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| 2.1 | BoD mtg April 28, 1992. Discussion => 588 | PLOUGH::KINZELMAN | Paul Kinzelman | Wed Jul 22 1992 14:29 | 367 |
| DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
BOARD OF DIRECTOR'S MEETING
April 28, 1992
The meeting held in the Digital Employees' Federal Credit Union (DCU)
Headquarters (141 Parker Street, Maynard, MA) Training Room was called
to order at 5:05 p.m.
GENERAL SESSION
Present: Tanya Dawkins
Philip Gransewicz
Paul Kinzelman
Gail Mann
Paul Milbury
Lisa DeMauro Ross
Absent: Thomas McEachin
Staff: Charles Cockburn, President/CEO
Lisa Kendall, Recording Secretary
Sandra Ramalho, Information Officer (5:15 p.m.)
Also Present: Joseph Melchione, General Counsel
(via Telephone Conference)
I. ROLL CALL & DETERMINATION OF QUORUM
At 5:05 p.m., Mr. Cockburn welcomed the new Board and distributed an
agenda for this evenings meeting.
II. REVIEW OF AGENDA ITEMS
a. Waiver of Notice For Meeting
Mr. Cockburn informed the Board of their right to waive a seven (7)
day notice for Board of Directors' Meetings.
* The six board members present waived their right of a seven (7) day
notice for Board of Directors' Meetings. MOTION CARRIED UNANIMOUSLY.
b. Time and Location of Regular Board Meetings
Mr. Cockburn suggested to the Board that they hold their monthly Board
Meetings during the fourth (4th) week of every month. This time frame
allows for DCU's Management to generate all of DCU's Operational and
Financial Reports for the Board's review. A short discussion followed
concerning which day of the week and at what time these meetings will
take place.
After a brief discussion, the Board decided to hold the regular
monthly Board Meetings on the fourth Tuesday of every month, beginning
at 3 p.m. at the DCU headquarters office in Maynard.
Board of Directors' Minutes
April 28, 1992
Page - 2
c. Election of Officers
Chairman
* It was moved by Tanya Dawkins and seconded by Paul Kinzelman to
appoint Lisa DeMauro Ross to the office of Chairman. Lisa DeMauro
Ross accepted this appointment and abstained from voting. (Five in
favor, one abstention.) MOTION CARRIED.
The Board asked Mr. Cockburn to review the roles and responsibilities
of the remaining offices. Mr. Cockburn reviewed the primary roles and
responsibilities of the Chairman, Vice Chairman, Treasurer and
Secretary Offices.
Vice Chairman
Both Tom McEachin and Philip Gransewicz were nominated and seconded
for the office of Vice Chairman by Gail Mann and Paul Kinzelman
respectively. Both Gail and Paul gave reasons why their nominee
should be appointed to this office. After a short discussion, the
office of Vice Chairman was voted on. Mr. McEachin was appointed.
(Mr. McEachin - three in favor one abstention, Mr. Gransewicz - two in
favor.) MOTION CARRIED.
Treasurer
* It was moved by Lisa DeMauro Ross and seconded by Paul Milbury to
appoint Tanya Dawkins to the office of Treasurer. Tanya Dawkins
accepted this appointment and abstained from voting. (Four in favor,
two abstentions.) MOTION CARRIED.
Secretary
* It was moved by Philip Gransewicz and seconded by Paul Milbury to
appoint Paul Kinzelman to the office of Secretary. Paul Kinzelman
accepted this appointment and abstained from voting. (Four in favor,
two abstention.) MOTION CARRIED.
d. Board Orientation
Mr. Cockburn discussed an orientation program for the new Board
Members. He distributed a preliminary packet which contained
information on the orientation, including an agenda. He gave an
overview of each agenda item and answered various questions.
Board of Directors' Minutes
April 28, 1992
Page - 3
At 5:15 p.m., Mr. Cockburn introduced Sandra Ramalho, DCU's
Information Officer. Ms. Ramalho reviewed information contained in
the packet regarding conferences that various organizations sponsor
for credit union Board of Directors. She answered various questions
posed from the Board. Mr. Cockburn noted that all Board of Directors
should attend at least one conference per year. He encouraged the
Board to attend conferences because of the opportunity to network with
other credit union professionals and to gain knowledge on current
trends and practices.
After a brief discussion regarding the date and time of the
orientation, it was decided to conduct the orientation program on
Thursday, May 28, 1992, from 12 p.m. to 5 p.m., and Friday, May 29,
1992, from 8 a.m. to 5 p.m. It was also noted that May's Board
meeting will take place on Friday, May 29, 1992, following the
orientation program.
Mr. Cockburn reviewed the address and telephone listing of all Board
of Directors and Management Staff which was included in the
preliminary packet. He also reviewed DCU's Organizational Chart.
III. DISCUSSIONS
- Mr. Cockburn informed the Board that DCU's Supervisory Committee
Members are welcome to attend monthly Board Meetings.
- Mr. Cockburn distributed to each Board member copies of the 1991
Board Meeting Minutes for their review. He noted that this is
confidential information and cannot be distributed.
- Discussions took place concerning Attorney Client Privilege
information contained in the minutes. Joe Melchione, DCU's General
Counsel, (via telephone conference) updated the Board on what is and
is not Attorney Client Privilege and the reasons why.
The privilege is the credit union's and covers communications between
the lawyer and Board and/or management. Only the full Board can waive
this privilege.
- Normally, Election Ballots are destroyed after the results are
announced at Annual Meetings. Mr. Melchione suggested that the Board
have the Special Election Ballots sealed and retained for one year.
Mr. Gransewicz requested that these ballots be sealed and stored off
site with the auditors, O'Rourke & Clark Accountancy Corporation. Mr.
Cockburn agreed. The six Board Members present were all in agreement
with this decision.
- Discussions took place concerning DCU's current policies.
* It was moved by Philip Gransewicz and seconded by Paul Kinzelman
that the minutes of this meeting reflect that the new Board wishes to
make known that they do not rescind, revoke, nor endorse DCU's current
policies until they have been reviewed by the new Board of Directors.
(Four in favor, two abstentions.) MOTION CARRIED.
Board of Directors' Minutes
April 28, 1992
Page - 4
- Discussions took place concerning Indemnification for the new Board
of Directors.
IV. ADJOURNMENT
* It was moved by Paul Kinzelman and seconded by Gail Mann to adjourn
this meeting at 6:20 p.m. MOTION CARRIED UNANIMOUSLY.
______________________________ ____________________________
Lisa DeMauro Ross Paul Kinzelman
Chairman of the Board Secretary
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DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
BOARD OF DIRECTORS' MEETING
May 29, 1992
The meeting held in the Digital Employees' Federal Credit Union (DCU)
headquarters (141 Parker Street, Maynard, MA) Training Room was called
to order at 4:00 p.m.
At 4 p.m., Lisa DeMauro Ross called the meeting into EXECUTIVE
SESSION.
Board of Directors' Minutes
May 29, 1992
Page - 2
GENERAL SESSION
PRESENT: Tanya Dawkins, Treasurer
Philip Gransewicz
Paul Kinzelman, Secretary
Gail Mann
Thomas McEachin, Vice Chairman
Paul Milbury
Lisa DeMauro Ross, Chairman
STAFF: Chuck Cockburn, President/CEO
Kim Gates, Administrative Secretary
Jack Hamilton, Vice President of Lending
Elizabeth Hartel, Director of Human Resources
Lisa Kendall, Recording Secretary
Mary Madden, Director of Marketing
Betty Moran, Director of Finance
Jim Regan, Internal Auditor
Laura Richall, Vice President of Operations
ALSO PRESENT: Steve Behrens, DCU Supervisory Committee Chairman
Joseph Melchione, General Counsel
III. ROLL CALL AND DETERMINATION OF QUORUM
Mr. Cockburn introduced the following people to DCU's Board of
Directors: Steve Behrens, Chairman of DCU's Supervisory Committee,
Jack Hamilton, Elizabeth Hartel, Mary Madden, Betty Moran, Jim Regan,
and Laura Richall, DCU's Senior Management staff.
Board of Directors' Minutes
May 29, 1992
Page - 3
IV. REVIEW OF MINUTES
The April 28, 1992, minutes were reviewed. The Board requested minor
changes to be made as follows:
Election of Officers:
a) Vice Chairman's section, change the wording from "Mr. McEachin -
four in favor, Mr. Gransewicz - two in favor" to "Mr. McEachin -
three in favor, Mr. Gransewicz - two in favor, one abstention".
b) Treasurer's section, change the wording from "five in favor, one
abstention" to "four in favor, two abstentions".
c) Secretary's section, change the wording from " five in favor, one
abstention" to "four in favor, two abstentions".
Discussions:
d) Bottom paragraph, change "MOTION CARRIED UNANIMOUSLY" to "four in
favor, two abstentions".
* It was moved by Ms. Mann and seconded by Mr. Milbury to approve the
April 28, 1992, minutes as amended. MOTION CARRIED UNANIMOUSLY.
(see pages 17-20)
V. FINANCIAL REPORTS
Mr. Cockburn noted that during the Board Orientation Program, the
Board spent approximately two hours reviewing all Financial Reports in
detail.
No additional questions were posed from the Board during this meeting.
VI. PRESIDENT'S REPORT
Mr. Cockburn went over some topics which would normally be reviewed
with the Board during the "President's Report" section of the Board
Meeting. He noted that he will not give a presentation at this
meeting due to previous information presented during the Board
Orientation Program.
Board of Directors' Minutes
May 29, 1992
Page - 4
VII. COMMITTEE REPORTS
a. Supervisory Committee
At 4:30 p.m., Lisa DeMauro Ross introduced Steve Behrens, Chairman of
DCU's Supervisory Committee. Mr. Behrens is the Assistant Corporate
Controller at Digital Equipment Corporation. He has been the Chairman
of the Supervisory Committee since November, 1991.
Mr. Behrens gave a brief overview of the committee's duties and
responsibilities with the top two priorities listed below:
- establish and maintain the internal control structure/environment at
the credit union.
- ensure that the accounting records and reports accurately reflect
the credit union's operations and results.
Mr. Behrens stated the names, titles, and qualifications of the other
members on the Supervisory Committee. Their names and titles are as
follows:
Robert Cohen Group Financial Manager of TNSG (The New Software
Group)
Rebecca Hawkins Attorney
Robert Ketz Senior Financial Consultant
Karen Kupferberg Finance, Planning and Information Systems Manager
Mr. Behrens informed the Board that during the past several months,
the Supervisory Committee's actions and observations have resulted in
the following:
- The Supervisory Committee has engaged a new external accounting
firm, O'Rourke & Clark Accountancy Corporation.
- They have hired an Internal Auditor, James Regan. Mr. Behrens noted
that the committee is exceptionally pleased with Mr. Regan's work
and capabilities.
- They have developed a set of procedures which will be followed when
performing audit reports.
- They have worked with Joseph Melchione of Styskal, Wiese, &
Melchione, DCU's new General Counsel, on developing an ethics policy
(from a control point of view).
- They have improved DCU's control environment.
- The internal development of a comprehensive internal audit plan.
(This is an ongoing plan.)
- The Supervisory Committee received and reviewed a Record of Action
Plan from NCUA related to NCUA's most recent examination. Mr.
Behrens noted that management addressed all issues identified by
NCUA and met established deadlines.
Board of Directors' Minutes
May 29, 1992
Page - 5
Mr. Behrens discussed briefly DCU's Annual Audit. This audit will be
performed by O'Rourke & Clark Accountancy Corporation. The
approximate cost to perform the annual audit and for various services
during the next year is $ The committee will negotiate this
fee with O'Rourke & Clark, but it was noted that the average amount
charged by external accounting firms ranges from $ to $
and up.
Mr. Cockburn informed the Board that it's the Supervisory Committee's
responsibility to hire external auditors. The Board may give input to
the committee, but that overall, it's the Supervisory Committee's
decision to hire the external auditing company of their choice.
Mr. Behrens informed the Board of a letter he recently received from a
DCU member. The member requested information concerning the role of
the Supervisory Committee, the names of the current members on the
committee and information about DCU's Participation Loan properties.
Mr. Behrens gave the letter to Lisa DeMauro Ross, and asked the Board
to reply to the member concerning the Participation Loan properties.
He noted that he responded to the member regarding the committee's
roles and responsibilities and listed the names of the current
committee members.
Mr. Cockburn noted that on average, Supervisory Committees receive
approximately ten letters per year from members usually regarding a
loan. Normally, these letters would be forwarded to management where
the information would be researched and a response would be written.
The response letter and all gathered information would then be
reviewed by the Chairman of the Supervisory Committee, then signed and
mailed to the member.
b. Investment Committee
Mr. Cockburn informed the Board that DCU's current Investment Policy
states that there are five members on this committee. Currently, the
following five positions make up the Investment Committee members:
1) Chairman of the Board
2) Treasurer of the Board
3) President/CEO
4) Director of Finance
5) Vice President of Lending
He asked the Chairman to determine who they would like on this
committee going forward. This will be determined before the next
scheduled Board of Directors' meeting.
It was also recommended that the Chairman appoint a Finance Committee.
It was further recommended that both the Finance and Investment
Committees be combined as one committee. The primary responsibilities
of the Investment Committee are to establish an Investment Policy and
develop an Investment Strategy. The primary responsibilities of the
Finance Committee are to review the annual budget and monthly
financial information.
Board of Directors' Minutes
May 29, 1992
Page - 6
VIII. UPDATES AND DISCUSSIONS
a. VISA Late Fees
Jack Hamilton, Vice President of Lending, discussed the recent
implementation of a $5.00 late fee charge on VISA credit card loans.
This late fee charge was implemented in May of 1992, after thoroughly
researching the legality of this through NCUA and DCU's General
Counsel. Forty-five days advance notice was given to all VISA account
members. It was noted that DCU incurs substantial expenses when
members pay their DCU VISA payments late. Some of the incurred
expenses are the result of extra mailings, generating internal
reports, collections and phone calls.
b. Pension Audit
Elizabeth Hartel, Director of Human Resources, updated the Board on
two 401(k) pension plan audits recently performed. O'Rourke & Clark
Accountancy Corporation performed an audit on two 401(k) plans and
noted that reporting errors were found in form 5500 during the years
1988, 1989, and 1990. Discussions took place regarding whether DCU
sends amended 5500 forms to the IRS and risks having to pay fines, or
whether DCU keeps the amended 5500 forms in order and available for
review if we were audited. It was noted that the errors found were
reporting errors only, not information errors.
* It was moved by Mr. Gransewicz and seconded by Mr. Kinzelman to file
amended 5500 forms for plan years 1988, 1989, and 1990. Four in
favor, three opposed. MOTION CARRIED.
c. Letter from NCUA
Mr. Cockburn reviewed a letter received from NCUA. He noted that as
an industry, credit unions' capital increased during the past year;
and that due to three large credit unions going under in 1991, all
federally insured credit unions were required to pay an additional
insurance fund premium late last year.
d. Branch Update
Laura Richall, Vice President of Operations, updated the Board on
several DCU branches.
Westfield/Springfield Branches
Laura Richall informed the Board that one branch staff operates both
the Westfield and Springfield branches. Management is currently
working with DEC officials on increasing branch space.
Board of Directors' Minutes
May 29, 1992
Page - 7
Shrewsbury Branch
Shrewsbury is one of our busiest offices but has the least amount of
branch space. Management is currently working on plans with DEC
officials to increase the amount of branch space and relocating the
branch for better access for non-DEC employees. It was noted the DEC
pays for all construction/relocation costs for DCU branches and DCU
pays for all communication equipment installations.
Burlington Branch
Due to downsizing, DCU's Burlington, VT, Branch may have to be moved
to another Burlington facility. Discussions are in the preliminary
stage.
Landover Branch
DEC officials have requested that an ATM be installed in Landover.
After discussions between DEC officials and DCU's management, it was
decided that DCU will install an ATM and DEC will reimburse DCU on a
monthly basis to cover installation costs and depreciation.
IX. RECOMMENDATIONS
a. Mortgage Signature Authority
Jack Hamilton reviewed the Mortgage Signature Authority resolution
with the Board. The Board requested that both names and titles of the
three authorized individuals be listed.
* It was moved by Mr. Kinzelman and seconded by Mr. Gransewicz to
approve the Mortgage Signature Authority resolution as amended.
MOTION CARRIED UNANIMOUSLY.
b. Bylaws/Board Terms
It was suggested by Board member Philip Gransewicz that Board terms be
limited to six years. It was also suggested by other members of the
Board to leave the time limitations up to the voting membership.
