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Annual Report

The 2021 Annual Report provides an overview of 2021, including financials, as well as some insight into the direction Verity will take in 2022

Letter from the CEO

Read Tonita Webb's first letter as CEO.

Board Chair Report

Read a letter from Nancy Woodland.

Supervisory Committee statement

Read the Supervisory Committee statement from Zhu Zhu Xiao.

2021 Financials overview

Check out the 2021 balance sheet and other numbers.

A Letter from the CEO

As we close my first year as CEO, I am proud of the direction Verity is heading and the steps we’ve taken to further socially-responsible banking and reaching communities and people who have been historically underserved by the financial industry. But we can do more. And we will do more, through being intentional with where we focus on dollars, building new partnerships, and working with communities to create products and services that fit their unique needs.

We finished 2021 with strong membership and loan growth, fueled greatly by our partnership with Solgen Power. During the year, we opened more than 2,500 solar panel loans and increased our membership by a net of 2,312 members. We are continuing to see exponential growth with our solar program and expect to expand the states we can provide loans from three to five in 2022. We also ended the year with a strong reserve ratio, higher than expected net income, and an increased operating efficiency. Be sure to check out our financials.

Verity was also recently certified as a Community Development Financial Institution (CDFI). This designation unlocks access to the U.S. Treasury Department’s Community Development Financial Institutions Fund, a federally-created monetary fund to help CDFIs promote economic revitalization and community development for reaching financially vulnerable communities. Procuring this grant funding will allow us to partner with historically underserved communities to co-create programs, products, and services that center the needs of our community. We have not applied for any grant funding yet, but I am excited for the opportunities this designation creates for the greater community.

The executive team and board of directors entered 2022 budget planning with emphasis on technology, data, and ensuring staff are paid a living wage. I’m pleased to report we are well on our way in all three areas, but most especially in regards to Verity staff salaries. During 2021, we examined our payroll policies and how salaries are set for positions and individuals. And at the end of the year, we provided living wage adjustments to 75% of staff, bringing all staff to a salary which mirrors their experience level within their salary range. This move, while not only the right thing to do, helps ensure all staff are compensated fairly and can live in the communities we serve.

As we look to the future, we are putting a strong emphasis on mitigating risk and improving member experiences. This is why we are currently hiring for a Chief Risk Officer and Chief Digital Experience Officer. The Chief Risk Officer will allow us to proactively create policies and procedures to protect the organization from increased cyber security threats and scams, while also reviewing existing policies and procedures. Verity has been, and continues to be, a safe place for our members and their finances—the credit union performed well from a safety and soundness perspective in our most recent annual exam. This new Chief Risk Officer role will ensure Verity remains this way as we grow into a billion dollar institution. And the Chief Digital Experience Officer will allow for an increased emphasis on ensuring our technology fits the needs of our members—and prospective members—so that they can achieve their goals.

I look forward to the year to come and what we can accomplish together.

Sincerely,
Tonita Webb, CEO/President

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2021 Community Impact Report

Board Report

As we embarked on 2021, your board of directors set a few simple goals. With a theme of being “Future Forward and Risk Aware,” we focused on welcoming and walking alongside our new CEO, Tonita Webb, while also doing our part to ensure Verity Credit Union’s members prospered despite the pandemic.

I’m pleased to report to you all that this simple approach paid off. 2021 was a year of adapting and a year to celebrate! We grew our membership beyond our goals, welcoming a net 2,312 new members, and created greater security as your financial institution by ensuring strong results in all measurements of financial health.

Our “Future Forward and Risk Aware” plan allowed us to keep a steady focus on Verity’s mission.

To enhance member’s lives by building trusted relationship and vibrant communities.

In service to “relationship” and “communities,” we steadily focused on people—the people who keep Verity running smoothly, the folks serving on your board of directors, and you.

The board supported our CEO’s push for increased pay equity for the Verity team. This ongoing commitment means less turn-over and better service for you and is in support of our mission. Looking inward in our quest for equity and prosperity, we support our staff to build trust as well as to ensure they can be part of our vibrant communities with a livable wage. This work is ongoing.

Your board of directors exercised all of our duties of oversight while also taking a look at our composition and how we operate. We too need to consider how to do things differently in support of building trusted relationship. Our board is recognized for the varied lived experiences at our table as well as the way we ensure new perspectives are included. We stand out for a number of reasons, but I am personally proud to have two women leading our board. Joined by attorney Michelle Pham as Vice Chair, I get to add the perspective of an executive leader, nonprofit consultant, and a mom!

