The Board of Directors' and President's Report

Since it was chartered in 1948, Alaska USA’s mission has been to provide financial services to members, affordably, conveniently and professionally. Throughout the credit union’s 72 years of operations, it has remained true to its original purpose of providing members a safe place to save and earn highly competitive rates on savings and, at the same time, an available source of low-cost credit.

The global health crisis that started in 2020 tested everyone and every industry. As the Financial Services sector represents a vital component of our nation’s critical infrastructure, Alaska USA worked swiftly to ensure we could continue providing essential services that enabled individuals and small businesses to acquire the things they needed.

We are proud of the organization’s response to the pandemic. The credit union took immediate action to ensure the health, safety and well-being of members and employees. Among many other things, we worked to quickly provide peace of mind to over 50,000 members by providing loan assistance and payment deferrals on over $1 billion in consumer loans. We also worked rapidly to provide access to capital through the Paycheck Protection Program as over 1,900 small business owners received nearly $100 million in forgivable loans from the Small Business Administration so they could stay in business and keep paying their employees.

The credit union exists to serve its members, but we cannot effectively perform that function without each of the skilled and valuable employees that work diligently to make sure members have access to their money. We were inspired by Alaska USA’s nearly 2,000 dedicated employees, who continued to serve members through unprecedented adversity, and we want to thank them for their extraordinary efforts.

People Helping People

In addition to returning profits back to the members, Alaska USA is committed to serving the communities in which members live, work and attend school. Through corporate giving and community support programs, Alaska USA contributed $698,726 to non-profit organizations in more than 50 distinct communities. Employees separately donated over $42,000 to the United Way in 2020. Charitable contributions weren’t limited to the credit union and its employees; credit union members donated nearly $250,000 to annual fundraisers coordinated by the Alaska USA Foundation, an organization that directly funds needs-based services to children, veterans, and active duty members of the armed services. While financial support of non-profit organizations is incredibly important to the co-operative mission of the credit union, Alaska USA employees in Alaska, Arizona, California, and Washington also volunteered hundreds of hours supporting organizations they are passionate about, even in the midst of the pandemic.

SERVICE FIRST

In terms of service, numerous enhancements were made during the year to make the credit union more convenient for members. At year end, the credit union operated 69 branches, which includes eight financial centers in four states as well as a 24/7/365 contact center.

Another way the credit union measures its success in serving members is to conduct regular surveys asking members their opinion about the level of service the credit union provides. This member service survey has been conducted each month for the last 21 years. In 2020, the survey responses revealed the highest levels of member service satisfaction ever recorded. In addition, the credit union was again selected by consumers as the favorite financial institution in several separate communities that we serve, including the four largest market areas in Alaska.

We are confident that Alaska USA’s experience, sound business philosophies and practices, and strong financial foundation position the credit union well to meet the many challenges and opportunities that lie ahead. We are certain that Alaska USA’s 73rd year of operation will be another year of success in serving members’ financial needs. We want to thank the membership for their seven-plus decades of support and participation in the credit union. We also want to congratulate and thank the volunteer officials and all the employees for their service to members and contributions to Alaska USA in 2020.


Bobby W. Alexander

Ronald E. Lee

Geri M. Wacker

Kent B. Berthiaume

Richard F. Hawley

Lorran J. Skinner

RaeDene K. Turner

Geoff Lundfelt

Chairman

1st Vice Chairman

2nd Vice Chairman

Secretary-Treasurer

Director

Director

Director

President and CEO


Commitment to Members

Despite all the challenges we experienced in 2020, Alaska USA remained financially strong. In terms of financial performance, 2020 was one of the most successful years in the credit union’s history, based in large part on the organization’s diversified business model. In 2020, the credit union set new records for membership, deposits, loans, net worth, and assets, as well as recorded near record net income. At year end, assets totaled $9.785 billion with net worth of $863.4 million, and the credit union’s membership totaled 696,926.

As a result of major shifts in consumer behaviors, expectations and preferences, over the past several years, the credit union focused efforts and resources on digital transformation while enhancing the member experience through the branch and contact center delivery channels. These efforts paid off in 2020 as the credit union was positioned to process a record 598 million transactions and 91,627 new loans totaling over $7.077 billion.

As a member-owned cooperative, Alaska USA transfers value to members by providing services more cost effectively than other financial organizations. To measure the credit union’s success in this regard, the value transferred is rigorously calculated based on the dollar benefit Alaska USA members receive from higher rates on deposits, lower loan rates, and lower fees compared to those of competing banking institutions. We are pleased to report that this value transfer to members in 2020 was $83.53 million, an approximate return of $120 per member.

Better than Banking

Alaska USA reinvests in members, providing better products and services for less.
MEMBERSHIP


18,399 / 2.71%

Increase oVER prior year-end

ASSETS TOTALED

$
B


$1,448.9 / 17.38%

Increase in millions over prior year-end

LOANS TOTALED

$
B


6.40%

Increase over prior year-end balances

VALUE TRANSFERRED

$
M


$120

Amount per member

We Are Where You Are

The benefits of Alaska USA membership follow you wherever you go.