After a lengthy discussion, a vote was taken to determine those in
favor of a limitation. Four in favor, three opposed.
Discussions continued and a vote was taken as follows:
Board of Directors' Minutes
May 29, 1992
Page - 8
* It was moved by Mr. Kinzelman and seconded by Mr. McEachin to limit
the number of consecutive terms a Director may serve as being "two
consecutive three-year terms". Two in favor, five opposed. MOTION
DID NOT CARRY.
Discussions continued.
* It was moved by Ms. Dawkins and seconded by Ms. DeMauro Ross to
limit the number of consecutive terms a Director may serve, to be
"three consecutive three-year terms". Four in favor, three opposed.
MOTION DID NOT CARRY. (Bylaw amendments require two thirds majority
vote.)
At 6:15 p.m., Gail Mann left the meeting.
c. Bylaws/Special Meeting
Currently, DCU's Bylaws require 5,000 member signatures in order to
request a Special Meeting of the membership. As an alternative to
this requirement, petitioners may obtain 2,000 signatures but must
first appoint a five-member committee to meet with the Board to try to
resolve any problems.
Management recommends that the Board change the required 5,000 member
signatures to 1,000, and as an alternative, change the required 2,000
signatures to 200 signatures after the membership first appoints a
five-member committee to meet with the Board, to try to resolve any
problems.
* It was moved by Mr. McEachin and seconded by Mr. Kinzelman to change
DCU's Bylaws to read: 200 signatures required to request a Special
Meeting of the Membership. Two in favor, four opposed. MOTION DID
NOT CARRY.
* It was moved by Mr. McEachin and seconded by Mr. Kinzelman to
approve management's recommendation as stated above [change current
text to 200 with a committee of 5 members, or 1000 without a committee
from the 1000/5000 number currently in the bylaws]
MOTION CARRIED UNANIMOUSLY.
(This amendment is subject to NCUA's approval)
d. Supervisory Committee
Last month, an oversight was made concerning appointing members of the
Supervisory Committee for different term lengths. (Two committee
members were appointed for two years, and three committee members were
appointed for three-year terms.) DCU's Bylaws state that "the regular
terms shall be for the same number of years". To correct this,
Management recommended amending the two-year terms to three-year
terms.
Board of Directors' Minutes
May 29, 1992
Page - 9
* It was moved by Mr. Kinzelman and seconded by Mr. Milbury to approve
the recommendation that the Board re-appoint Rebecca Hawkins and
Robert Ketz to the Supervisory Committee for term lengths of three
years each, beginning April 22, 1992. MOTION CARRIED UNANIMOUSLY.
e. Information Protection Policy
Mr. Cockburn reviewed DCU's current "Information Protection Policy"
and a revised "Information Policy" [available at branches].
After reviewing the
current and revised policies, the Board asked that "Copies of" be
added at the beginning of the first sentence of the proposed
"Information Policy" which would read "Copies of the following..."
* It was moved by Ms. Dawkins and seconded by Mr. Milbury to approve
the revised "Information Policy" as amended. Five in favor, one
abstention. MOTION CARRIED.
f. Branch Hours
Laura Richall, reviewed the recommendation discussing those branches
that close and remain open during lunch hours. Ms. Richall answered
various questions posed from the Board.
* It was moved by Ms. DeMauro Ross and seconded by Mr. McEachin to
approve the recommendation as submitted. Five in Favor, one
abstention. MOTION CARRIED.
Mr. Gransewicz stated that the above motion is not what was originally
proposed by the Board. He noted that it was requested to have uniform
hours at all branches. It was explained by Ms. DeMauro Ross and Mr.
Cockburn that the Chairman of the Board reviews all recommendations
and determines which recommendations are included in the package.
* It was moved by Mr. Gransewicz that all branches be open during
lunch. There was no second.
The meeting was called into EXECUTIVE SESSION.
Board of Directors' Minutes
May 29, 1992
Page - 10
GENERAL SESSION.
Tanya Dawkins and Paul Milbury left the meeting at 6:50 p.m.
h. Charge offs
Jack Hamilton, reviewed this month's charge off report and answered
various questions posed from the Board.
* It was moved by Mr. Kinzelman and seconded by Mr. McEachin to
approve the May, 1992, charge off report as submitted. MOTION CARRIED
UNANIMOUSLY.
X. OLD BUSINESS
None
XI. NEW BUSINESS
a. Voting Representative for CUSO's
Mr. Melchione informed the Board that they must appoint three
Directors and a Voting Representative to the DCU Land Development
Corporation CUSO and the Capewind Service Corporation CUSO.
The Board nominated Tom McEachin, Paul Kinzelman, and Lisa DeMauro
Ross as Directors for the two CUSO's named above.
* It was moved by Mr. McEachin and seconded by Mr. Kinzelman to
appoint Lisa DeMauro Ross as the Voting Representative for the two
CUSO's; DCU Land Development Corporation and Capewind Service
Corporation. MOTION CARRIED UNANIMOUSLY.
b. Board Resolution
Management recommended that the Board of Directors approve the
following resolution:
In order for DCU to sell mortgage loans to the Boston Five
Institution, as an alternative source, a new Corporate Resolution must
be approved and signed by DCU's new Board of Directors. Jack Hamilton
reviewed the Corporate Resolution and answered various questions posed
from the Board.
* It was moved by Ms. DeMauro Ross and seconded by Mr. Kinzelman to
approve the Corporate Resolution enabling DCU to sell mortgage loans
to the Boston Five Institution as an alternative source. MOTION
CARRIED UNANIMOUSLY.
Board of Directors' Minutes
May 29, 1992
Page - 11
c. Liaison
The Board discussed appointing a Liaison to attend the DCU Supervisory
Committee meetings on a monthly basis. This person will be appointed
at the next scheduled Board of Directors' meeting.
d. Bylaws
Joseph Melchione will have available for the next Board meeting, the
written request for two non-standard bylaw items being submitted to
NCUA for their approval. The non-standard bylaw items pertain to
Article V, section 3, and Article VII of DCU's Bylaws.
XI. ADJOURNMENT
* It was moved by Ms. DeMauro Ross and seconded by Mr. McEachin to
adjourn this meeting at 7 p.m. MOTION CARRIED UNANIMOUSLY.
_____________________________ ______________________________
Lisa DeMauro Ross Paul M. Kinzelman
Chairman of the Board Secretary
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| 2.3 | BoD mtg June 30, 1992. Discussion => 598 | PLOUGH::KINZELMAN | Paul Kinzelman | Wed Aug 26 1992 22:15 | 604 |
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DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
BOARD OF DIRECTORS' MEETING
June 30, 1992
[Phil's vote on Network has been corrected]
The meeting held in the Massachusetts Conference Room at Digital
Equipment Corporation's Powdermill Road facility, (Maynard, MA)
was called to order at 3:10 p.m.
At 3:10 p.m., Lisa DeMauro Ross called the meeting into Executive
Session.
EXECUTIVE SESSION
I. ROLL CALL AND DETERMINATION OF QUORUM
II. EXECUTIVE SESSION AGENDA
a. Personnel Issue
b. Digital Equipment Corporation Letters
c. Request for Report of 1986 Investigation
d. Supervisory Committee Report
e. Other DEC Investigation Report
f. Indemnification
g. Legal Action
At 3:55 p.m., Lisa DeMauro Ross moved the meeting from Executive
GENERAL SESSION
Present: Tanya Dawkins, Treasurer
Philip Gransewicz
Paul Kinzelman, Secretary
Gail Mann
Thomas McEachin, Vice Chairman
Paul Milbury
Lisa DeMauro Ross, Chairman
Staff: Chuck Cockburn, President/CEO
Jack Hamilton, Vice President of Lending
Liz Hartel, Director of Human Resources
Lisa Kendall, Recording Secretary
Betty Moran, Director of Finance
Jim Regan, Internal Auditor
Laura Richall, Vice President of Operations
III. ROLL CALL AND DETERMINATION OF QUORUM
IV. REVIEW OF MINUTES
a. April 28, 1992
The April 28, 1992, minutes were reviewed.
* It was moved by Ms. Mann and seconded by Mr. Milbury to accept
the April 28, 1992, minutes as submitted. MOTION CARRIED
UNANIMOUSLY.
b. May 29, 1992
The May 29, 1992, minutes were reviewed. The Board requested
minor changes to be made as follows:
- Page 7, third paragraph, some of the Supervisory Committee
titles are wrong. List the correct titles next to each member.
- Include information concerning Steve Behrens, Supervisory
Committee Chairman, reviewing NCUA's Record of Action Report,
which was not noted in the minutes.
- Page 7, fourth paragraph, it should be noted in the minutes
that the internal development of a comprehensive internal audit
plan is an ongoing issue.
* It was moved by Mr. Gransewicz and seconded by Mr. McEachin to
approve the May 29, 1992, minutes as amended. MOTION CARRIED
UNANIMOUSLY.
Discussions took place regarding the listing of individual Board
member names next to the votes taken on various issues discussed.
This information would include the names of who voted and how (in
favor, opposed, or abstained). It was requested by Mr.
Kinzelman, Board Secretary, to include this information in the
May 29, 1992, Board minutes.
Ms. Ross noted that the Board minutes do not reflect all of the
discussions that occur on every issue. Mr. Milbury added that
the minutes also do not reflect all of the different positions of
each Board member. Because of this lack of information, Ms. Ross
requested that individual Board member names, indicating how each
Board member voted not be listed.
Mr. Kinzelman strongly disagreed with Ms. Ross and noted that
this is essential information for the membership. This
information allows the membership to know how individuals vote on
issues and helps members decide whether or not to re-elect
individual Board members.
Mr. Gransewicz noted that Board members should be held
accountable for how they vote on issues. He also added that by
showing how individuals vote, the membership will have the
opportunity to ask Board members questions concerning why they
voted a specific way.
Ms. Ross added that the Board minutes would never be
comprehensive enough in reflecting the depth of all discussions
and views of each individual Board member. Ms. Mann questioned
whether the Board minutes should be used as a communication
medium with the membership. Ms. Mann suggested that the Board
minutes be kept separate and that another Board communication
medium be investigated.
It was suggested by Mr. Gransewicz that recording devices be used
during Board meetings to insure the accuracy of Board minutes.
* It was moved by Ms. Mann that Board minutes reflect the results
of votes taken and not to list how individual Board members
voted. Motion was not seconded.
* It was moved by Mr. McEachin and seconded by Mr. Milbury to
table the vote regarding the listing of names on how individual
Board members vote until after the communication section of this
meeting. MOTION CARRIED. (Six in favor; Tanya Dawkins, Philip
Gransewicz, Gail Mann, Thomas McEachin, Paul Milbury and Lisa
DeMauro Ross, one opposed; Paul Kinzelman.)
V. FINANCIAL REPORTS
Ms. Dawkins, Board Treasurer, gave an overview of DCU's Financial
Reports. She noted the following during the month of May, 1992.
- Negative loan growth.
- Year-to-date Non-Operating income exceeds budget estimates by
approximately $60,000. This Non-Operating income represents
reimbursement for operating expenses at the two DCU Puerto Rico
branches. The current year-to-date figure includes severance
packages for DCU employees at these two branches.
- There is a 2.2% increase in Total Assets.
- Total Savings decreased by 1%
A question was asked concerning what is included in "outside
services" listed on the Statement of Income & Expenses Report.
The composition of outside services includes ATM Network costs,
Courier costs, and Security system expenses.
Betty Moran, DCU's Director of Finance, informed the Board of an
increase in payroll deposits received from Digital Equipment
Corporation on June 10, 1992. The increase was approximately $23
million dollars above normal weekly deposits received. This
excess money reflects early retirement deposits.
VI. PRESIDENT'S REPORT
Mr. Cockburn reviewed financial trends and highlighted that DCU's
Capital Ratio has shown steady growth since January, 1992. He
also provided the Board with a Profitability Analysis regarding
individual loan and savings products.
Mr. Cockburn reviewed with the Board the process used to complete
the analysis and indicated that DCU is currently losing money on
its Checking and Regular Savings products. Management is in the
process of evaluating pricing alternatives to correct this
situation.
Mr. Gransewicz asked Mr. Cockburn whether any steps had been
taken or considered to lower expenses associated with products
DCU is losing money on.
Mr. Cockburn indicated that Operating Expenses were generally not
the problem. The lack of profitability is due to low balance
accounts where the member has no savings or loan relationship.
VII. COMMITTEE REPORTS
a. Supervisory Committee
At 5:05 p.m., Lisa DeMauro Ross introduced Karen Kupferberg of
DCU's Supervisory Committee.
Ms. Kupferberg provided a monthly report to the Board which
included the following information:
- The Supervisory Committee's last meeting was held on May
20, 1992
- Supervisory Committee minutes will be kept confidential and
only available to DCU's Board of Directors (excluding
Executive Session information)
- The committee will retain O'Rourke & Clark Accountancy
Corporation during next year
Mr. Gransewicz posed a question concerning DEC security controls
at our branches which are accessible to the membership without
passing through DEC security stations. Ms. Richall replied by
stating that all branches are alarmed and have cameras, but that
NCUA does require a Security Officer to report to the Board on a
regular basis concerning branch security. This will be discussed
further at the next Board meeting.
Ms. Ross asked Mr. Gransewicz to be the Liaison at Supervisory
Committee meetings. The Liaison is responsible for updating all
Board of Directors concerning various issues discussed at the
Supervisory Committee Meetings. Mr. Gransewicz accepted the
position of Liaison.
b. Finance/Investment Committee
On Monday, June 29, 1992, members of the Board, along with DCU's
President/CEO, Director of Finance, and Financial Analyst, met
with representatives of EasCorp and South West Corporate to
review DCU's current investing activities.
According to DCU's Bylaws, the Chairman of the Board appoints
members of the Board to this committee. Ms. Ross appointed the
following to the Finance/Investment Committee:
- Tanya Dawkins, Chairman
- Paul Milbury, Member
- Lisa DeMauro Ross, Member
- Philip Gransewicz, Member
(Three DCU management positions which include; Director of
Finance, Financial Analyst, and the President/CEO are also
members of the Finance/Investment Committee.)
* It was moved by Mr. Kinzelman and seconded by Mr. Gransewicz to
amend DCU's Investment Policy to list the names of the new
committee members; Tanya Dawkins-Chairman, Paul Milbury-Member,
Lisa DeMauro Ross-Member and Philip Gransewicz-Member. MOTION
CARRIED UNANIMOUSLY.
VIII. UPDATES & DISCUSSIONS
Liz Hartel, Director of Human Resources, reviewed the following
policies for officials and employees of DCU:
agenda item: a,b Code of Ethics Policy
c,d Account Maintenance Policy
e,f Irregularity Reporting Policy
g,h Confidentiality Policy
Mr. McEachin posed a question concerning the Irregularity
Policy's reporting of irregularity issues to NCUA rather than the
normal reporting channels listed in the policy.
It was also noted that the policy requires irregularities be
reported to the Board Chairman, but does not exclude reporting
them to the entire Board as well.
* It was moved by Mr. Milbury and seconded by Ms. Mann to approve
management's recommendation on Irregularity Reporting as
submitted. MOTION CARRIED UNANIMOUSLY.
Ms. Ross requested that the titles on the Account Maintenance
Policies be changed to the following:
- Account Maintenance for Officials
- Account Maintenance for Employees
i. Business Loan Policy
Jack Hamilton, Vice President of Lending, reviewed DCU's current
Business Loan Policy which was approved by the previous Board of
Directors. He noted that the Business Loan Policy is very
specific in its definition and requirements.
Currently, DCU has a Business Loan portfolio consisting of $6.4
million, which is 3% of DCU's overall lending portfolio. Mr.
Hamilton will provide more detailed information concerning DCU's
Business Loans, including the current interest rate, at the next
Board meeting.
At 5:35 p.m., the Board took a short dinner break and reconviened
at 5:45 p.m.
j. Branch Updates
Laura Richall, Vice President of Operations, updated the Board on
the following branches:
Spitbrook, Salem & Westminster Branches
Beginning June 15, 1992, these branches will remain open during
lunch hours.
Colorado & King Street Littleton Branches
Beginning July 20, 1992, these branches will remain open during
lunch hours.
Westfield & Springfield Branches
Management is currently reviewing plans to relocate these offices
so our members can have better/easier access.
Shrewsbury Branch
Management and DEC Officials have come to an agreement to
increase branch space at this location. Security escorts will
continue to be needed for escorting non-DEC employees to and from
the branch. It was also noted that one additional teller window
will be added. Opening this branch during lunch hours will be
reviewed after the increase of branch space has been completed.
