Annual Report of the President

Virginia Coop Credit Union has experienced significant growth since the beginning of Covid-19. Spurred by stimulus checks, our member’s deposits grew 51% in the two-year period between January 2020 and December 2021. Once Covid-19 abated, we saw a significant increase in pent-up consumer demand. In the two-year period between January 2021 and December 2022 our loan portfolio grew an amazing 88%. This growth is reflected in our financials, as we had a 0.95% Return on Assets and Net Worth growth of 13.7% last year. Both numbers were in the top fifteen percent in growth compared to other credit unions our size nationally. Our staff has done a fantastic job helping us fulfil our membership’s financial goals.

Managing the asset and liability side of growth has been a focus for management and the Board of Directors. Regional bank failures have dominated the news and they have some commonalities. Liquidating long term assets is causing losses and runs on deposits. We do have long term assets on our books, but they were hedged by a larger number of short-term assets that reprice quickly. All four banks that failed had over 60% of their deposits uninsured, causing the run. All but 3% of our deposits are backed by the NCUA share insurance fund. The banks that failed also had a concentration risk of serving a market segment. We understand we also have high exposure to the cyclical mining industry, as we have managed for the past 86 years.

We will be rolling out some products in the next few weeks. Share Certificates (commonly known as CDs) were eliminated with our rapid deposit growth of the past few years. Now that loan demand has caught up to the growth, we will be offering them again. We are also in the process of implementing Mobile Wallet on your debit card which is an application on your mobile phone that allows you to make secure payments via Apple Pay^®, Google Pay^®, and Samsung Pay^®. This will help us offer a competitive and more secure payment option other than checks and physical debit and credit cards.

Thank you again for your support and understanding as we worked our way through the pandemic. Our membership is the reason for our existence, and we look forward to servicing your financial needs well into the future.

I would like to address our membership and concerns about the news coming out concerning the banking industry. As a not-for-profit financial cooperative, Virginia Co-Op Credit Union’s priority is the financial success and security of its members.

Virginia Co-op Credit Union is considered a “well capitalized” credit union by the National Credit Union Administration (NCUA). We do not rely on fintech, venture capital, or crypto currency for deposits and loans; we rely on our members in Northern Minnesota.

The NCUA provides share insurance, which is equivalent to banks offering insurance backed by the FDIC. NCUA’s share insurance is meant to provide consumer’s confidence during times of uncertainty. The Share Insurance Fund has the backing of the full faith and credit of the United States government. It covers deposits up to $250,000 for individuals and $500,000 for joint accounts.

Ninety-six percent of Silicon Valley bank deposits were uninsured. Only 3% of VCCU’s deposits are uninsured. Credit Union members have never lost even a penny of insured savings at a federally insured credit union. Please give me a call if you have any questions about your coverage or want to discuss what is transpiring in the financial industry.

Annual Report of the President

July 21, 2022 will mark the 85th Anniversary of the Virginia Coop Credit Union. Why was Virginia Coop Credit Union founded? The reason is simple: the credit union was a place to put excess earnings into savings and a place to borrow that money at reasonable rates of interest. Flash forward 85 years, and those very reasons are the same today. Yes, things may look a bit different. Our location is different, our loan programs have expanded, and the way we conduct business is always changing and improving, but our initial mission has stayed the same. Virginia Coop Credit Union is a place for our members to save and a place to borrow.

No one needs to tell you that the last few years have been both interesting and a challenge, but when I think of it, two different words come to mind: growth and change.

In the past few years, the credit union has implemented several changes. We have invested in new computer systems, new products and services, and new staff. With these changes, we have also added new services like remote deposit capture, real-time debit cards, automatic loan payments from other financial institutions, and 30-year mortgages, just to name a few. All these new services were implemented to help you with your financial needs. If you are interested in any of these services or inquiring about what else we may have to offer, please give us a call.
The credit union is on a trajectory of incredible growth. To put it in perspective, our assets have doubled in size since 2014, and the growth since December 2019 is approximately the amount the credit union had grown in the first 70 years of existence. When we talk about lending, this is where we see change and growth intersect. Last year, even though we had almost a complete turnover in lending staff, which normally is a major issue for credit unions, our loan growth was 40%. That put us in the 98th percentile in growth for all credit unions in our peer group. That was an incredible job by the lending staff, and for that, I thank our excellent team.

What does the future hold for the credit union? Hopefully more of the same. The staff excels in face-to-face transactions, where we all can make those personal connections, and we know our members like to come in and see our friendly tellers. Covid-19 really impaired those transactions. But even with the challenges of Covid-19, our members have continued to trust us with their deposits and financial needs, just as envisioned by the founding members 85 years ago. And with that trust, we have been able to grow, offering new programs and technology to make it easier for you as members to work with us.

Thank you again for your participation with this credit union, believing in its ideals and values, and keeping your money local. The past few years were a challenge, but we are making it though together, and I am excited for our future.