69

BRANCHES IN 4 STATES

24/7

MEMBER CALL SUPPORT

5,000+

SHARED BRANCHES

55,000+

NATIONWIDE SURCHARGE-FREE ATMs



Commitment to Community

Employee Giving

In lieu of the annual Alaska USA holiday party, employees were given the option of picking up a Thanksgiving turkey or Christmas roast to help celebrate the holidays in the comfort and safety of their homes. Employees also had the option of donating their turkey or roast to organizations in the community. Alaska USA employees donated a total of 370 turkeys or roasts to recipients across the areas the credit union serves.

Alaska
  • Southeast Alaska Food Bank

  • ASYMCA Fairbanks

  • ASYMCA Anchorage

  • Anchorage Fire Department

  • Covenant House Alaska

Arizona
  • Phoenix Fire Department

California
  • Local food banks

Washington
  • Northwest Harvest

  • Other local food banks

Flagship branch openings

The credit union opened two fully redesigned, digitally focused branches in Renton, WA, and Jess Ranch, CA. The new branches boast a completely reimagined kind of banking space, with an open floor concept and mobile device equipped employees ready to engage and empower members from the moment they walk in the door. The redesign comes as more and more members are taking advantage of digital services and expect a more collaborative experience when it comes to managing their finances in-person.

Paycheck Protection Program (PPP)

When the CARES Act was signed into law in late March of 2020, the credit union responded quickly. A portion of CARES Act funds were designated for small business to take low interest loans for providing employee wages, as well as paying rent, utilities, and mortgage interest. A web portal and accompanying guide were launched to provide a centralized loan application process for business members that were experiencing financial hardship due to the pandemic. Learning a brand new government program, implementing the portal, creating the application procedures, and processing a large number of loan applications was an immense undertaking that required the combined effort of Business and Commercial Services team members from Alaska, Arizona, California, and Washington. Thanks to the dedication and hard work of the team, 1,900 PPP loans had been processed by the end of 2020 for a total of $94.87 million.

TCF

Alaska USA finalized a landmark agreement to acquire seven TCF Bank branches located in the greater Phoenix, Arizona area. The deal included $140 million in deposits, 40 new Alaska USA employees, and more than 13,000 new Alaska USA members. The number of branches available to Arizona members currently stands at 12, providing increased convenience and a more significant presence in the area.

Golf Tournament

In another show of commitment to Arizona communities, the credit union raised $125,000 to benefit Cancer Support Community Arizona at the inaugural Alaska USA Federal Credit Union Golf Invitational. The sold-out event attracted 144 golfers and was the featured opening day charity event for the PGA Tour Champions Charles Schwab Cup Championship at the historic Phoenix Country Club.

Cash for Cans

Despite a year of economic uncertainty, Alaska USA members and corporate partners contributed record breaking funds in support of the annual Cash for Cans® fundraiser. These donations came at time of historically high food insecurity in local communities. Combined donations totaled $140,000 and were distributed to food banks and pantries in Alaska, Maricopa County in Arizona, the High Desert region of California, and Washington.

It’s About Community

Cash for Cans fund distribution by state:

$60,000

Alaska

$20,000

Arizona

$26,000

California

$34,000

Washington



Supervisory Committee Report

The credit union’s Supervisory Committee is comprised of five volunteer members who function as the credit union’s audit committee. It is the Committee’s responsibility to ensure that internal controls are effectively maintained; accounting records and reports are promptly prepared and accurately reflect the results of operations; the operation of the credit union is in accordance with the policies and procedures established by the Board of Directors; and member account inquiries are promptly and fairly considered. Your Supervisory Committee has fulfilled these responsibilities during the past year as follows:

  • Retained Crowe Horwath, a certified public accounting firm, to conduct the credit union’s annual audit;

  • Worked with the credit union’s Internal Audit department to ensure that internal controls were maintained;

  • Responded directly to members with account inquiries;

  • Completed a random sample verification of member account balances and of closed accounts through direct correspondence; and

  • Met regularly, and as required, to consider matters that were within the Supervisory Committee’s area of responsibility.

It is our opinion that the enclosed financial statements fairly and accurately reflect the financial condition of Alaska USA Federal Credit Union on December 31, 2020, and that the credit union operates and is managed on a sound basis, in accordance with current federal regulations.