Westminster Branch
Management is discussing plans with DEC Officials in re-designing
this branch office.
k. Marketing Update
A copy of this month's Network Bulletin was distributed to the
Board.
Mr. Cockburn updated the Board on DCU's new "Driving Deals"
promotion. This promotion is designed to have members transfer
loans they currently have at other financial institutions to DCU.
The promotion, including a mini application, will be advertised
through a targeted mailing to 50,000 DCU members, posters in all
branches, and brochure inserts in the monthly checking account
statements.
Mr. Cockburn noted that all Marketing material is reviewed by a
Review Committee. The committee proofs all material for errors
and also provides input regarding the particular piece. This
committee consists of Managers, Supervisors, and Branch Staff.
Mr. Kinzelman requested he review all marketing advertising
information, including the Review Committee's changes and input,
prior to committing material to print.
It was decided by the Board that DCU's Management, not Mr.
Kinzelman, has the final authority as to what information is
included and excluded in DCU's marketing newsletter "Network".
l. Board's review of Policies
Mr. Cockburn informed the Board that he has assigned one employee
of the credit union to make copies of all policies previously
approved by the prior Board. All of these policies will be
available by the end of the week. It was noted that the majority
of these policies were approved within the past nine months.
VIII. RECOMMENDATIONS
d. Charge Offs
Jack Hamilton reviewed this month's Charge Off Report and
answered various questions posed from the Board.
* It was moved by Ms. Mann and seconded by Mr. Milbury to approve
the June, 1992, Charge Off Report as submitted. MOTION CARRIED
UNANIMOUSLY.
At 6:05 p.m., DCU's Management Staff left the meeting. Only
Board Members, Chuck Cockburn, President/CEO, and Lisa Kendall,
Recording Secretary, remained.
VII. Updates and Discussions (continued)
n. Communications between the Board and Members
Ms. Ross noted that the memo listed on page 74 (see attached) was
derived from discussions Mr. Kinzelman had with DCU's Management
Staff. The Board as a whole must decide what and how information
is to be released to the membership.
Regarding DCU's quarterly newsletter, Network, Mr. Cockburn noted
that this newsletter is a marketing newsletter which informs the
membership of new products, rates, updates, and other various
information. He is recommending that the Board give input and
provide information for the newsletter, but as President/CEO, he
should have the final say as to what is published.
Mr. Kinzelman informed the Board that when he was elected
Secretary, he understood Mr. Cockburn to say that the Secretary
was responsible for all communications to the membership. Mr.
Cockburn informed Mr. Kinzelman that it is the Presidents/CEO's
responsibility for communicating to the membership.
Ms. Ross discussed that the main issue concerning the Network
Newsletter is determining who has the final say over the contents
of it, Mr. Cockburn or Mr. Kinzelman.
Mr. Gransewicz added that General Communications to the
membership should be viewed differently from Marketing
Communications. He also suggested that the current Network
newsletter be divided into distinct sections for which each
person would have responsibility.
Mr. McEachin recommended having another communication vehicle
from the Board and that Network be the communication vehicle used
for information from DCU's President/CEO and Management.
* It was moved by Mr. Kinzelman and seconded by Mr. McEachin to
appoint Mr. Kinzelman the authority to have the final say
regarding the contents of the Network Newsletter. MOTION FAILED.
(Two in favor, Mr. Kinzelman and Mr. Gransewicz, Five opposed;
Tanya Dawkins, Gail Mann, Tom McEachin, Paul Milbury and
Lisa DeMauro Ross.)
Mr. Gransewicz feels strongly about open communications with the
membership. Individual names on votes taken should be recorded
because this is expressing how individuals feel on certain
issues. He also noted that members need to know how individual
Board members feel on issues and that he is opposed to generic
minutes which do not disclose how individual Board members voted.
It was suggested by several Board members that Board members
should act as a unified Board and take responsibilities as a
whole when decisions are made, not individually. Ms. Mann noted
that when all information is presented to the Board, issues make
more sense but all arguments/points of views must be recorded in
the minutes.
Mr. Gransewicz noted that he feels his first obligation is to the
membership and then to the Board. Ms. Mann noted that her
obligation was also to the membership but how that obligation was
executed was different. In executing that obligation as an
individual and not as a unified Board, this does not serve the
membership. Our goal as a Board was to have discussions at the
table and let the majority rule on issues.
* It was moved by Mr. Kinzelman and seconded by Mr. Gransewicz to
approve the listing of names of individual Board Members showing
how they vote (in favor, opposed, or abstained) next to issues
which require the Board's vote. MOTION CARRIED. (Five in favor;
Tanya Dawkins, Philip Gransewicz, Paul Kinzelman, Thomas
McEachin, and Paul Milbury, two opposed - Lisa DeMauro Ross and
Gail Mann.)
At 6:40 p.m., Gail Mann left the meeting.
* It was moved by Mr. McEachin and seconded by Ms. Dawkins to
amend the previous vote taken on approving the May 29, 1992,
minutes by excluding the individual Board Member names which list
how they voted on various issues. (It was noted that Board of
Directors were not aware at the May 29, 1992, Board meeting that
their names were being recorded as to how each member voted.)
MOTION CARRIED. (Four in Favor; Tanya Dawkins, Thomas McEachin,
Paul Milbury and Lisa DeMauro Ross, two opposed - Paul Kinzelman
and Philip Gransewicz.)
Discussions continued.
Ms. Ross noted that from this meeting forward, she and other
Board of Directors will be able to take their own notes as to why
they voted one way or another.
It was also noted that if individual Board members would like a
statement included in the minutes regarding why they individually
voted a certain way, that they should ask the Recording Secretary
to include their verbatim statements in the minutes.
* It was moved by Mr. Kinzelman and seconded by Mr. Gransewicz to
amend the May 29, 1992, Board minutes by leaving in the
individual Board member's names showing how each voted, but to
redact the names in the membership's copy of these minutes.
MOTION CARRIED. (Four in favor; Tanya Dawkins, Philip
Gransewicz, Paul Kinzelman, and Paul Milbury, two opposed; Lisa
DeMauro Ross and Thomas McEachin.)
* It was moved by Mr. Kinzelman and seconded by Mr. Gransewicz to
approve the May 29, 1992, minutes with the following added
amendments, along with the approval for release to the membership
once Mr. Kinzelman and Mr. Cockburn review all of the amended
changes made. MOTION CARRIED UNANIMOUSLY.
- Page 11, Supervisory Committee section, change "Last month"
to "At the March, 1992, Board meeting"
- Page 11, Term Limitation Vote (second vote on page) this
should not have been listed as an amended vote, but as a
new motion.
- Page 12, (the vote just above Executive Session)
remove "Motion Did Not Carry".
It was noted by Ms. Ross that she would like all individual Board
members to act as a unified Board when decisions are made on
voting issues. She also requested that the Board act as a team
and function as a team and not just as seven individuals. She
also noted that she would prefer her name not be recorded in the
minutes as voting on issues negatively or positively.
Mr. McEachin volunteered to write a draft of a Communications
Policy which will be submitted as an agenda item at the next
Board meeting.
Lisa DeMauro Ross's Dissenting Opinion
It is understood that with a seven member Board, there will
always be seven opinions on the table. These opinions are
distilled into a Board decision after much discussion. The
emotions, the discussions and the exact points that influence the
individual Board of Director in voting one way or another cannot
be captured, in my opinion, via the minutes, without being privy
to 100% of the discussion. I believe it is unfair for anyone to
be judged on how he or she has voted.
In addition, it is critically important for the new Board to
operate as a team working in the best interest for all members.
Once the discussion has been had and the vote taken, individual
votes are no longer relevant. By making the individual votes
public, we continue to treat ourselves as individuals and we
dilute the Board's decision making powers. It further allows
discussions to continue after the vote is taken.
It communicates to the membership strife and conflict. This is
counter productive. We need to communicate to the membership as
a unified Board. We need to put behind us the chaos of the past
one and a half years and rejuvenate the confidence of the
membership in the ability of the Board to manage the credit
union.
In summary, my objection to listing the names is not because I
don't want the members to know how I voted, but rather:
1) Minutes cannot capture 100% of discussions at the table
during the vote.
2) Once a vote is taken, discussions are closed and the
majority and not the individual vote passes or fails votes
taken.
3) We cannot be successful as a Board if we continue to
operate as individuals.
I believe there will be votes of importance to the membership
(Term Limitations, Account Fees, etc.) that will require an
explanation, both dissenting and majority views. I believe a
white paper to address these issues would be a more appropriate
means of communicating to the membership than using the minutes
as the tool for communications.
VIII. RECOMMENDATIONS (continued)
b. Trip Report by Volunteers
* It was moved by Mr. Kinzelman and seconded by Mr. Gransewicz to
approve Mr. Kinzelman's recommendation as submitted regarding
Trip Reports by Volunteers.
(This motion was withdrawn.)
* It was moved by Mr. Gransewicz and seconded by Mr. Kinzelman to
approve management's recommendation as submitted regarding Trip
Reports by Volunteers.
Discussions followed.
Mr. Kinzelman noted that the membership has a right to know how
much money and how often DCU volunteers attend various
trips/conferences.
Ms. Ross responded stating that the recommendation does not focus
on the need for these volunteers/officials to network with other
officials and credit unions to gain knowledge and information.
Mr. Kinzelman noted that by informing the members about trips and
conferences, does not prevent volunteers from taking them.
Mr. Gransewicz suggested having an open and honest policy which
requires the volunteer to submit a statement of what s/he learned
from attending the trip/conference and how the membership has
benefited by having the volunteer attend.
Mr. Cockburn recommended having a policy and budget which, for
example, would allow volunteers to attend two trips/conferences
per year; one of which is out of town and one local, along with a
budget that will not be exceeded. The Board could review
annually all trips taken which would be recorded in the minutes
and available to the membership.
After further discussions, the Board agreed with Mr. Cockburn's
suggestion to provide a policy and budget for the Board's
approval. It was further decided to table this vote and further
discussions until the next Board meeting.
(The motion was withdrawn.)
c. Information to be Published in VaxNotes
The Board reviewed each of the nine items requested by Mr.
Kinzelman to be released on the VaxNotes file.
* It was moved by Mr. Kinzelman and seconded by Mr. Gransewicz to
approve the submitted information to be released on DEC's
VaxNotes file.
(This motion was withdrawn.)
Discussions followed.
The Board discussed the wording of a cover memo explaining why
this information is being published.
Mr. Milbury added that it should not be portrayed that VaxNotes
is the only communication medium being used. It was noted that
members, through the VaxNotes file, have requested this
information and this is why the information is being released on
this file.
The Board continued reviewing each of the nine items requested by
Mr. Kinzelman to be published on VaxNotes.
- Re: Item #2, it was requested to add the total expensed
cost to DCU.
- Re: Item 5 & 6, it was noted that to establish and
maintain both of these ATM's, DCU spends approximately
$24,000 per year. It was noted not to release the
breakdown in detail, only the total estimated costs.
* It was moved by Mr. Gransewicz and seconded by Mr. Kinzelman to
accept the submitted information to be released on VaxNotes, as
amended, following Mr. Kinzelman's and Mr. Cockburn's review of
the amended changes. MOTION CARRIED UNANIMOUSLY.
* It was moved by Mr. Kinzelman and seconded by Mr. Milbury to
adjourn this meeting at 7:40 p.m. MOTION CARRIED UNANIMOUSLY.
___________________________ ___________________________
Lisa DeMauro Ross Paul M. Kinzelman
Chairman of the Board Secretary
|
| 2.4 | BoD mtg July 28, 1992. Discussion => 606 | PLOUGH::KINZELMAN | Two Terms, 1 in office, 1 in jail | Tue Sep 22 1992 20:44 | 490 |
| DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
BOARD OF DIRECTORS' MEETING
July 28, 1992
The meeting held in the Rhode Island Conference Room at Digital
Equipment Corporation's Powdermill Road facility, (Maynard, MA)
was called to order at 3:15 p.m.
At 3:15 p.m., Thomas McEachin, Vice Chairman, called the meeting
into Executive Session.
EXECUTIVE SESSION
I. ROLL CALL AND DETERMINATION OF QUORUM
II. UPDATES AND DISCUSSIONS
a. Executive Session Issues
b. Mortgage Task Force
c. Resignations
Page - 2
d. Personnel Committee
e. Exit Interviews
Page - 3
At 4:20 p.m., Mr. McEachin called the meeting out of Executive
Session and the Board took a ten minute break.
At 4:30 p.m., Mr. McEachin called the meeting into General
Session.
Page - 4
GENERAL SESSION
Present: Tanya Dawkins, Treasurer
Philip Gransewicz
Paul Kinzelman, Secretary
Gail Mann
Thomas McEachin, Vice Chairman
Paul Milbury
Staff: Chuck Cockburn, President/CEO
Liz Hartel, Director of Human Resources
Lisa Kendall, Recording Secretary
Mary Madden, Vice President of Operations
Betty Moran, Director of Finance
Allan Prindle, Financial Analyst
Jim Regan, Internal Auditor
Also Present: Steve Behrens, Supervisory Committee Chairman
Absent: Lisa DeMauro Ross, Chairman
III. ROLL CALL AND DETERMINATION OF QUORUM
IV. REVIEW OF MINUTES
The Board reviewed the June 30, 1992, Board of Directors' meeting
minutes. The Board requested that the following amendments be
made:
- (Page 11, (k.) Marketing Update) Add a statement outlining
that DCU's Management has the final authority as to what
information is included and excluded in DCU's marketing
newsletter "Network".
- (Page 13, (n.) Communications between the Board and
Members) Add at the end of this section Lisa DeMauro Ross'
dissenting opinion which she dictated over the phone to the
Recording Secretary.
* It was moved by Mr. Kinzelman and seconded by Ms. Mann to
accept the June 30, 1992, minutes as amended. MOTION CARRIED
UNANIMOUSLY.
V. FINANCIAL REPORTS
Ms. Dawkins provided the Board with an overview of DCU's
Financial Reports. She noted the following during the month of
June, 1992:
- Increase in Investment Income
Page - 5
- Benefits for the month of June, 1992, were over budget
(this is due to the reinstatement of 401(k) funds to
employees)
- Slightly negative loan growth
- Slight decrease in capital due to a large increase in
Savings
- Increase in Savings due to retirement packages
Mr. Cockburn updated the Board on DCU's Capital Ratio and noted
that DCU is exceeding its Capital Ratio goal. He also reviewed
the "Loan Delinquency Analysis" chart and the "Household
Analysis" chart.
Ms. Dawkins reviewed the Summary Statement of Income, and noted
that Management's original budget will continue to be used, but
that Ms. Moran and Mr. Prindle have added a revised forecast
which includes an estimated $1 million adjustment reduction in
loan income over the next six months.
* It was moved by Ms. Mann and seconded by Mr. Milbury to accept
the June, 1992, Financial Reports as submitted. MOTION CARRIED
UNANIMOUSLY.
VI. PRESIDENT'S REPORT
Elizabeth Hartel, Director of Human Resources, updated the Board
on meetings she and Mr. Cockburn had with three wage consultants.
After meeting with the three consultants, Mr. Cockburn and she
agreed that the company HR Solutions, Inc., from Southboro, MA.
would best meet DCU's needs. Gerry Haynesworth is the
President/consultant who will be working with DCU's Management to
revise our wage and salary structure
Mr. Cockburn also informed the Board of the following:
1) The rate for DCU's Home Equity Product will be lowered
from 9.5% to 8.5% effective August 1, 1992. The rate
reduction applies to the "old" Home Equity product that
has an administrative rate that is not tied to an index.
2) Mr. Cockburn has appoined Allan Prindle as acting Vice
President of Lending. Mr. Prindle will have full
signature authority for the position but he will not be
responsible for managing the Consumer Loan and Loan
Servicing Departments.
3) Loan Centralization is complete. All loans are now being
processed at DCU's headquarters facility in Maynard.
4) DCU's Phone Center is up and running smoothly. They
receive approximately 1000 calls per day.
Page - 6
VII. COMMITTEE REPORTS
a. Supervisory Committee
Mr. Behrens updated the new Board concerning Puerto Rico audits
which were conducted several months ago on the Aguadilla and San
German branches. He noted the following:
- There were several control weaknesses found.
- Both of these branches will be closed by the end of
December, 1992.
- There could be some exposure incurred due to these branches
remaining open for several months.
- The Supervisory Committee recommends that Management look
into the possibilities of having one or two individuals
transferred down to these branches until their closing
Mr. McEachin would like both Ms. Ross and Mr. Behrens to meet and
discuss these issues prior to the next Board of Directors
meeting.
