhanced convenience and an improved the overall banking experience across multiple channels—in-branch, online and telephone support. In 2018, we implemented Instant Issue for UNCLE debit cards at all branches and made 24/7 live phone support available through our Contact Center managed by LSI Solutions. We also outfitted our new Stockton financial centers with upgraded technology systems, including new, full-service image-enabled ATMs, and a new cash dispenser ATM at St. Joseph’s Medical Center. With the addition of our two financial centers in Stockton, UNCLE now has seven financial centers located in the San Francisco Bay Area and San Joaquin County. Through our participation in the CO-OP Shared Branching Network, our members can also access an additional 5,600 plus branches and nearly 30,000 surcharge-free ATMs in all 50 states.
With regard to our ever-evolving digital platforms, we introduced a number of helpful new features for improved ease of use and functionality through our online and mobile banking services. We streamlined the process to complete a balance transfer or open a new credit card on our site and redesigned our Mortgage Center with a responsive mobile app to make the application process easy from a smartphone, iPad or other tablet device. For enhanced security and convenience, we also extended the capability to activate or block access to credit or debit cards online to our mobile banking platform.
In addition, we added Account-to-Account Transfer to our mobile banking services to provide a simple and secure way to move funds between an UNCLE account and accounts at other financial institutions, regardless of the time or place. This feature complements Send Money, which we instituted in 2015 to allow members to quickly and easily transfer funds from their UNCLE account to another person or merchant, using just the recipient’s email address or mobile phone number.
Turning to our financial products, we were pleased to launch an expanded new loyalty program for our credit card holders in 2018. While our members who meet the criteria for Prestige or Premier status continue to enjoy perks such as rate bumps on Certificates and free coin counting, we also enabled joint members enrolled in UNCLE Choice Rewards to leverage stronger earning power by allowing them to combine their points in one centralized account. We also integrated rewards’ data directly into our home banking platform and our quarterly email, so members can easily find their total points earned through the program. What’s more, our UNCLE Choice Rewards members now enjoy double points earned on all purchases during the holiday season, as well as low balance transfer rates.
As a financial cooperative, we exist to support our members’ financial health and to provide assistance in building a prosperous future. To this end, we continue to offer a variety of mortgage options for individuals and families seeking stability and the ability to build their net worth through home equity and appreciation in value over time. In addition, we provide access to non-owner-occupied residential loans for our members who want to purchase investment properties of 1-4 units. For the first time in 2018, we also began offering a Non-Owner Occupied Home Equity Line of Credit (HELOC). With competitive interest rates and credit lines ranging from $10,000 to $250,000, this product enables members to leverage the equity in their investment property to increase its value. Members who qualify can secure funds for any purpose, from simple upgrades on a rental property to major repairs.
From the momentum of 2018, a number of exciting new developments are already unfolding.
In the year ahead, members can expect further digital enhancements, added benefits under our UNCLE Choice Rewards loyalty program and significant upgrades to our Contact Center including computer telephony integration (CTI). Also in 2019, we will be extending hours of operation at our W. March Lane Financial Center to Saturday. Furthermore, we anticipate expanding membership opportunities after having obtained approval from our regulator for new individuals to join UNCLE based on their membership with our partner, Financial Fitness Association. We can now offer the benefits of our credit union to any member of this organization, regardless of where they reside.
With excitement over our progress and enthusiasm for the challenges ahead, I look forward to another incredible year with UNCLE Credit Union, and the continued opportunity to serve our growing membership. On behalf of our Board of Directors, Supervisory Committee, and our dedicated staff, thank you for choosing us as your trusted financial partner.