Craig S. Wood

Catherine M. Woods

Jody L. Allen

John K. Hogue

Sarah M. Warrington

Chairman

Secretary

Member

Member

Member


Consolidated Statements
of Financial Condition

ALASKA USA FEDERAL CREDIT UNION AND SUBSIDIARIES
December 31, 2020 and 2019
(Dollars in thousands)
2020 2019
ASSETS
Cash and due from financial institutions $127,210 $115,961
Interest bearing deposits in other financial institutions 34,339 95,709
Securities purchased under agreement to resell 290,097 390,000
Total cash and cash equivalents 451,646 601,670
Debt securities available for sale 1,810,850 699,441
Equity securities 9,424 7,308
Member Loans

Loans to members, net of allowance for loan loss of $53,804 and $46,133 as of December 31, 2020 and 2019

6,742,448 6,454,834
Loans held for sale 280,658 150,526
7,023,106 6,605,360
Deposit in National Credit Union Share Insurance Fund 79,164 66,394
Federal Home Loan Bank stock, at cost 10,000 9,180
Accrued interest receivable 27,841 22,350
Other receivables 9,472 8,454
Premises and equipment, net 196,575 186,280
Assets acquired in liquidation of loans, net 2,998 4,609
Goodwill 22,478 5,861
Mortgage servicing rights 33,451 46,888
Net pension asset 80,883 61,340
Other assets 26,701 17,862
Total assets $9,784,589 $8,335,689
LIABILITIES AND MEMBERS’ EQUITY
Liabilities
Members’ share accounts $8,844,817 $7,528,212
Accrued expenses and accounts payable 145,269 135,656
Total liabilities 8,990,086 7,663,868
Members’ equity
Statutory reserves 42,658 42,658
Undivided earnings 820,790 749,149
Accumulated other comprehensive loss (68,945) (119,986)
Total members’ equity 794,503 671,821
Total liabilities and members’ equity 9,784,589 8,335,689

Consolidated Statements of Income

ALASKA USA FEDERAL CREDIT UNION AND SUBSIDIARIES
December 31, 2020 and 2019
(Dollars in thousands)
2020 2019
Interest income
Interest and fees on member loans $299,435 $278,995
Interest on investment securities 22,065 12,838
Other interest income 3,140 11,297
324,640 303,130
Interest expense
Dividends on members’ shares 60,625 56,121
Borrowings 668 1,710
61,293 57,831
Net interest income 263,347 245,299
Provision for loan losses 30,956 27,284
Net interest income after provision for loan losses 232,391 218,015
Noninterest income
Interchange fees 50,761 47,535
Other fees and charges 36,207 37,483
Net gain on sale of loans 66,743 26,280
Net mortgage servicing (loss) income (10,873) 8,731
Net loss on sale of debt securities available for sale (166) (5,019)
Net gain on sale of equity securities 52 2,436
Unrealized gain on equity securities 2,279 7,308
Other 20,647 20,343
Total noninterest income 165,650 145,176
Noninterest expense
Compensation and benefits 198,773 176,273
Office operations 56,882 53,507
Office occupancy 30,336 28,384
Other 40,409 31,033
Total noninterest expense 326,400 289,197
Net income 71,641 73,994

2020 Executive Staff

Geoff Lundfelt

President and CEO

Wayne Bailey

Executive Vice President and CXO

Mike Brady

Chief Information Officer

John Cassidy

Chief Financial Officer

Patrick Cosgrove

Chief Lending Officer

Jessica Graham

Chief Risk Officer/General Counsel

Scott Hansen

Chief Lending Officer

Tom Newins

Chief Operations Officer

Rachel Norman

Chief Administration Officer

Steve Larson

Executive Director, Mortgage & Real Estate Lending

Robert McNaughton

Executive Director, Business & Commercial Services

Julia Niziolek

Executive Director, Insurance & Investment Services

Elizabeth Pavlas

Executive Director, Retail Financial Services

Michelle Bradshaw

Senior Vice President, IM Governance

Scott Chertkow

Senior Vice President, IM Applications

Shannon Conley

Senior Vice President, Branch Administration

Dan McCue

Senior Vice President, Corporate Relations

Phenie Miller

Senior Vice President, Member Service Center

Tod Miller

Senior Vice President, Consumer Lending

Maria Quick

Senior Vice President, Accounting and Treasury

Troy Shelden

Senior Vice President, Mortgage Finance and Servicing

Brian Spink

Senior Vice President, Internal Audit

Bob Thompson

Senior Vice President, Corporate Properties & Supply

Tim Woolston

Senior Vice President, Marketing

Peter Caldwell

Vice President, Accounting

John Collins

Vice President, Mortgage Operations

Joe Crosson

Vice President, Direct Consumer Lending

Bryce Deeney

Vice President, Payments

Leisa DeYarmon

Vice President, Special Credits Collections

Holli Frenchik

Vice President, Consumer Loan Administration

Cindy Fry

Vice President, Branch Administration, PNW Region

Jeff Gregg

Vice President, Business and Commercial Lending

Clinton Hess

Vice President, Financial Analysis

Doug Horner

Vice President, IM Operations

Brenda Lind

Vice President, Personnel

Stephanie Maxwell

Vice President, Digital Channels

Julie Moore

Vice President, Mortgage Administration & Compliance

Laura Moore

Vice President, IM Applications

Athar Nazir

Vice President, Special Credits Operations

Sharlyn Ruyan

Vice President, Member Service Center

Kathryn Schwab

Vice President, Personnel

David Vanzant

Vice President, Enterprise Security

Robert Warthen

Vice President, Commercial Services Administration

Sonya Watkins

Vice President, Branch Administration, AK Region

Victoria Worley

Vice President, Operations

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