Mr. Behrens reviewed Jim Regan's (Internal Auditor) job
description and noted that Mike Sacher of O'Rourke & Clark
Accountancy Corporation has also reviewed it. The Supervisory
Committee has also reviewed Mr. Regan's annual audit plan and
will make a determination as to whether another Internal Auditor
for the credit union is needed. Mr. Regan has researched other
credit unions of the same size to see how many Auditors they
employ. The numbers ranged from zero to three. The Supervisory
Committee will evaluate this and will provide another update at
the next Board of Directors meeting.
At 5:20 p.m., Mr. Milbury left the meeting.
The Supervisory Committee has reviewed the Management Letter and
notes that from a control point of view, Management is responding
to all issues addressed.
Regarding EEOC requirements, there were some concerns that
certain regulatory requirements have not been made/filed. The
Supervisory Committee is reviewing this, and will have an update
at the next Board meeting.
At 5:30 p.m., Steve Behrens left the meeting.
b. Finance Committee
Ms. Dawkins updated the Board on the Finance/Investment
Committee's meeting which took place on Monday, July 20, 1992.
She noted the following issues which were reviewed during this
meeting:
- The role of the Treasurer vs. the Finance/Investment
Committee
Page - 7
- Budget process review
- Revised financial forecast
- Fixed rate Real Estate loan analysis
- Investment strategy updates
- Mid-year gap analysis
- Expense Reimbursement Policy for DCU Officials
VIII. UPDATES AND DISCUSSIONS
a. Business Loans
Betty Moran, Director of Finance, reviewed DCU's Business Loans
with the Board. She noted that currently, DCU has $7.185 million
dollars in Business Loans to members which is comprised of $7.147
million secured by Real Estate, $18,000 secured by Stocks, and
$20,000 secured by shares.
As of June, 1992, two of these loans (totaling $180,000) were two
to five months delinquent.
b. Branch Update
Mary Madden, Vice President of Operations, updated the Board on
the following Branches:
c. Marketing Update
Mary Madden updated the Board on a new "Driving Deals" promotion
which the credit union is offering through October 1, 1992.
"Driving Deals" is a promotion for new and used vehicle loans.
In total, 50,000 "Driving Deals" mini applications were mailed to
DCU members who were between the ages of 25 and 55 without a DCU
vehicle loan, and without any delinquency history, NSF history or
charged-off loans. These mini applications were mailed in three
separate mailings to help maintain control in meeting the 24-hour
deadline on approval/denials on each submitted loan request.
Overall, there has been an 80% approval rate. Ms. Madden will
update the Board at the next Board of Directors meeting regarding
the effectiveness and overall success of this promotion.
Page - 8
d. Officials Travel and Conference
Betty Moran distributed a handout outlining "Officials Travel and
Conference" information and noted that the Board will receive on
a quarterly basis, a report outlining all travel and/or
conference attendances by officials.
IX. RECOMMENDATIONS
a. Security Officer
Mr. Cockburn informed the Board that DCU's Director of Finance
will report to the Board periodically as DCU's Security Officer.
The Security Officer is responsible for ensuring that individual
departments are conforming to the existing security procedures
and will recommend changes when deemed necessary. He also noted
that the Security Officer will make her first report to the Board
during the October, 1992, Board of Directors meeting.
* It was moved by Ms. Mann and seconded by Mr. Gransewicz to
appoint the Director of Finance as the Security Officer of
Digital Employees' Federal Credit Union. MOTION CARRIED
UNANIMOUSLY.
b. Reward to Recover Funds
Mary Madden reviewed Management's recommendation regarding the
Board offering a reward which leads to the recovery of monies
embezzled by Mr. Mangone.
Page - 9
The Board requested that this recommendation clarify that
"Current Employees" and "Current Officials" and their immediate
families cannot participate. Ms. Madden also noted that CUMIS
(Credit Union Mutual Insurance Society) has unofficially agreed
to this reward.
All Board members agreed to direct Management to continue
developing the reward offer.
c. Policy on Officials Attending Conferences
Mr. Cockburn reviewed Management's recommendation that within
specific guidelines, DCU's Board of Directors and Supervisory
Committee members are authorized to attend knowledge-enhancing
conferences at DCU's expense.
Mr. Kinzelman requested that this policy be amended to include a
paragraph that states this information will be disclosed to the
membership annually at DCU's Annual Meeting.
* It was moved by Mr. Kinzelman and seconded by Mr. Gransewicz to
approve Management's recommendation as amended. MOTION CARRIED
UNANIMOUSLY.
(See attached policy)
d. Communications Proposal
Mr. McEachin reviewed his Communications Proposal with the Board.
The four main Guiding Principals of his proposal are to:
1) Address the needs of the DCU members
2) Communicate to the whole membership
3) Provide Information
4) Communicate as a Team
He also noted three specific ways of How to Communicate to the
Members which are:
1) Through a "DCU Board Memo"
2) Having a column in the quarterly newsletter "Network"
3) On exception, letters to the membership
His proposal also included surveying the Board's performance
against these guidelines once every year.
Mr. Gransewicz recommended that a separate vehicle be used to
communicate to the membership. He suggested having a one-page
letter to the membership from the Board included in the Network
newsletters mailing.
Page - 10
The Board discussed the approximate cost associated with
including one whole page to the Network mailings. Mr. Gransewicz
noted that any communications that are addressed to the
membership should be distributed/mailed to the entire membership.
Mr. Cockburn noted that the membership will be informed through
DCU's Network newsletter that any Board of Director memo's and/or
Board minutes are available at our branches and by calling our
Information Center's 800 number and requesting them.
Mr. Kinzelman added that there may be times when some Board
members do not agree with the vote, even though it's the majority
that rules. He also noted that the communications from the Board
must allow for the airing of minority opinions.
Ms. Mann added that no one Board member speaks for all Board
members.
Mr. McEachin noted that he will add these notations from Mr.
Kinzelman and Ms. Mann to his proposal.
* It was moved by Ms. Dawkins and seconded by Mr. Kinzelman to
accept Mr. McEachin's Communication Proposal as amended. Six in
favor; Ms. Dawkins, Mr. Kinzelman, Ms. Mann, Mr.McEachin, Ms. Ross,
Mr. Milbury. One opposed; Mr. Gransewicz. MOTION CARRIED.
Mr. Gransewicz desired to add this statement to the minutes:
I vote against this proposal because the implemention method
does not meet one of the primary criteria, that of communicating
with the entire DCU membership. Currently, the only way to
do that is through the Network brochure on a quarterly basis.
While I fully agree with the necessity of this type of
communication, I feel it's effectiveness will be critically
impacted by the limited distribution to the membership at large.
I cannot vote in favor of the proposal as it stands and would hope
that all Board communication to the membership be distributed
to all members on a quarterly basis.
e. Bylaw Modifications
Mr. Cockburn reviewed with the Board Management's recommendation
on modifying DCU's Bylaws. He noted that Mr. Kinzelman has
reviewed DCU's current Bylaws to ensure that they are all in
conformance with NCUA guidelines.
* It was moved by Ms. Mann and seconded by Mr. Gransewicz to
approve Management's recommendation as submitted on modifying
DCU's Bylaws in the following Articles: Article VII, Section 7;
Article VIII, Section 7; Article VIII, Section 9; Article VIII,
Section 10. MOTION CARRIED UNANIMOUSLY.
f. Mortgage Signature Authority
Mr. Cockburn distributed Management's recommendation concerning
individuals who should be added to the Certificate of Vote for
Mortgage Signature Authority.
* It was moved by Ms. Mann and seconded by Mr. Kinzelman to
approve Management's recommendation as submitted on Mortgage
Signature Authority. MOTION CARRIED UNANIMOUSLY.
Page - 11
g. Charge Offs
The Board reviewed DCU's Charge Off Report for the month of June,
1992.
* It was moved by Ms. Mann and seconded by Ms. Dawkins to approve
the June, 1992, Charge Off Report as submitted. MOTION CARRIED
UNANIMOUSLY.
X. OLD BUSINESS
None
XI. NEW BUSINESS
None
XII. ADJOURNMENT
* It was moved by Ms. Mann and seconded by Ms. Dawkins to adjourn
this meeting at 6:15 p.m. MOTION CARRIED UNANIMOUSLY.
________________________________ _______________________________
Thomas A. McEachin Paul M. Kinzelman
Vice Chairman of the Board Secretary
ATTACHMENTS:
DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
TO: Board of Directors
FROM: Management
SUBJECT: Recommendation on Policy on Officials
Attending Conferences
_________________________________________________________________
Within the following guidelines, DCU's Board of Directors and
Supervisory Committee members are authorized to attend
knowledge-enhancing conferences at DCU's expense.
These officials are authorized to attend two credit-union related
conferences within the region defined as the following states:
- Main - New Hampshire - Vermont
- Connecticut - Massachusetts - Rhode Island
- New York - New Jersey - Pennsylvania
and one out of the region annually. Attendance at conferences
out of the region are limited to those not also provided within
the region.
Any exceptions to the above must be approved in advance by the
majority of the Executive Committee.
- Officials should obtain the most economical travel rates.
This includes, but is not limited to, obtaining hotel and car
rental reservations at corporate rates, purchasing airline
tickets as far in advance as possible and using the most
economical means of transportation.
- Airlines: reimbursement is provided for coach class
rates only, unless approved in writing in advance by the
treasurer
- Automobile rentals: compact size cars are to be used
at all times unless a larger size is necessary to
accommodate the number of people traveling (typically
more than four)
- Meals: reasonable expenses for three meals per day
while traveling on credit union business are
reimbursable. Officials are responsible for keeping
accurate meal expenses, including tips (generally 15% is
considered reasonable)
- Officials who request special travel arrangements will be
responsible for any excess cost.
- Officials should submit expense vouchers within 30 days,
listing all expenses incurred on behalf of the credit union.
Receipts are required for each item of lodging and
transportation and for any single expenditure in excess of
$25.00 Enclose all receipts in the "Employee Expense
Voucher" envelope.
- Personal automobile reimbursement will be at the rate
currently authorized by IRS rules
Expense reimbursement reports will be approved by the Treasurer
of the Board of Directors. The Treasurer's expense report will
be approved by the President/CEO.
Management will provide a quarterly report to the Board of
Directors summarizing conference attendance by Official and
giving an overall comparison of budget to actual expenses.
In addition, a report of conference attendance by Officials will
be included in DCU's Annual Report.
|
| 2.5 | BoD mtg Aug 25, 1992. Discussion => 620 | PLOUGH::KINZELMAN | Two Terms, 1 in office, 1 in jail | Mon Nov 02 1992 15:40 | 469 |
| BOARD OF DIRECTORS MEETING
August 25, 1992
At 3:15 p.m., Lisa DeMauro Ross, Chairman, called the meeting into
Executive Session.
EXECUTIVE SESSION
I. ROLL CALL AND DETERMINATION OF QUORUM
II. EXECUTIVE SESSION
a. Employee Update
b. Investigation
Board of Directors' Meeting August 25, 1992 Page - 2
At 3:40 p.m., Lisa DeMauro Ross called the meeting into General
Session.
GENERAL SESSION
Present: Tanya Dawkins, Treasurer
Philip Gransewicz
Paul Kinzelman, Secretary
Gail Mann
Thomas McEachin, Vice Chairman
Paul Milbury
Lisa DeMauro Ross, Chairman
Staff: Charles Cockburn, President/CEO
Kim Gates, Administrative Assistant
Lisa Kendall, Recording Secretary
Mary Madden, Vice President of Operations
Betty Moran, Director of Finance
Allan Prindle, Vice President of Lending
Jim Regan, Internal Auditor
Karen Wall, Assistant Human Resources Director
III. REVIEW OF MINUTES
The Board reviewed the July 28, 1992 Board Meeting Minutes.
Mr. Kinzelman requested that the information under Executive Session
from the July, 1992, Board meeting, not be redacted (excluded) when made
available to the membership. Mr. Kinzelman noted that the discussion in
Executive Session as it dealt with Personnel issues and Exit Interviews
and as such should be made public. After discussing this request, a
vote was taken as follows:
* It was moved by Mr. Kinzelman and seconded by Mr. Gransewicz not to
redact (exclude) the July 28, 1992, Executive Session Minutes when made
available to the membership. Two in favor; Mr. Kinzelman and Mr.
Gransewicz, Five opposed; Ms. Dawkins, Ms. Mann, Mr. McEachin, Mr.
Milbury and Ms. Ross. MOTION FAILED.
Ms. Ross noted that all Executive Session information should remain
confidential. Non-confidential information discussed in Executive
Session may also be discussed in General Session where it will not be
redacted and will be made available for the membership's review.
The Board requested that the following amendments be made to the July
28, 1992 minutes:
1) Page 4; d. Personnel Committee; Change the word Policies, the
last word in the second paragraph, to "issues". "....limit its
involvement in Personnel issues."
2) Page 4; e. Exit Interview; Delete the second paragraph.
3) Page 7; Financial Reports; Add the word "reduction".
"....$1 million adjustment reduction in loan income...."
4) Page 10; Correct a spelling error; "Eileen" to "Ilene".
Board of Directors' Meeting August 25, 1992 Page - 3
5) Page 11; c. Policy on Officials Attending Conferences; Attach a
copy of the approved policy.
6) Page 12; d. Communications Proposal; Add Mr. Gransewicz's
verbatim and correct the vote to be Six in favor, one
opposed; Mr. Gransewicz.
* It was moved by Ms. Mann and seconded by Mr. Milbury to accept the
July 28, 1992, minutes as amended. Six in favor; Ms. Dawkins, Mr.
Gransewicz, Mr. Kinzelman, Ms. Mann, Mr. McEachin, and Mr. Milbury. One
abstention; Ms. Ross. MOTION CARRIED.
IV. FINANCIAL REPORTS
Ms. Dawkins reviewed with the Board DCU's Financial Reports for the
month of July, 1992. She noted the following:
- Significant increase in NET Income resulting from the sale of two
of the participation loan properties for more than the carrying
amount (book value).
- Increase in Investment Income due to positive variances in
Reverse Repo's.
V. PRESIDENT'S REPORT
a. Quality Service Plan
Mr. Cockburn updated the Board on DCU's monthly All-Staff meeting which
took place on August 18, 1992. Don Brown, of Conway Quality, Inc.,
located in Nashua, NH, spoke to DCU employees on the importance of Total
Quality Management. Conway Quality has been hired as external quality
consultants for DCU.
Mr. Cockburn noted that the most important action the credit union can
take is providing its members with excellent quality service.
Mr. Cockburn, Ms. Ross, and other Senior Management officials, will be
attending a three-day seminar on September 14, 15, 16, 1992, given by
Conway Quality on "The Right Way to Manage".
VI. COMMITTEE REPORTS
a. Supervisory Committee
Steve Behrens, Chairman of DCU's Supervisory Committee, updated the
Board on some of the topics discussed at today's Supervisory Committee
meeting:
- The committee has reviewed and accepted, on a trial basis, Mr.
Regan's Annual Audit Plan.
Board of Directors' Meeting August 25, 1992 Page - 4
- The committee has requested approximately forty-hours per month of
additional credit union staff help, to assist Mr. Regan in
accomplishing all of the Annual Audit Plan items. Mr. Cockburn
has agreed to provide the additional staff.
- The committee has recently observed that management has missed
deadlines on addressing issues in O'Rourke & Clark's Management
Letter. This is caused primarily from staffing/organizational
structure changes which have recently taken place within the
credit union, but should be cleared up shortly. The committee
noted that management should get back-on-track with addressing
these issues.
- The committee finds management's proposal concerning the closure
of the Puerto Rico branches adequate and acceptable.
- The Supervisory Committee will be meeting with DCU staff regularly
to monitor the work environment and various control issues.
- The committee recommended to the Board that Management establish a
process to monitor on an ongoing basis all regulatory reporting
for the credit union, and ensure that this information is filed
regularly.
- The committee has requested that Joseph Melchione, DCU's General
Counsel, release information pertaining to a Special Investigation
which was conducted in February, 1992. This written report will
be forwarded to all DCU Board of Directors.
b. Finance/Investment Committee
Ms. Dawkins updated the Board on issues discussed at the August 14,
1992, Finance/Investment Committee. The committee reviewed the
following:
- NCUA's Investment Rule #703
- Investment Shock Tests
- Capital Expenditures update
- July, 1992, Financials
- DCU's Capital Ratio
c. Human Resource Committee
Ms. Ross appointed the following directors to the Human Resource
Committee; Mr. Milbury, Mr. McEachin, and Ms. Ross. This committee will
review all Human Resource policies with Karen Wall, Assistant Director
of Human Resources, and from this review will make recommendations as
needed.
