CO-OP SERVICES CREDIT UNION | 2012 ANNUAL REPORT

CO-OP SERVICES CREDIT UNION | 2012 ANNUAL REPORT

through theeyes of our membersHow will this decision affect our members?It’s a question we ask ourselves every day. When a member comes inrequesting a loan, our employees try to put themselves in their shoesand make the right decision for that member. When our board membersgather to review a potential service fee change we try to imagine howthat change will affect our membership.Looking at the credit union through the eyes of our members helps toremind us that everything we do and every decision we make should befor the greater good of our membership. It’s rewarding to know that weare able to help those in our community when other financial institutionscan’t or won’t. We pride ourselves on this distinction.Helping our members and making their financial dreams a reality iswhat we’re here for. It’s why we were founded 58 years ago, and it’swhat we’ll be focusing on throughout 2013 and beyond.one

chairman’s insightLooking through the eyes of our members is not just a catchy theme for our 2012 Annual Report. It’s a phrasethat really hits home with every Employee and Board Member at Co-op Services Credit Union.You see, as part of our decision making process at every level of the organization, we make sure we take a lookthrough the eyes of our members. How will this decision affect the member? How can we make things betterfor our members? How can we help our members get the car of their dreams? How can we better teach youngadults how to save for their future? These answers are what drive the success of the Credit Union.Co-op Services’ compassion for our members is what sets us apart from other institutions. Sometimes it’s thelittle things we do that make all the difference…From allowing members in our lobbies to borrow an umbrelladuring a rainy day, to going to an elderly member’s home to help them register for home banking, to visitinga hospitalized member and notarizing a document for them. We go the extra mile to help our members.Co-op Services’ members are very appreciative of our empathy, as well as the great products and serviceswe offer. They tend to tell our story better than we do! In fact, in 2012 our members referred 962 of their family,friends, neighbors and co-workers to join their Credit Union and enjoy all the benefits of being a member!On behalf of the Board of Directors and staff, I’d like to extend our thanks for choosing Co-op ServicesCredit Union as your financial institution. Members are the reason we exist, and we see a bright futureas we look through the eyes of our members.Michael A. O’HehirChairmantwo

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lending observationsEveryone has been affected by financial uncertainty for thepast few years, and we know first-hand that our members are noexception. We see it every day when members request loans orask for help refinancing a home or vehicle to help make ends meet.As always, Co-op Services looks to assist as many members aspossible with our lending products. We strive to take the loanprocess a step further and look at each loan through the eyes ofthe member, and how we can provide them with the best optionavailable. Co-op Services is a safe and secure institution withmoney to lend. In 2012, we were able to provide our memberswith nearly $96 million in new loans and advances.Co-op Services listens to our members and heard about the needto facilitate the loan process by signing documents remotely.In 2012, we implemented a secure system called DocuSignwhich allows the credit union to send and receive documentselectronically. With this system in place, a member can go throughthe loan approval and closing process much faster than throughthe traditional channels.If you or someone you know is looking for a loan, send them toCo-op Services Credit Union. We have some of the lowest rates inthe country! Our personal, friendly staff is waiting to assist you inour branches, by phone, and even through our online chat feature.Making individual loan decisions by looking through the eyesof our members is what sets Co-op Services apart from otherfinancial institutions. It’s what we’ve been doing since 1954.income and expenseIncome 2012 * 2011Loan Income.......................................$12,836,351...... $14,039,222Investment Income..................................3,444,126.......... 4,084,042Other Income..........................................9,273,939.......... 7,687,180Total Income...................................$25,554,416...... $25,810,444Operating ExpensesCompensation.......................................$6,992,790........ $6,618,676Data Processing......................................1,102,570............. 944,548Audit and Insurance...................................304,251............. 337,112Cost of Space..........................................1,030,511............. 946,181Forms and Supplies....................................211,757............. 240,297Marketing................................................1,412,872.......... 1,527,798Communications........................................365,034............. 422,833Collection...................................................440,954............. 364,773Administrative............................................772,186............. 811,161Member Services....................................1,908,048.......... 1,785,830Total Operating Expenses..............$14,540,973...... $13,999,209Cost of Funds..........................................1,748,198.......... 2,643,017Non Operating Gain (Loss)........................(182,427)........... (546,623)Net Earnings.....................................$9,082,818........ $8,621,595Distribution of EarningsAllowance for Loan Loss........................$3,100,000........ $4,406,459Dividends.....................................................62,570............. 111,362Undivided Earnings..................................5,920,248.......... 4,103,774Robert L. KudlaSenior Vice President, LendingNet Earnings.....................................$9,082,818........ $8,621,595four