Did you know all members are eligible to be considered for the Board? The elections that take place at our Annual Meeting are democratic. Please reach out if you might want to explore joining our Associate Board program for 2022-23!

Finally, we know you, our members, are the reason all of this matters! Each step we take, policy we consider, and balance sheet we review, is with an eye towards safeguarding the funds you entrust to us and the products we design for you, ensuring you can be a vibrant member of our community.

Future Forward and Risk Aware - we are proud to serve you!

Sincerely,

Nancy Woodland, Board Chair

What is socially responsible banking?

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Supervisory Committee Statement

The Supervisory Committee is an independent governing entity of Verity Credit Union that is responsible for making sure the credit union’s financial records are in order and that internal controls are in place to protect the assets of the Credit Union and its members. The Committee does this by making sure that an annual audit is conducted and by making sure that internal controls are tested regularly.

As of December 31, 2021, the Verity Credit Union Supervisory Committee was comprised of four elected volunteers: Zhu Zhu Xiao, Chair; Karen Hunt, Vice Chair; Vikash Chhagan, member; and Tom Holz, member.

The Supervisory Committee meets regularly with management staff to review and evaluate the credit union’s operating policies, ensure internal controls are defined, effective, and followed. The committee reviews and recommends policy changes to Verity’s Board of Directors, and ensures sound operating procedures are adhered to in accordance with established policies.

For the year 2021, the committee retained the independent CPA firm of Moss-Adams LLP to audit and prepare Verity’s financial statements. The credit union’s audit was conducted in accordance with the Engagement Letter. Our independent auditors have issued an unmodified opinion. The financial statements can be found on the Verity Credit Union website.

Zhu Zhu Xiao, Supervisory Committee Chair, 2021

Verity's board, supervisory committee, and executives work together to move Verity forward.

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2021 Financials

Income and Expenses

Fiscal year ended 12/31/2021 12/31/2020

Interest Income

Loans receivable $26,748,838 $24,710,048
Investments and interest-bearing accounts $920,834 $1,075,327
Total interest income $27,669,672 $25,785,375

Interest Expense

Members' share accounts $1,076,954 $2,452,930
Borrowed funds $12,223 $66,124
Total interest expense $1,089,177 $2,519,054
Net interest income $26,580,495 $23,266,321
Provision for loan losses $922,165 $4,627,918
Net interest income after provision for loan loss $25,658,330 $18,638,403

Non-Interest Income

Fees and charges $2,442,589 $2,362,761
Gain on sale of investments $152,995         ---
Gain on sales of loans $2,166,655 $2,122,624
Interchange income $3,505,770 $2,800,616
Other $3,734,352 $3,238,790
Total non-interest income $12,002,361 $10,524,791

Non-Interest Expense

Compensation and benefits $16,048,290 $14,359,481
Operations $10,832,412 $12,415,734
Occupancy $2,878,314 $1,301,040
Total non-interest expense $29,759,016 $28,076,255
Net income $7,901,675 $1,086,939
Net income attributable to non-controlling interest ($964,503) ($710,713)
Net income attributable to Verity Credit Union $6,937,172 $376,226

Balance Sheet

Fiscal year ended 12/31/2021 12/31/2020

Assets

Cash and cash equivalents $131,895,424 $77,712,450
Investments
Securities available for sale $36,137,992 $46,762,515
Other $3,004,201 $2,631,911
Loans held for sale, at lower of cost or fair value $3,093,114 $2,728,550
Loans receivable, net $581,115,333 $534,260,174
Accrued interest receivable $1,149,902 $1,638,267
Property and equipment, net $8,651,731 $9,790,805
National Credit Union Share Insurance Fund deposit $5,828,781 $5,251,828
Other assets $8,988,651 $7,836,455
Total assets $779,865,129 $688,612,955

Liabilities

Members' share accounts $703,490,549 $619,455,037
Accrued expenses after other liabilities $8,366,283 $7,934,538
Total liabilities $711,856,832 $627,389,575

Members' equity

Regular reserve $5,565,164 $5,565,164
Undivided earnings $57,604,824 $50,667,652
Accumulated other comprehensive income $539,309 $1,656,067
Total members' equity $63,709,297 $57,888,883

Non-controlling interest

$4,299,000 $3,334,497

Total equity

$68,008,297 $61,223,380

Total liabilities & equity

$779,865,129 $688,612,955

Total membership

38,690 36,378

 

These statements represent Verity Credit Union and Credit Union Home Mortgage Solutions (CUHMS) consolidated. Verity is part-owner of CUHMS.

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