Board of Directors' Meeting August 25, 1992 Page - 5
VII. UPDATES/DISCUSSIONS
b. Puerto Rico Closing
Mary Madden, Vice President of Operations, distributed copies of a
Puerto Rico Branch Closing memo to the Board for their review. This
memo was originally sent to Ms. Ross and Mr. Behrens. The Board
discussed this memo and a vote was taken as follows:
* It was moved by Ms. Mann and seconded by Mr. Milbury to approve
management's recommendation in taking all reasonable and necessary
precautions to safeguard the credit union's assets. MOTION CARRIED
UNANIMOUSLY.
a. Driving Deals
Ms. Madden updated the Board on DCU's Driving Deals promotion. She
noted that this promotion has been very successful. She reviewed with
the Board a handout outlining the overall success. The credit union has
approved 571 loans for $4.6 million. The approval rate has been 84.3%
She also noted that this promotion will end on Thursday, October 1,
1992.
c. Wage/Salary Structure
Mr. Cockburn introduced Karen Wall, DCU's Assistant Human Resources
Director, who reviewed DCU's Wage and Salary structure.
Ms. Wall informed the Board that Gerry Haynesworth, of H.R. Solutions,
has been working with Management in reviewing DCU's compensation
structure. In order to gather all of the information needed on the Wage
and Salary structure of jobs, a fourteen member committee derived of
Branch Network and Headquarter personnel has been established.
d. Human Resource Policies
Ms. Wall also discussed developing Human Resource Policies consistent
with total quality and employee development. The following are the
Human Resource Policy steps to be taken:
- develop a proposal for a policy
- proposal to be reviewed by Legal Counsel
- proposal to be reviewed by Management
- proposal to be reviewed by Human Resource Committee
Board of Directors' Meeting August 25, 1992 Page - 6
e. Training Plans
Ms. Wall updated the Board regarding DCU's Training Department. DCU's
Training Department will increase from two employees to six employees
with Human Resources and Training functioning as one department.
f. Personnel Compliance Report
Ms. Wall noted that DCU has not filed EEOC Compliance Analysis Reports
in the past, but will do so going forward. DCU is in full compliance
with all other regulatory reporting requirement filings to the best of
our knowledge.
g. Exit Interview Form and Process
Mr. Cockburn reviewed the exit interview form with the Board and noted
that all employees who leave their employment at the credit union will
be informed that they may contact DCU's Supervisory Committee if they
have any irregularity issues they'd like to discuss.
Mr. Kinzelman requested adding a section to the form where employees can
write down issues that they'd like to discuss with the Board.
Mr. Cockburn noted that the Supervisory Committee receives all reports
of irregularity issues but that he will inquire with General Counsel
about optional issues being sent to the Board.
Mr. McEachin noted that this form is given to all employees who leave
the credit union, regardless of the reason why they leave.
h. Data Processing Report
Mr. Cockburn noted that a Data Processing meeting is being scheduled to
review DEC's analysis of our data processing equipment. The date and
time of this meeting will be announced next week.
i. ATM Information
Mr. Kinzelman had previously posed a question to Mr. Cockburn concerning
establishing relationships with banks in areas where DCU branches or
ATM's are not available. Mr. Cockburn noted that currently, members may
access any of the following ATM Network machines.
- Cirrus (60,000 locations)
- NYCE (11,000 locations)
- Exchange (60,000 locations)
- Yankee24
- TX
- American Express
- VISA
Board of Directors' Meeting August 25, 1992 Page - 7
j. Digital's Policy for DCU Board Members
Ms. Ross updated the Board that according to Rob Ayres, DEC currently
has no policy regarding DCU Board Members. Also, when DCU Board of
Directors attend Board meetings etc., they are on Digital's time.
Mr. Gransewicz will put together a proposal for the next Board meeting.
VIII RECOMMENDATIONS
a. Board Meeting Location
It was noted by Ms. Ross that she had requested the DCU Board of
Directors' meetings be held at a location other than DCU's Headquarters
facility due to the limited space available in DCU's conference rooms.
Currently, Board of Directors' meetings have been taking place at DEC's
Powdermill Road facility in Maynard due to DCU's limited space.
Mr. Kinzelman noted that he would prefer DCU Board meetings to be held
at DCU's headquarters facility.
* It was moved by Mr. Kinzelman and seconded by Mr. Gransewicz to hold
DCU Board of Directors' meetings at DCU's headquarters facility. Two in
favor; Mr. Kinzelman, Mr. Gransewicz, Two opposed; Ms. Ross, Mr.
Milbury, Three abstained; Ms. Dawkins, Ms. Mann, Mr. McEachin. MOTION
FAILED.
Mr. Gransewicz noted that DCU Board of Directors' meetings should be
held on DCU property, that it's important for DCU employees to see the
credit union's Board of Directors in the headquarters building once a
month, and that a clearer separation of DCU's Board and DEC's property
and time be made.
Ms. Ross added that she had spoken to Ray Humphrey, Powdermill Road
Security, concerning various security issues at the Powdermill Road
facility. He informed Ms. Ross that the conference room walls are sound
proof except for the divider walls which opens and closes within the
conference rooms. (DCU reserves the entire conference room).
The Board agreed by consensus, to alternate between using DCU's
headquarters facility and DEC's Powdermill Road facility, as locations
to conduct DCU Board of Directors' Meetings.
B. Mass CUNA
* It was moved by Mr. McEachin and seconded by Ms. Mann to elect Charles
J. Cockburn, President/CEO, to represent DCU at Massachusetts CUNA
Credit Union Association, Inc., 58th Annual Meeting and Convention on
October 9-11, 1992.
Board of Directors' Meeting August 25, 1992 Page - 8
c.____________
d.____________
e. Security Officer
Mr. Cockburn reviewed Management's recommendation that due to
reorganization at the credit union, Patricia Cramm, DCU's Administrative
Services Manager, be appointed DCU's Security Officer. Ms. Cramm would
provide an update to the Board by the end of the year.
* It was moved by Mr. McEachin and seconded by Ms. Dawkins to appoint
Patricia Cramm as DCU's Security Officer. MOTION CARRIED UNANIMOUSLY.
Board of Directors' Meeting August 25, 1992 Page - 9
f. Reward Offer
Ms. Madden updated the Board noting that DCU's General Counsel has
reworded the Reward Offer for the Board's review. The Reward Offer,
once approved, would be distributed through DCU's Network newsletter,
DEC's Live Wire, and DTW (Digital This Week) newsletter, along with
other publications Management finds appropriate.
A question was posed concerning whether the reward figure was per
person. Ms. Madden connected Joe Melchione, DCU's General Counsel, via
telephone conference call.
Mr. Melchione noted that it was up to the Board whether or not to make
the reward figure per person or not.
Mr. Cockburn suggested adding the word NET to the reward offer. The
Board decided to change the wording in the first paragraph to the
following:
- ....This reward shall consist of twenty percent (20%)...
- ....(not to exceed $250,000 per person on the NET with an
accumulated maximum of $ one-million on the NET).
It was also suggested by Mr. Kinzelman, that a fourth paragraph be added
to this reward offer showing an example which would break down the
recovered amount, reward amount, and possibly a percentage which NCUA
may be entitled to. (These examples would be hypothetical numbers.)
* It was moved by Mr. Milbury and seconded by Mr. Kinzelman to approve
the Reward Offer as amended, including the addition of a fourth
paragraph showing an example, and that once the reward offer is
re-written, the final copy is to be approved by Mr. Kinzelman, Mr.
Melchione, and Mr. Cockburn. MOTION CARRIED UNANIMOUSLY.
g. Charge-Offs
* It was moved by Ms. Mann and seconded by Ms. Dawkins to approve the
August, 1992, Charge-Offs as submitted. MOTION CARRIED UNANIMOUSLY.
h. Credit Committee
Mr. Cockburn reviewed Management's recommendation of appointing three
DCU employees to DCU's Credit Committee. Two of the three previous
Credit Committee members are no longer with the credit union.
* It was moved by Mr. Milbury and seconded by Ms. Dawkins to appoint
three new members to DCU's Credit Committee; Rhonda Auger, Robin Daigle,
and Karen Esposito, each for one-year terms beginning August 25, 1992.
MOTION CARRIED UNANIMOUSLY.
Board of Directors' Meeting August 25, 1992 Page - 10
At 6:35 p.m., the Board took a ten-minute break.
Ms. Ross reconvened the meeting into General Session at 6:45 p.m.
GENERAL SESSION
Ms. Ross recommended discussing agenda item b under New Business;
Communication Proposal, at next month's Board meeting. All Board
members agreed.
IX. OLD BUSINESS
None
X. NEW BUSINESS
a. Planning Conference
Mr. Cockburn reviewed with the Board what typically occurs at Annual
Planning Conferences and recommended that once a year, every year, that
the Board go to a location away from their work area for 2-3 days to
hold an Annual Planning Conference.
Mr. Cockburn also recommended that the Board request various issues,
which they would like to discuss at the Planning Conference.
The Board agreed on the dates of November 19-21, 1992 (three nights)
with the location to be announced.
b. Communications Proposal
(To be discussed at next months Board of Directors' Meeting.)
At 7:00 p.m., Ms. Ross called the meeting into Executive Session.
EXECUTIVE SESSION
Board of Directors' Meeting August 25, 1992 Page - 11
VIII RECOMMENDATIONS (continued)
i. Employee Loan
Ms. Ross called the meeting back into General Session.
GENERAL SESSION
X. NEW BUSINESS
c. Release of Litigation Information
The Board reviewed Management's recommendation authorizing Mr.
Kinzelman, Board Secretary, to release the status of fraud-related
litigation through postings in the Digital Notes file. All information
to be released would first be reviewed by General Counsel and DCU's
President/CEO.
* It was moved by Ms. Mann and seconded by Mr. Gransewicz to approve
managements recommendation on Release of Litigation Information as
submitted. MOTION CARRIED UNANIMOUSLY.
XI ADJOURNMENT
* It was moved by Ms. Mann and seconded by Mr. Gransewicz to adjourn
this meeting at 7:10 p.m. MOTION CARRIED UNANIMOUSLY.
____________________________ ____________________________
Lisa DeMauro Ross Paul M. Kinzelman
Chairman Secretary
|
| 2.6 | BoD mtg Sep 22, 1992. Discussion -> 621. | PLOUGH::KINZELMAN | Two Terms, 1 in office, 1 in jail | Fri Nov 13 1992 16:11 | 444 |
| DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
BOARD OF DIRECTORS' MEETING
September 22, 1992
At 3:18 p.m., Lisa DeMauro Ross, Chairman, called the meeting
into Executive Session.
EXECUTIVE SESSION
I. ROLL CALL AND DETERMINATION OF QUORUM
II. EXECUTIVE SESSION
a. Employee Loan
b. Director Loan
Board of Directors' Meeting September 22, 1992 Page - 2
At 3:22 p.m., Thomas McEachin, Vice Chairman, moved the meeting
into General Session.
GENERAL SESSION
Present: Tanya Dawkins, Treasurer
Philip Gransewicz
Paul Kinzelman, Secretary
Gail Mann
Thomas McEachin, Vice Chairman
Paul Milbury
Lisa DeMauro Ross, Chairman
Staff: Charles Cockburn, President/CEO
Lisa Kendall, Recording Secretary
Mary Madden, Vice President of Operations
Betty Moran, Director of Finance
Allan Prindle, Vice President of Lending
Jim Regan, Internal Auditor
Karen Wall, Director of Human Resources
III. REVIEW OF MINUTES
The Board reviewed the August 25, 1992, Board Meeting Minutes.
Board of Directors' Meeting September 22, 1992 Page - 3
The Board requested the following amendments be made to the
August 25, 1992, Board Minutes:
- Page 5, section IV FINANCIAL REPORTS, under the first (-)
hyphen: add the following to the end of the sentence,
....participation loan properties for more than the
carrying amount (book value)
- Page 7, section VII UPDATES AND DISCUSSIONS, (b) Puerto
Rico Closing: next to the vote taken, add "MOTION CARRIED
UNANIMOUSLY"
- Page 9, (j) Digital's policy for DCU Board Members, first
paragraph: delete the end part of the last sentence
beginning with "acting as...."
* It was moved by Mr. Milbury and seconded by Ms. Dawkins to
approve the August 25, 1992, Board Minutes as amended. MOTION
CARRIED UNANIMOUSLY.
Board of Directors' Meeting September 22, 1992 Page - 4
IV. FINANCIAL REPORTS
Ms. Dawkins reviewed with the Board DCU's Financial Reports for
the month of August, 1992. She noted the following:
- A short term liquidity need developed in August due to
funds (deposited early in June) now being withdrawn by the
members.
- 1.4% positive loan growth (primarily due to the Driving
Deals promotion).
- Assets decreased by 7% (due to Reverse Repo investments
maturing and a drop in savings).
- Net Operating Income was over budget by $66,000
- Decrease in Loan Income was not offset by the increase in
Investment Income.
- $23,000 negative variance in Outside Services partly due to
joining the NYCE (New York Cash Exchange) network.
- Capital Ratio grew to 4.4% excluding Reverse Repo's.
V. PRESIDENT'S REPORT
a. Quality Service Conference
Mr. Cockburn updated the Board on a Quality Service Conference that
Ms. Ross, all Senior Managers (excluding the Internal Auditor) and he
attended last week which was facilitated by Conway Quality. He
explained that "The Right Way to Manage" is a system for making
continuous improvement through quality in all activities. Mr.
Cockburn reviewed the conference material and answered questions.
VI. COMMITTEE REPORTS
a. Supervisory Committee
There were no Supervisory Committee members present to give a monthly
update.
b. Finance/Investment Committee
Ms. Dawkins informed the Board that the Finance/Investment Committee
could not meet in September due to conflicts in committee member
schedules. The next Finance/Investment Committee meeting is scheduled
for Monday, October 26, 1992, at 4:00 p.m.
Board of Directors' Meeting September 22, 1992 Page - 5
c. Human Resource Committee
Ms. Ross informed the Board that on September 21, 1992, DCU's Human
Resource Committee met for the first time. The committee appointed
Lisa DeMauro Ross Chairman and concluded that their role would be as
follows:
- review all Human Resource Policy changes and
recommendations
- review DCU's wage/salary and benefits structure
- make recommendations to full Board on CEO evaluation and
compensations
- review employee exit interview forms
- review DCU's Human Resource projects
The Board decided to review agenda items under section "VIII
RECOMMENDATIONS" next. Section "VII UPDATES AND DISCUSSIONS" will
follow.
VIII. RECOMMENDATIONS
a. Bylaws
Mr. Cockburn reviewed a standard Bylaw change which, if approved,
would eliminate the "Credit Committee". He noted reasons why the
Credit Committee should be eliminated:
- The Credit Committee is an outdated volunteer committee
- Most large credit union's have eliminated Credit Committees
- DCU now uses Credit Scoring as a decision-making tool
Discussions continued.
It was noted that by eliminating the Credit Committee, the Board now
has the added responsibility of acting as the "Credit Appeals
Committee". The Board by resolution, may appoint volunteer members to
act on a Credit Appeals Committee.
It was also noted that Mr. Kinzelman is in the process of reviewing
all of DCU's Bylaws to insure that DCU is in complete compliance.
Eventually, Mr. Kinzelman would like to see the Credit Appeals
Committee exist as a permanent part of DCU's Bylaws. This would mean
that future Boards would not be able to eliminate or change the
make-up of the Credit Appeals Committee.
Board of Directors' Meeting September 22, 1992 Page - 6
Mr. Gransewicz requested a consensus from the Board on how they would
vote on the Credit Appeals Committee being a permanent unchangeable
part of DCU's Bylaws if this were to be voted on in the future.
Ms. Mann noted that it's premature to say how she would vote on
something like this.
* It was moved by Ms. Mann and seconded by Mr. McEachin to approve the
standard Bylaw changes which eliminate the Credit Committee from DCU's
Bylaws. Four in favor; Ms. Dawkins, Ms. Mann, Mr. McEachin, Ms. Ross.
Two opposed; Mr. Gransewicz, Mr. Kinzelman. One abstention; Mr.
Milbury. MOTION CARRIED.
b. Appointment of Loan Officers
Mr. Cockburn reviewed the Appointment of Loan Officers recommendation.
* It was moved by Ms. Mann and seconded by Ms. Dawkins to approve the
appointment of the following Loan Officers; Korin Mead, Anne Nelson,
Audrey Borden, Donna Nemensky, Rhonda Auger, Micheline Wold, Karen
Esposito, Cathy Grenda, Eileen Galligan, Allan Prindle, Frank Gooley,
Amy Zicolella, Jeannette Haenisch, Pat Gencarella, and Marie Fleming.