financial conditionAssets 2012 * 2011Loans to Members............................$208,618,567.... $223,359,120Loans to Officers........................................933,772.......... 1,096,175Total Loans..........................................209,552,339...... 224,455,295Less Allowance for Loan Loss ..... (9,580,422)........(9,899,074)Net Loans............................................199,971,917...... 214,556,221Cash.......................................................5,057,957.......... 5,752,237Investments........................................169,253,190...... 160,544,151Other Assets..........................................26,767,727........ 21,408,727Total Assets ............................$401,050,791.... $402,261,336Liabilities/EquityMember Shares.....................................88,927,071........ 78,602,873Checking...............................................43,936,554........ 41,369,351Other Deposits/Certificates..................201,634,825...... 223,385,394Total Savings .............................334,498,450...... 343,357,618Borrowed Money...................................10,000,000.......... 8,750,000Dividends Payable..........................................4,415............... 12,264Other Liabilities.......................................5,271,898.......... 4,544,389Regular Reserves..................................11,190,278........ 11,190,278Other Reserves........................................4,296,433.......... 4,537,718Undivided Earnings................................35,789,317........ 29,869,069Total Liabilities and Equity.......401,050,791...... 402,261,336auditcommittee perspectiveThe Audit Committee is committed to the task of ensuring thatthe credit union’s financial records are accurately maintained.The Audit Committee works closely with our CPA firm to providean independent audit for the membership with regard to the rangeof activities and services offered by the credit union.Our audits are conducted in accordance with generally acceptedaccounting principles and standards. The reports critically andsystematically examine the internal controls, statements, records,accounting transactions and other financial records of thecredit union.The State of Michigan Office of Financial and Insurance Regulationalso conducts periodic examinations of the records of thecredit union.The results of each examination are reported to the Board ofDirectors and the Audit Committee after each review. Based onthese examinations, the Audit Committee is satisfied that therecords of the credit union are accurately maintained and inaccordance with accepted accounting principles.In addition to these safeguards, the National Credit UnionAdministration (NCUA), an agency of the U.S. government,insures savings accounts of the credit union to atleast $250,000.*Unaudited Financial StatementKaren RawlsAudit Committee Chairmanfive

treasurer’s viewpointIn 2012, the passion Co-op Services had for our members and theirsuccess remained evident in all that we did. As we looked through theeyes of our members we saw the need for low rate loans for cars, homesand life’s expenses. Co-op Services responded by providing some of thelowest rates in the nation, with terms that made the payments easyto afford.Co-op Services’ capital ratio, which measures the financial strengthand durability of the credit union rose again in 2012 from 11.02% to11.71%, which is considered a high rating by state and federal regulatoryagencies. This means that Co-op Services has added to the currentreserve balance to help protect the credit union for the future.Co-op Services is pleased to have been awarded a 5-Star rating byBauer Financial. This is the highest rating given by the country’s leadingindependent credit union rating and research firm, illustrating thatCo-op Services is financially sound and operating well above theirregulatory capital requirement.As a strong institution that is positioned for a successful future,Co-op Services is excited to view the dreams of our membersand make them a reality.Betty J. BooherTreasurersix

savingsCertificates$72,347,884 • 21.6%Regular Shares$88,927,071 • 26.6%Money Market/High Yield$98,936,196 • 29.6%Checking$43,936,554 • 13.1%IRAs$28,648,980 • 8.6%Other$1,701,765 • 0.5%loansMortgage$108,987,235 • 52.0%Auto$56,902,357 • 27.2%Other$23,860,235 • 11.4%Visa$19,802,511 • 9.4%liabilities/equityMember Savings$334,498,450 • 83.4%Reserves$51,276,028 • 12.8%Borrowings$10,000,000 • 2.5%Other$5,276,314 • 1.3%assetsNet Loans$199,971,917 • 49.8%Investments$169,253,190 • 42.2%Cash$5,057,957 • 1.3%Other$26,767,727 • 6.7%earningsDividends Paid$62,570 • 0.7%Loan Loss Provision$3,100,000 • 34.1%Undivided$5,920,248 • 65.2%incomeLoan Interest$12,836,351 • 50.2%Investments$3,444,126 • 13.5%Other$9,273,939 • 36.3%seven

looking outfor our membersWe enjoy providing financial services to our members, but it’s how wetreat those members that we feel truly sets us apart. We love hearingstories from members about how our employees went the extra milefor them.Just recently we heard from a member that was underwater on theirmortgage. The member vowed to never default on the loan becausewhen they were hurt and out of work a few years ago, the credit unioncreated a payment plan that allowed them to stay in their house untilthey were back on their feet. The member said he became a memberfor life when multiple Co-op Services employees called him to see howhe was recuperating. The employees even asked if there was anythingthey could do for him like pick up groceries or run his errands.This is just one of many stories we hear from members on a regularbasis that make us happy to have employees who truly understandwhat caring and community is all about.eight

oard of directorsMichael A. O’Hehir•ChairmanSamuel R. Palise•Vice ChairmanDavid L. Kisic•SecretaryBetty J. Booher•TreasurerDavid Adams, Jr.•DirectorJoann Cain•DirectorGlenn Lee•DirectorEmil Muccino•DirectorKaren Rawls•DirectorKathy Richardson•DirectorGraham C. Edwards•Director EmeritusAnthony Carnarvon•President/CEOnine

locationsDearborn22740 Michigan AvenueDetroit1351 E. JeffersonLivonia29550 Five Mile RoadMelvindale4125 Oakwood BoulevardSouthfield25123 Southfield RoadSouthgate16225 Fort StreetWalled Lake1260 N. Pontiac TrailWestland35050 Ford Road