MOTION CARRIED UNANIMOUSLY.
c. Credit Appeals Committee
Mr. Cockburn reviewed Management's Credit Appeals Committee
recommendation which was distributed to the Board at the beginning of
the meeting. Members on this committee would review written appeals
by members whose loans were denied. The committee would consist of
three staff members and two volunteers (who are not currently Board or
Supervisory Committee members).
Mr. Kinzelman provided the Board with two volunteer names as potential
committee members; Jack Hutchinson and Chris Gillett. Both volunteers
are members in good standing.
Mr. Cockburn recommended amending the recommendation to state that
these committee members would be appointed for a one year term
effective September 22, 1992. The Board agreed.
* It was moved by Mr. Kinzelman and seconded by Mr. Gransewicz to
approve the following employee's and volunteers to the Credit Appeals
Committee, each for a term of one year, effective September 22, 1992.
The following employee's are appointed; Donna Nemensky, Pat Coyle, Pat
Gencarella. The following volunteers are appointed, contingent upon
being in good standing with DCU; Jack Hutchinson and Chris Gillett.
MOTION CARRIED UNANIMOUSLY.
Board of Directors' Meeting September 22, 1992 Page - 7
c. EasCorp Telephone Remittance Authorization
Ms. Moran, DCU's Director of Finance, reviewed management's
recommendation which would replace the Treasurer with the Director of
Finance for telephone remittance authorization.
Mr. Regan, DCU's Internal Auditor, noted that both the President/CEO
and the Director of Finance are accessible on a daily basis and that
he feels comfortable with this recommendation.
Ms. Dawkins requested more information. The Board decided to table
this vote until next month's meeting.
d. EasCorp Line of Credit Increase
The Board reviewed the EasCorp Line of Credit Increase recommendation.
* It was moved by Ms. Mann and seconded by Mr. McEachin to approve
increasing the EasCorp Line of Credit from ________ to __________.
MOTION CARRIED UNANIMOUSLY.
At 4:54 p.m., Ms. Ross called the meeting into Executive Session.
At 5:00 p.m., Mr. Milbury left the meeting.
EXECUTIVE SESSION
Supervisory Committee Report
Board of Directors' Meeting September 22, 1992 Page - 8
At 5:25 p.m., Ms. Ross called the meeting back into General Session.
GENERAL SESSION
Present: Tanya Dawkins, Treasurer
Philip Gransewicz
Paul Kinzelman, Secretary
Gail Mann
Thomas McEachin, Vice Chairman
Lisa DeMauro Ross, Chairman
Staff: Charles Cockburn, President/CEO
Lisa Kendall, Recording Secretary
Mary Madden, Vice President of Operations
Betty Moran, Director of Finance
Allan Prindle, Vice President of Lending
Jim Regan, Internal Auditor
Karen Wall, Director of Human Resources
Also Present: Michael Buckley, CUNA Mutual Insurance Company
Michael Steuer, CUNA Mutual Insurance Company
VII. UPDATES AND DISCUSSIONS
a. DCU Insurance Review
Ms. Ross introduced the Board to Mr. Michael Buckley and Mr. Michael
Steuer, of CUNA Mutual Insurance Group. Mr. Steuer and Mr. Buckley
updated the Board on DCU's Insurance and Bond coverages and
distributed a handout which summarized all of DCU's current policy
coverages which included the following:
- Property
- Financial
- Liability
- Workers Compensation
- All systems Go
- Bond
CUNA Mutual Insurance Group is a mutual company owned by policy
holders (credit unions). They provide over 152 products to credit
unions nationwide.
Board of Directors' Meeting September 22, 1992 Page - 9
At 6:03 p.m., Mr. Buckley and Mr. Steuer ended their presentation and
left the meeting.
VIII RECOMMENDATIONS (continued)
g. Charge Offs
Allan Prindle, Acting Vice President of Lending, reviewed and answered
various questions posed from the Board concerning DCU's Charge Off
report for the month of September, 1992.
* It was moved by Ms. Mann and seconded by Ms. Dawkins to approve the
September, 1992, Charge Off Report as submitted. MOTION CARRIED
UNANIMOUSLY.
VII. UPDATES AND DISCUSSIONS (continued)
b. Westfield/Springfield Branches
c. Greenville Branch
Ms. Madden updated the Board concerning the closedown of DCU's
Greenville, South Carolina, branch. She noted that all closedown
procedures are going as planned and that November 30, 1992, is the
official closing date.
Patricia Hirsh, DCU's Regional Manager, is currently in Puerto Rico
overseeing both the Aguadilla and San German branches. Both of these
branches are scheduled for closedowns on October 15, 1992, and
December 15, 1992, respectively.
d. Planning Conference
Mr. Cockburn informed the Board that DCU's Executive Committee has
approved a date and location for the Boards' 1992 Planning Conference.
The information is as follows:
- November 19-21, 1992, at the Chatham Bars Inn, Chatham, MA
It was noted that the Board will meet prior to next month's Board
meeting to discuss possible agenda items for the Planning Conference.
The November Board meeting will take place at the Chatham Bars in on
November 19, 1992, beginning at 1 p.m.
Board of Directors' Meeting September 22, 1992 Page - 10
e. Notes File Releases
It was noted that litigation information is being updated and a copy
of the information, which will be released in DCU's quarterly Network
bulletin, will be forwarded to Mr. Kinzelman to be released over DEC's
VaxNotes system.
The Board by consensus approved distributing the "Reward to Recover
Funds" offer through the following channels:
- DEC's Notes File system
- DCU's Network Bulletin
- Allow anyone to distribute it
VIII. RECOMMENDATIONS (continued)
e. DEC's Policy for DCU Board Members
Mr. Gransewicz distributed to the Board his recommended policy
regarding DCU volunteers. Ms. Ross noted that Robert Ayres, DCU
Liaison, indicated that DEC currently does not have a policy
concerning DCU Board members. The Liaison's requested that DCU submit
a proposed policy for their review and consideration.
f. Exit Interview Form
It was noted that DCU's Human Resource Committee will review all Exit
Interview Forms and Resignation agreements.
* It was moved by Mr. McEachin and seconded by Ms. Dawkins to approve
the submitted Exit Interview Form. MOTION CARRIED UNANIMOUSLY.
h. Severance Policy
Karen Wall, Director of Human Resources, distributed to the Board
copies of DCU's Severance Policy. Ms. Wall noted four minor
changes/amendments to the proposal.
* It was moved by Ms. Dawkins and seconded by Mr. Kinzelman to approve
Managements Severance Policy as amended. MOTION CARRIED UNANIMOUSLY.
i. Change in Trustees
Mr. Cockburn reviewed Management's recommendation on the Change in
Trustee for Pension and 401(k) Plans. It was noted that Elizabeth
Hartel, previous Director of Human Resources, is being replaced by
Karen Wall.
* It was moved by Ms. Dawkins and seconded by Mr. Kinzelman to approve
Charles J. Cockburn, President/CEO, and Karen Wall, Director of Human
Resources, as Trustees having signature authority on both of DCU's
Pension and 401(k) Plans. MOTION CARRIED UNANIMOUSLY.
Board of Directors' Meeting September 22, 1992 Page - 11
IX. OLD BUSINESS
None
X. NEW BUSINESS
a. Opening Mail
Discussions took place on the process to be taken regarding forwarding
mail to the Board when mail is addressed and comes to DCU's
Headquarters facility.
Mr. Kinzelman noted that members should not expect an immediate
response when addressing correspondence to a Board of Director.
Mr. Gransewicz noted that if a member addresses something to a Board
member, the member expects it to go to the Board member and not to be
opened by management.
Mr. Cockburn suggested that each Board Member decide how they would
like their mail handled. The Board concurred.
b. Communication Proposal
Mr. Kinzelman noted that there is a two month delay in distributing
the Board minutes for the membership's review. He requested that
something be sent out to members when pertinent issues arise informing
the membership of the Board's decision and/or important factors that
concern the membership.
Ms. Ross noted that the two-month delay in distributing Board minutes
is adequate. Regarding issues that focus on or impact members
specifically, the Board can send out a Board memo outlining these
issues.
Board of Directors' Meeting September 22, 1992 Page - 12
Mr. McEachin agreed. He suggested that Mr. Kinzelman write a draft of
a Board memo and forward it to the entire Board for review and
approval. The Board should respond to Mr. Kinzelman within four days.
When approved he will distribute the Board memo over the Notes File
and hard copies will be sent to all branches and may also be obtained
by calling DCU's Information Center.
Ms. Ross requested seven days to respond to each Board Memo draft and
Mr. Cockburn requested that he be added to the distribution list for
approval.
c. VISA Corporate Cards
Mr. Cockburn informed the Board that Digital Equipment Corporation is
in the process of evaluating companies to be their Corporate Credit
Card issuer. DCU will bid on this project.
XI. ADJOURNMENT
* It was moved by Mr. McEachin and seconded by Ms. Dawkins to adjourn
this meeting at 7:05 p.m. MOTION CARRIED UNANIMOUSLY.
___________________________ __________________________
Lisa DeMauro Ross Paul M. Kinzelman
Chairman Secretary
|
| 2.7 | BoD mtg Oct 27, 1992 Discuss -> 634.0 | PLOUGH::KINZELMAN | Paul dtn223-2605 | Mon Jan 11 1993 10:18 | 370 |
| Board of Directors' Meeting
October 27, 1992
At 3:05 p.m., Lisa DeMauro Ross, Chairman, called the meeting
into General Session.
GENERAL SESSION
Present: Tanya Dawkins, Treasurer
Philip Gransewicz
Gail Mann
Thomas McEachin, Vice Chairman
Lisa DeMauro Ross, Chairman
Staff: Chuck Cockburn, President/CEO
Lisa Kendall, Recording Secretary
Mary Madden, Vice President of Operations
Betty Moran, Director of Finance
Stephanie Pomfret, Administrative Secretary
Allan Prindle, Vice President of Lending
Jim Regan, Internal Auditor
Karen Wall, Director of Human Resources
Also Present: Robert Ketz, Supervisory Committee Member
Absent: Paul Kinzelman, Secretary
Paul Milbury
I. ROLL CALL AND DETERMINATION OF QUORUM
Mr. Cockburn noted the following additions to this months Board
agenda:
IV. PRESIDENT'S REPORT: (b) Member/Employee Surveys
(c) VISA Credit Cards
(d) Equity to Value on Real
Estate Products
VI. UPDATE & DISCUSSIONS:(h) Planning Conference
(i) Liaison Meetings
VII. RECOMMENDATIONS: (c) Loan Policy/VISA Cards
(d) Loan Policy/First Time Car Buyer
XI. NEW BUSINESS: (a) NCUA Exam Meeting
(b) Nominating Committee
Lisa Kendall, Recording Secretary, introduced Stephanie Pomfret
to the Board. She noted that Stephanie will be attending the
next three Board meetings for training purposes in Ms. Kendall's absence.
II. REVIEW OF MINUTES
The Board reviewed the September 22, 1992 Board meeting minutes.
The Board requested the following changes be made:
II. EXECUTIVE SESSION (b) Director Loan:
Board of Directors' Meeting
October 27, 1992
Page - 2
IV. FINANCIAL REPORTS (At the second to last hyphen (-) ):
- Add "partly due" to the sentence "outside services partly due
to joining...."
VI. COMMITTEE REPORTS (b) Finance/Investment Committee:
- (First paragraph) correct the date from Friday, October 23,
1992 at 3:00 p.m. to Monday, October 26, 1992 at 4:00 p.m.
VIII. RECOMMENDATIONS (c) Credit Appeals Committee:
- Correct the spelling of Mr. Gillett's last name.
- In the second paragraph, delete "have financial backgrounds"
and replace it with "are members in good standing".
- Reword the vote taken for clarity.
VIII. RECOMMENDATIONS (Executive Session):
VIII. RECOMMENDATIONS (a) Bylaws:
- Delete the apostrophe in "committees" in the sentence of the
second hyphen (-).
* It was moved by Ms. Dawkins and seconded by Mr. Gransewicz to
approve the September 22, 1992 Board minutes as amended. MOTION
CARRIED UNANIMOUSLY.
III. FINANCIAL REPORTS
Ms. Dawkins reviewed with the Board DCU's Financial Reports for
the month of September 1992. She noted the following:
- DCU's Capital Ratio has increased from 4% in June 1992, to 4.4%
- Net Income for the month of September 1992, was $469,000 which
was $175,000 over budget.
- Dividend expenses are favorable as compared to budget.
- Net Loans decreased by .4% from the prior month (caused by
members paying off their Home Equity and First Mortgage loans)
- Assets increased by .2% from the prior month
- Increase in Benefits primarily due to Relocation Expenses
- Non-operating loss due to the sale of a foreclosed property for
less than its carrying value.
Betty Moran, DCU's Director of Finance, answered various
questions from the Board concerning the financial statements of
the Capewind Service Corporation CUSO and the DCU Land
Development Corporation CUSO.
Board of Directors' Meeting
October 27, 1992
Page - 3
IV. PRESIDENT'S REPORT
a. Financial Trends
Mr. Cockburn reviewed an NCUA publication concerning "Financial
Trends in Federally Insured Credit Union's". Mr. Cockburn
reviewed the following graphs and tables within this publication:
- Capital Ratio
- Delinquent Loans to Capital
- Loan Distribution
- Real Estate Loans
- Delinquency Distribution
- Investment Distribution
- NET Income to Average Assets
- Shares outstanding
- Share distribution
- Regional Comparisons
b. Member/Employee Surveys
Mr. Cockburn noted that two surveys have been distributed; one to
members and one to employees. The results of these surveys will
be compared against the benchmark surveys taken earlier this
year. The results will be announced at the Board's Planning
Conference in November, 1992.
c. Credit Cards
Mr. Cockburn reviewed overheads concerning DCU's VISA Credit
Cards. He noted that credit cards are our most profitable
product. To date, there are 9,242 Classic Cards and 6,772 Gold
cards issued to DCU members. The loss ratio on this product is less than 1%
Discussions took place regarding the pro's and con's of charging
an Annual Fee versus not charging an Annual Fee. This issue will
be discussed further at the Board's Planning Conference.
DCU members may waive their Annual DCU Credit Card fee is they
fall within one of the four groupings below:
1) They maintain $3,500. in saving at DCU.
2) They have $6,000. outstanding in DCU loans.
3) New card holders (for the first year).
4) Members that obtained a DCU mortgage loan that was sold.
Ms. Dawkins and Mr. McEachin suggested that this is an area that
DCU should promote. Mr. Gransewicz requested that a trend
analysis, including growth and decline, be generated and be
available for review at the Planning Conference.
Board of Directors' Meeting
October 27, 1992
Page - 4
d. Loan to Value Ratio on Real Estate Loans
Mr. Cockburn reviewed DCU's Loan to Value Ratio on Real Estate
Loans. It was noted that a random sampling of 100 first mortgage
portfolios were evaluated to determine the exposure if any, due
to current layoffs at DEC and decreased property values. This
sampling revealed that approximately 80% of DCU's first mortgages
have a Loan to Value of less than 65% and that these members had
35% or greater in equity at the time of closing. This presented
an excellent collateral position for DCU.
This will be discussed further at the Board's Planning Conference
in November.
Gail Mann left the meeting after the President's Report was given.
V. COMMITTEE REPORTS
a. Supervisory Committee
Ms. Ross introduced Robert Ketz, of DCU's Supervisory Committee
to the Board. Mr. Ketz updated the Board regarding the
committees last meeting.
The Supervisory Committee met with Jeffrey Bedigian, NCUA
Examiner, about this years NCUA Exam. NCUA examiners will be
looking at DCU policies, compliances and risk assessments. This
is an analytical review versus a confirmation/verifying process
and is considered to be an analysis rather than an audit. Mr.
Ketz also reviewed briefly the differences between the NCUA Exam
and our outside audit.
To date, Mr. Regan's Internal Audit Plan is going as planned and
is on schedule. This Audit Plan will be re-evaluated at year
end. Discussions took place regarding the quality of our Loan
Portfolio and our procedures for renegotiating terms for
delinquent borrowers. These topics will be discussed further at
the next Board Meeting.
b. Finance Committee
Ms. Dawkins updated the Board on the Finance Committee meeting.
The committee reviewed the following:
- Approved management's Investment Policy recommendation
with some minor amendments.
- Discussed DCU's Reverse Repo investments.
Board of Directors' Meeting
October 27, 1992
Page - 5
c. Human Resource Committee
Ms. Ross updated the Board concerning issues discussed at the
last Human Resource Committee meeting. She noted the following:
- The Wage & Compensation program is on schedule.
- Currently, there are three positions open; Real
Estate Servicing Manager, Director of Marketing, and
Consumer Loan Manager.
- The committee approved using a consultant to
implement Accountability Mapping for Senior Management.
- The Senior Operations Manager's position has been
eliminated due to reorganization.
- Frank Gooley, Senior Mortgage Officer, has resigned from
DCU to work for another financial institution.
VI. UPDATES AND DISCUSSIONS
a. Springfield/Westfield Branches
Mary Madden, Vice President of Operations, updated the Board on
DCU's Springfield Branch which is scheduled to close on November
24, 1992 and DCU's Westfield Branch which is scheduled to close
on November 25, 1992.
Mr. Cockburn informed the Board that he went to the Springfield
Branch for two one-hour meetings with DEC employees to answere
questions on why the two branches are closing. Both meetings
went very well.
b. Puerto Rico Branches
Ms. Madden updated the Board concerning DCU's two Puerto Rico
Branches; Aguadilla and San German. She noted branch closing
dates as follows:
Aguadilla - October 15, 1992
San German - December 15, 1992
She also noted that the Aguadilla Branch closing went as
scheduled and very smoothly.
c. Greenville Branch
Ms. Madden informed the Board that DCU's Greenville, South
Carolina, branch is schuduled to close on November 30, 1992.
Board of Directors' Meeting
October 27, 1992
Page - 6
d. Shrewsbury Branch
Ms. Madden updated the Board on the recent renovations at DCU's
Shrewsbury Branch location.
e. Human Resources
Karen Wall, Director of Human Resources, updated the Board
concerning two Trainer positions recently filled.
f. Mass CUNA Annual Meeting
Mr. Cockburn updated the Board on Mass CUNA's Annual Meeting
which he attended on Friday, October 9, 1992 in Boston. Next
years Mass CUNA Annual Meeting will be held in New York State.
g. Planning Conference Logistics
Ms. Kendall, Recording Secretary, provided the Board with the
logistics of the upcoming Planning Conference.
Ms. Ross distributed various articles and information she
obtained from the National Association of Credit Union Presidents
Conference she attended on October 21-24, 1992.
VIII. RECOMMENDATIONS
a. Policy on DEC Employees Time
The Board decided to table this recommendation until the November
or December Board meeting.
Board of Directors' Meeting
October 27, 1992
Page - 7
b. Charge Off Report
The Board reviewed the October 1992 Charge Off Report.
* It was moved by Ms. Mann and seconded by Mr. McEachin to
approve the October 1992 Charge Off Report as submitted. MOTION
CARRIED UNANIMOUSLY.
Ms. Dawkins posed a question concerning whether DCU's current
provision for loan losses is still adequate. Management will
review this closely and will report back to the Board at the
December Board meeting.
c. Loan Policy/Credit Cards
Mr. Cockburn reviewed Management's recommendation to amend DCU's
Loan Policy to 1) Provide a $500.00 credit card to college
students' who have a good credit history or no credit history
and 2) Provide a $1,000.00 credit card to four-year college
graduates who have a good credit history or no credit history.
Mr. Cockburn noted the following:
- 34% of people obtain their first credit card while they're a
freshman in college or senior in high school.
- The majority of credit cards are solicited through the mail.
- 75% of people still have their first credit card fifteen years later.
- There are approximately 9.1 million full time undergraduates in
the U.S. (Approximateley 5.6 million are enrolled in
four-year colleges).
* It was moved by Mr. McEachin and seconded by Ms. Dawkins to
approve Managements recommendation in amending DCU's Loan policy
as stated above. MOTION CARRIED UNANIMOUSLY.
d. Loan Policy/First Time Car Buyer
Mr. Cockburn reviewed Management's recommendation to amend DCU's
Current Loan Policy. Management recommended implementing a
"First Time Car Buyer" program that enables members with
insufficient credit history to qualify for a vehicle loan.
* It was moved by Ms. Mann and seconded by Mr. McEachin to
approve managements recommendation on Loan Policy/First Time Car
Buyer as stated above. MOTION CARRIED UNANIMOUSLY.
Board of Directors' Meeting
October 27, 1992
Page - 8
At 5:20 p.m., The Board took a fifteen-minute dinner break.
At 5:35 p.m., Ms. Ross called the meeting into Executive Session.
EXECUTIVE SESSION
IX. EXECUTIVE SESSION
a. Report
At 6:20 p.m., DCU's Senior Management left the meeting.
b. Evaluation
Board of Directors' Meeting
October 27, 1992
Page - 9
XII. ADJOURNMENT
* It was moved by Ms. Dawkins and seconded by Mr. Gransewicz to
adjourn this meeting at 6:40 p.m. MOTION CARRIED UNANIMOUSLY.
___________________________ ___________________________
Lisa DeMauro Ross Paul M. Kinzelman
Chairman Secretary
|
| 2.8 | BoD mtg Nov 19, 1992 Discuss -> 638.0 | PLOUGH::KINZELMAN | Paul dtn223-2605 | Tue Jan 19 1993 16:20 | 315 |
| DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Board of Directors' Meeting
November 19, 1992
At 1:20 p.m., Lisa DeMauro Ross, Chairman, called the meeting into General
Session.
GENERAL SESSION
Present: Tanya Dawkins, Treasurer
Philip Gransewicz
Paul Kinzelman, Secretary
Gail Mann
Thomas McEachin, Vice Chairman
Paul Milbury
Lisa DeMauro Ross, Chairman
Staff: Chuck Cockburn, President/CEO
Lisa Kendall, Recording Secretary
Mary Madden, Vice President of Operations
Betty Moran, Director of Finance
Allan Prindle, Vice President of Lending
Jim Regan, Internal Auditor
Karen Wall, Director of Human Resources
I. ROLL CALL AND DETERMINATION OF QUORUM
II. REVIEW OF MINUTES
The Board reviewed the October 27, 1992 Board Meeting Minutes. The Board
requested the following changes be made:
General Session: (Absent) Add that Paul Milbury was absent
during the October 27, 1992 Board Meeting.
IV. President's Report: (d) Add DCU's current Loan to Value Position.
IV. President's Report: Add that Gail Mann left the Board meeting
after the President's Report was given.
* It was moved by Ms. Mann and seconded by Mr. McEachin to approve the
October 27, 1992 Board of Directors' Minutes as amended. MOTION CARRIED
UNANIMOUSLY.
Board of Directors' Meeting
November 19, 1992
Page - 2
III. FINANCIAL REPORTS
Ms. Dawkins reviewed with the Board DCU's Financial Reports for the month
of October 1992. She noted the following:
- $72.000 negative variance and total operating expense.
- Loans decreased by 1.5% primarily due to Home Equity and Real Estate
Loans coming off the books.
- Loan income is below budget but is offset by dividend expense which
remains below budget.
- Salary Expense was over budget by $16,201 due to severance pay
packages for two former DCU employees.
- Savings decreased by 2.6%
- Assets decreased by 2.1%
- Negative cash balance due to outstanding treasurers checks. This is
misleading due to $28 million DCU has invested at EasCorp.
- Gross Spread dropped slightly from 3.91% to 3.90%
- Capital Ratio (excluding DCU's Reverse Repo's) increased from 4.42 to
4.60 in October 1992.
IV. PRESIDENT'S REPORT
Jim Regan, DCU's Internal Auditor, presented an overview of the
responsibilities and relationships for each of the following; Board of
Directors, Management, NCUA, Supervisory Committee, Independent Auditors,
Internal Auditor.
V. COMMITTEE REPORTS
a. Supervisory Committee
The Supervisory Committee will present their report at the December 1992
Board Meeting.
b. Finance Committee
A recommendation to update DCU's Investment Policy was reviewed by the
Finance Committee and will be presented to the Board for approval during
the Recommendation's Section of this meeting.
Board of Directors' Meeting
November 19, 1992
Page - 3
c. Human Resource Committee
The Human Resource Committee will review management's recommendation to
adjust the salary ranges based on the inflation rate. Every other year, an
entire review of the salary structure will be completed.
d. Nominating Committee
Ms. Ross updated the Board concerning her selection of three volunteers to
the Nominating Committee. All three people have agreed to serve on the
Committee for the 1992/1993 election process. The Nominating Committee
consists of the following individuals:
Karen Schlamp, Chairman
Business Planning and Analysis Manager for Corporate Marketing at Digital
Equipment Corporation
Harold Pike
Program Manager for Multi Vendor Storage Solutions for Digital Equipment
Corporation
Cindi Bloom
Mass Storage Organizational and Development Manager for Digital Equipment
Corporation
The Committee had their first meeting on Wednesday, November 18, 1992 at
DCU's Headquarters facility. Ms. Ross noted that the committee determines
the selection criteria, process for selecting the nominees and the Tellers
of Election.
After some discussion, the Board decided to hold DCU's Annual Meeting at
the Maynard Rod and Gun Club in Maynard, MA, beginning at 5:30 p.m. The
Board also agreed to suggest to the Nominating Committee that O'Rourke and
Clark Accountancy Corporation be selected as this years Tellers of
Election.
Mr. Cockburn noted that in past years, the Nominating Committee has chosen
a maximum of 150 words to be used in the candidate statements on the
Election Ballots. Mr. Kinzelman suggested that the maximum be increased to
300 words. After some discussion, the consensus was to recommend to the
Nominating Committee that the candidate statements be limited to 300 words.
Board of Directors' Meeting
November 19, 1992
Page - 4
VI. UPDATES AND DISCUSSIONS
a. Branch update
Springfield/Westfield Branches
Mary Madden, DCU's Vice President of Operations, informed the Board of
scheduled closing dates consisting of November 24, 1992 and November 25,
1992 for the Springfield and Westfield Branches respectively. An ATM is
being installed at the Westfield Branch and will be up and running by
November 20, 1992.
Greenville, South Carolina, Branch
Ms. Madden noted that all closing procedures are on schedule and that the
Greenville Branch will close on November 30, 1992.
San German, Puerto Rico, Branch
Ms. Madden noted that all closing procedures are on schedule and that the
San German Branch will close on December 15, 1992.
Burlington, Vermont, Branch
Ms. Madden noted that DEC has announced the closing of its Burlington,
Vermont, facility on April 1, 1993. Management is recommending that DCU's
Burlington Branch close on March 12, 1993. Discussions took place
concerning continued servicing to members once this branch is closed.
* It was moved by Ms. Mann and seconded by Ms. Dawkins to close DCU's
Burlington, Vermont branch on March 12, 1993. MOTION CARRIED UNANIMOUSLY.
b. Loan to Value Analysis
Mr. Prindle reviewed DCU's Loan to Value Analysis on Real Estate Loans and
answered questions from the Board.
c. Credit Appeals Committee
Mr. Cockburn informed the Board that the Credit Appeals Committee will be
meeting for the first time on Tuesday, November 24, 1992. The committee
will review DCU's process of approving and denying Real Estate and Consumer
Loans.
It was noted that a presentation will be made to the Board on DCU's Credit
Scoring System in the near future.
Board of Directors' Meeting
November 19, 1992
Page - 5
d. Meeting with John Sims
Mr. Cockburn informed the Board of a quarterly meeting he had with John
Sims, of Digital Equipment Corporation, on November 2, 1992. The meeting
agenda for this meeting was reviewed.
e. Participation Loan Update
Betty Moran, DCU's Director of Finance, distributed a status report on the
Participation Loan Properties. She updated the Board on the current status
of each property and answered various questions from the Board.
VIII. RECOMMENDATIONS
a. NCUA Examination/Record of Action Report
Mr. Cockburn reviewed NCUA's Record of Action Report. He recommended that
the Board agree to correct all exceptions and suggested that we not set a
Net Capital Ratio Goal until we complete the budget process in January,
1993.
* It was moved by Ms. Dawkins and seconded by Ms. Mann to approve and
accept NCUA's Examination and Record of Action Report as submitted with the
exception of the specific Net Capital Ratio Goal. MOTION CARRIED
UNANIMOUSLY.
b. Investment Policy
Ms. Moran reviewed with the Board, Managements recommendation to modify
DCU's Investment Policy. Ms. Moran reviewed each change and answered
questions.
* It was moved by Mr. McEachin and seconded by Mr. Milbury to approve all
changes as recommended within the Investment Policy. MOTION CARRIED
UNANIMOUSLY.
c. Telephone Remittance Agreement
Ms. Moran reviewed the Telephone Remittance Agreement update with the
Board.
* It was moved by Mr. McEachin and seconded by Mr. Milbury to approve the
update to DCU's Telephone Remittance Agreement with EasCorp as submitted.
MOTION CARRIED UNANIMOUSLY.
Board of Directors' Meeting
November 19, 1992
Page - 6
d. Policy on DEC Employees Time
Mr. Cockburn informed the Board of the next Liaison Meeting which he and
Ms. Ross will be attending on December 4, 1992. He noted that he would
like to present to the Liaisons a policy developed by the Board concerning
credit union volunteers receiving paid time-off for specific credit union
meetings and activities. The Board provided Mr. Cockburn with their input
and suggested that he draft a policy for their review prior to the December
4, 1993, meeting.
e. Charge Off Report
Mr. Prindle reviewed with the Board DCU's Charge Off Report for the month
of November 1992.
* It was moved by Mr. McEachin and seconded by Ms. Mann to approve the
November 1992 Charge Off Report as submitted. MOTION CARRIED
UNANIMOUSLY.
At 3:25 p.m., Ms. Ross called the meeting into Executive Session.
IX. EXECUTIVE SESSION
a. Sharing and Joint Privilege Agreement
b. Investigation
Board of Directors' Meeting
November 19, 1992
Page - 7
c. Ongoing Analysis
At 3:35 p.m., Ms. Ross called the meeting out of Executive Session and into
General Session.
GENERAL SESSION
X. OLD BUSINESS
a. Network highlights
The next issue of DCU's quarterly newsletter "Network" will highlight both
Mr. Kinzelman and Mr. McEachin.
XI. NEW BUSINESS
a. Board Memo
The Board reviewed a Board Memo which will be distributed to the membership
early in December 1992. The Board requested minor changes be made to this
memo.
b. Proposed 1993 Board Meeting Dates
The Board reviewed the proposed 1993 Board of Director Meeting dates. The
Board by consensus agreed upon the following:
- All monthly Board of Director meetings will begin at 2:30 p.m.
- Alternate monthly Board Meeting locations between DCU's headquarters
facility and DEC's Powdermill Road (MSO2) location, both of which are
located in Maynard, MA.
- Publish a Board Meeting listing including all Board Meeting dates,
times and locations at all branches.
c. Two Board Memos
In response to a members letter, Mr. Kinzelman requested that two Board
Memos be distributed to the membership primarily because they deal with
issues the entire membership may be interested in.
Board of Directors' Meeting
November 19, 1992
Page - 8
(Continued)
Board Memo One deals with DCU's prior practice of cashing Digital (DEC)
checks for non-DCU members. The Board by consensus approved Board Memo One
which will be re-worded with final approval by Ms. Ross, Mr. Melchione, Mr.
Kinzelman, and Mr. Cockburn, prior to publishing.
It was noted that Board Memo Two will be discussed further at next months
Board of Directors Meeting.
d. Proposed Bylaw Amendments
Mr. Kinzelman reviewed with the Board his proposed Bylaw Amendments on
several Bylaw sections. He is requesting from the Board, a consensus that
each of these sections be reviewed at the December Board Meeting.
The Board by consensus agreed that Mr. Kinzelman's proposed Bylaw
Amendments be further reviewed during the December Board Meeting.
Discussions also took place concerning publishing Proposed Bylaw Amendments
for the membership's review and input prior to the Board vote. The Board
approved that Proposed Bylaw Amendments, including the justification of why
the Bylaw Amendment is being recommended, would be made available for the
memberships review. The following four individuals would approve all
wording prior to publishing; Mr. Kinzelman, Mr. Melchione, Mr. Cockburn,
and Ms. Ross.
XII. ADJOURNMENT
* It was moved by Mr. McEachin and seconded by Mr. Gransewicz to adjourn
this meeting at 5:30 p.m. MOTION CARRIED UNANIMOUSLY.
_________________________ __________________________
Lisa DeMauro Ross Paul M. Kinzelman
Chairman Secretary
|
| 2.9 | BoD mtg Dec 22, 1992, Discuss->650. | PLOUGH::KINZELMAN | Paul dtn223-2605 | Wed Mar 10 1993 09:09 | 443 |
| DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Board of Directors' Meeting
December 22, 1993
At 2:40 p.m., Lisa DeMauro Ross, Chairman, called the meeting into
General Session.
GENERAL SESSION GENERAL SESSION
Present: Tanya Dawkins, Treasurer
Philip Gransewicz
Paul Kinzelman, Secretary
Gail Mann
Thomas McEachin, Vice Chairman
Paul Milbury
Lisa DeMauro Ross, Chairman
Staff: Chuck Cockburn, President/CEO
Lisa Kendall, Recording Secretary
Mary Madden, Vice President of Operations
Betty Moran, Director of Finance
Stephanie Pomfret, Administrative Secretary
Allan Prindle, Vice President of Lending
Jim Regan, Internal Auditor
Karen Wall, Director of Human Resources
Also Present: Rebecca Hawkins, Supervisory Committee Secretary
I. ROLL CALL AND DETERMINATION OF QUORUM
Chuck Cockburn, President/CEO, noted the following additions to this
month's agenda:
Committee Reports - e. Credit Appeals Committee
Recommendations - d. EasCorp Voting Authority
New Business - a. Board Memo
under Old Business
II. REVIEW OF MINUTES
The Board reviewed the November 19, 1992 Board meeting minutes and the
November 20 - 21, 1992 Board of Directors' Strategic Planning Conference
minutes. The Board requested the following changes be made:
November 19, 1992 Board Minutes
1. III. Financial Reports
- at the first hyphen, reword this sentence as:
"$72,000 negative variance and total operating
expense."
Board of Directors' Meeting
December 22, 1992
Page - 2
2. III. Financial Reports III. Financial Reports
- at the third to the last hyphen add: "The funds for
these treasurer's checks are held at EasCorp until
they are presented for payment - thus, the negative
cash is offset by some of the liquid assets in the
Corporate Credit Union."
3. III. Financial Reports III. Financial Reports
- at the last hyphen, change this sentence to read:
"Capital Ratio (excluding DCU's Reverse Repo's)
increased from 4.42 to 4.60 in October, 1992."
November 21 - 22, 1992 Board of Directors' Strategic Planning
Conference Minutes
* It was moved by Ms. Mann and seconded by Mr. Milbury to approve both the
November 19, 1992 Board of Directors' Meeting minutes and the Board of
Directors' Strategic Planning Conference minutes as amended. MOTION
CARRIED UNANIMOUSLY.
III. FINANCIALS
Tanya Dawkins, Treasurer, reviewed DCU's Financial Reports for the month of
November, 1992. She noted the following:
- An additional $240,000 was placed in the Provision for Loan
Losses. This increase was the result of management's analysis of
the growth in charge off loans during the past two years.
- Assets decreased by 3.6% from last month, which is primarily due
to reverse repo's maturing.
- Overall, loans held in our portfolio decreased. The best measure
of loan growth, however, is to compare the total of consumer
loans, portfolio real estate loans, and real estate loans sold to
the secondary market in 1991 with the total figure as of
November, 1992. This comparison shows a 15% overall year-to-date
growth.
- Savings decreased 1.1% from last month.
- DCU's Capital Ratio increased from 4.47% to 4.81%, due in part to
decreased assets caused by reverse repo's maturing.
- Slight increase in Delinquency Ratio resulting from a home equity
loan. DCU is in contact with this member.
- Other Income for the month of November was $508,000. Of this
income, $327,000 was a result of loans sold to the secondary
market.
Board of Directors' Meeting
December 22, 1992
Page - 3
IV. PRESIDENT'S REPORT
Mr. Cockburn, President/CEO, presented an overview of DCU's Credit Scoring
System that has been in effect since July, 1992.
A handout was distributed outlining the primary benefits of Credit Scoring
that include the following:
1. Efficient processing of applications
2. Consistent treatment of applicants
3. Improved management control
4. Reduced credit investigation costs
5. Increased profitability of loan portfolio
6. Information provided to management
Discussions took place and Mr. Cockburn answered various questions.
At a future Board meeting, a comparison of approval rates and charge offs
between this system and DCU's previous system will be presented.
At 3:05 p.m., Ms Ross called the meeting into Executive Session. Ms. Ross
requested that only the Board of Directors and the Recording Secretary
remain in the room.
EXECUTIVE SESSION
V. COMMITTEE REPORTS
a. Supervisory Committee
At 3:10 p.m., Ms. Ross reconvened the meeting into General Session.
Board of Directors' Meeting
December 22, 1992
Page - 4
GENERAL SESSION GENERAL SESSION
Ms. Hawkins, DCU's Supervisory Committee Secretary, informed the Board that
CUMIS has finished their exam of DCU and that the committee will report the
results to the Board at the next Board of Directors' meeting. She noted
that there are no significant issues that have not been resolved.
Ms. Hawkins, on behalf of all Supervisory Committee members, commended Jim
Regan, DCU's Internal Auditor, on his performance during the past year.
b. Finance Committee
Ms. Dawkins updated the Board concerning the following issues discussed at
the Finance Committee meeting that took place on Thursday, December 17,
1992.
- Recommendation for Investment Policy update
- Capital Expenditure update
- Recent FASB pronouncements
- November financial highlights
- Budget schedule
* It was noted that a recommendation to update DCU's Investment
Policy will be presented to the Board for approval during the
"Recommendations" section of the meeting.
It was also noted that two Finance Committee meetings have been scheduled
to review the 1993 budget schedule.
c. Human Resource Committee
Karen Wall, DCU's Director of Human Resources, informed the Board of three
positions management is in the process of filling. These positions are:
1. Real Estate Servicing Manager
2. Director of Marketing
3. Collections Manager
Board of Directors' Meeting
December 22, 1992
Page - 5
d. Nominating Committee
Ms. Ross updated the Board regarding the status of the 1993 election
process. The following five individuals have submitted applications and
have been selected by the nominating committee as candidates in the 1992 -
1993 Board of Directors' Annual Election:
1. Frank Branca - Vice President of Digital Services Eastern
States
2. Mark Chardone - Strategy Development Manager, Software
Engineering
3. Chris Fillmore Gillett - Principal Software Engineer, Unix
Engineering Languages Group
4. Paul Kinzelman - Consulting Engineer
5. Thomas McEachin - Corporate Internal Audit Manager
After some discussion, the Board requested that management look into
amending the applicant criteria for next year's election.
Ms. Ross also informed the Board that the petition process is scheduled to
begin January 8, 1993 and continue through February 8, 1993.
e. Credit Appeals Committee
Allan Prindle, DCU's Vice President of Lending, informed the Board of
issues discussed at two recent Credit Appeals Committee meetings.
Mr. Prindle noted that the committee reviewed and accepted the draft
statement concerning the roles and responsibilities of the committee.
The Credit Appeals Committee will submit a monthly meeting summary to the
Board which will be included within the monthly Board package. This
information will be discussed in Executive Session only. The summary will
not be made available for the membership's review.
VI. UPDATES AND DISCUSSIONS
a. CUMIS Risk Management Analysis
Mary Madden, DCU's Vice President of Operations, updated the Board
regarding the Credit Union Mutual Insurance Society (CUMIS) risk analysis
audit performed in November and December of 1992.
Ms. Madden noted that this audit primarily focused on security aspects of
DCU branches. CUMIS has presented their report to Patricia Cramm, DCU's
Administrative Services Manager/Security Officer, with recommendations to
DCU. Management will review these recommendations and develop action plans
for the Board's review by the January, 1993 Board meeting.
Discussions took place concerning branch security.
Board of Directors' Meeting
December 22, 1992
Page - 6
b. Branch Update
Ms. Madden noted that the San German, PR branch was closed on December 15,
1992, and the Aguadilla, PR branch was closed on October 15, 1992.
Ms. Madden also noted that management is "on schedule" in planning and
implementing the closedown of the Burlington, VT branch on March 12, 1992.
c. Member Complaint
Ms. Madden informed the Board of a complaint filed by a DCU member in
Puerto Rico. She noted that it has been passed on to Joe Melchione for
his review and recommendation.
d. Board Insurance Coverage
Betty Moran, DCU's Director of Finance, presented the Board with a handout
regarding DCU Board of Directors' insurance coverage.
Ms. Moran answered various questions regarding this handout.
e. Committee Member Memo
Ms. Ross informed the Board of a memo she received from Chris Gillett,
a Credit Appeals Committee Member, regarding signing both a DCU
indemnification agreement and a confidentiality of information and records
policy. After some discussion it was agreed that all Credit Appeals
Committee members should sign both of these documents.
f. Staff Survey Results
Mr. Cockburn reviewed with the Board results of a staff survey conducted in
November, 1992.
The staff survey results improved from a rating of 2.87 in February 1992 to
2.74 in October 1992. A summary of the major categories of evaluation were
presented as follows:
Board of Directors' Meeting
December 22, 1992
Page - 7
Staff Survey compared with past results:
Change
February 1992 October 1992 (x100)
Open to Communications 3.18 2.60 58
Committed to Quality 2.57 2.64 -7
Hire/Train/Empower 2.36 2.54 -18
Marketing Participative 3.40 3.19 21
Total Rating: 2.87 2.74 13
* On a scale of 1 to 5 with 1 being "perfection".
Discussions took place concerning these results.
g. Action Plan for NCUA Exam
Ms. Ross informed the Board of a letter mailed to Jeffrey Bedigian, of the
National Credit Union Association (NCUA), regarding management's action
plans to NCUA's recommendations made within the exam report
At 4:25 p.m., Ms. Ross called the meeting into Executive Session. Ms. Ross
requested that only Board of Directors remain in the room.
VIII. EXECUTIVE SESSION
At 5:10 p.m., Ms. Ross reconvened the meeting into General Session.
GENERAL SESSION
At 5:10 p.m., Paul Milbury left the meeting.
VII. RECOMMENDATIONS
a. Charge Off Report
Mr. Prindle reviewed with the Board DCU's Charge Off Report for the month
of December, 1992.
* It was moved by Mr. McEachin and seconded by Mr. Gransewicz to approve
the December, 1992 Charge Off Report as submitted. MOTION CARRIED
UNANIMOUSLY.
Board of Directors' Meeting
December 22, 1992
Page - 8
b. Business Loan Policy
Mr. Prindle reviewed with the Board management's recommendation to modify
DCU's Business Loan Policy.
The Record of Action for NCUA exam findings in DCU's lending areas called
for the following sections of DCU's Business Loan Policy to be amended:
- Regulatory Lending Limits - Income
- Interest Rates - Credit
- Collateral Requirements - Repayment Plans
- Approval Authority
* It was moved by Mr. McEachin and seconded by Ms. Dawkins to approve the
Business Loan Policy as amended. MOTION CARRIED UNANIMOUSLY.
c. Investment Policy
Ms. Moran reviewed with the Board management's recommendations to modify
DCU's Investment Policy. Ms. Moran reviewed the changes requested
in the Board package and provided a handout outlining a second requested
change.
The changes were included in the following sections of DCU's Investment
Policy:
- Authorized Individuals
- Portfolio Composition
* It was moved by Ms. Dawkins and seconded by Mr. McEachin to approve all
changes as recommended to DCU's Investment Policy. MOTION CARRIED
UNANIMOUSLY.
d. EasCorp Annual Meeting
Ms. Ross reviewed management's recommendation that the Board approve DCU's
President/CEO, Charles Cockburn, as DCU's representative to Eastern
Corporate Federal Credit Union (EasCorp).
This representative shall be empowered to vote at EasCorp's Annual meeting.
* It was moved by Ms. Mann and seconded by Mr. Gransewicz to approve
Charles Cockburn to be DCU's representative to EasCorp. MOTION CARRIED
UNANIMOUSLY
IX. OLD BUSINESS
a. DEC Employees Time Policy
Mr. Cockburn informed the Board that DCU's Liaisons (Ilene Jacobs, Thomas
Siekman, and Robert Ayres) have reviewed and recommended minor changes to
the DEC Employees Time While Serving as a DCU Volunteer Policy.
Mr. Cockburn reviewed these changes with the Board and noted that a revised
policy has been sent to the Liaisons for approval.
Board of Directors' Meeting
December 22, 1992
Page - 9
b. Proposed Bylaws Amendments
Mr. Kinzelman reviewed with the Board his proposed bylaw amendments on
several bylaw sections. A copy of these amendments were provided to each
Board member.
* It was moved by Mr. Kinzelman and seconded by Ms. Mann that the Board
waive the seven day notice as required in Article XXI, section 1 and
Article VIII, section 7 of DCU's bylaws. MOTION CARRIED UNANIMOUSLY.
* It was moved by Mr. Kinzelman and seconded by Mr. Gransewicz that
standard bylaw amendments regarding Article VI, Section 1 and Article VIII,
section 7 be approved. MOTION CARRIED UNANIMOUSLY.
The Board discussed and agreed to minor changes to the proposed bylaw
changes.
* It was moved by Mr. Kinzelman and seconded by Ms. Mann that the Board
approve bylaw amendments as amended within the following Articles listed
below, contingent upon NCUA's approval and DCU member feedback:
1. Article V, sections 6, 7 and 8
2. Article VI, sections 8(c)(1), 8(c)(6) and 9
3. Article VII, sections 1 and 9
4. Article VIII, sections 5(h) and 8
5. Article IX, section 5
6. Article X, section 1
7. Article XIX, sections 3 and 9
8. Article XXI, sections 1 and 2
MOTION CARRIED UNANIMOUSLY.
Board of Directors' Meeting
December 22, 1992
Page - 10
c. Board Memo
It was agreed that DCU's Board Memo discussions would be moved to the
January Board meeting.
X. NEW BUSINESS
none
XI. ADJOURNMENT
* It was moved by Mr. McEachin and seconded by Mr. Kinzelman to adjourn
the meeting at 6:00 p.m. MOTION CARRIED UNANIMOUSLY.
Lisa DeMauro Ross, Paul M. Kinzelman,
Chairman Secretary
|
| 2.10 | BoD meeting, Jan. 26, 1993, Discussion->674 | ASE003::GRANSEWICZ | | Tue Jul 20 1993 01:38 | 372 |
|
DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
BOARD OF DIRECTORS' MEETING
January 26, 1993
The meeting, held in the Massachusetts conference room of Digital Equipment
Corporation's Powdermill Road facility (MSO2), commenced at approximately
2:45 p.m.
GENERAL SESSION
Present:
Tanya Dawkins, Treasurer
Philip Gransewicz
Paul Kinzelman, Secretary
Gail Mann
Thomas McEachin, Vice Chairman
Paul Milbury
Lisa DeMauro Ross, Chairman
Also Present:
Steve Behrens, Supervisory Committee Chairman
Bob Cohen, Supervisory Committee member
Rebecca Hawkins, Supervisory Committee member
Bob Ketz, Supervisory Committee member (2:55 p.m.)
Karen Kupferberg, Supervisory Committee member
Joe Melchione, General Counsel (conference call)
Staff:
Chuck Cockburn, President/CEO
Lisa Kendall, Executive Secretary
Stephanie Pomfret, Recording Secretary
Jim Regan, Internal Auditor
I. ROLL CALL AND DETERMINATION OF QUORUM
At 2:47 p.m., Lisa DeMauro Ross, Chairman, called the meeting into
Executive Session and requested that only the Board of Directors and
Supervisory Committee members remain in the room.
II. EXECUTIVE SESSION
At 4:08 p.m., Steve Behrens, Supervisory Committee Chairman, left the
meeting.
At 4:27 p.m., Ms. Ross asked that Mr. Cockburn, Ms. Kendall, Ms. Pomfret
and Mr. Regan join the meeting.
Board of Directors' Meeting
January 26, 1993
Page - 2
a. Attorney Client Work Product
Board of Directors' Meeting
January 26, 1993
Page - 3
b. Recovery of Funds
c. Puerto Rico Resolution
d. Credit Appeals Committee
At 4:53 p.m., Ms. Ross thanked the Supervisory Committee for attending and
dismissed them from the meeting.
Board of Directors' Meeting
January 21, 1993
Page - 4
At 5:07 p.m., Mr. Melchione ended his conference call and the Board took a
short dinner break. Ms. Ross informed those present that the agenda will
be condensed to assure a reasonable adjournment hour.
At 5:20 p.m., Ms. Ross reconvened the meeting into General Session.
GENERAL SESSION
Present:
Tanya Dawkins, Treasurer
Philip Gransewicz
Paul Kinzelman, Secretary
Gail Mann
Thomas McEachin, Vice Chairman
Paul Milbury
Lisa DeMauro Ross, Chairman
Staff:
Chuck Cockburn, President/CEO
Lisa Kendall, Executive Secretary
Betty Moran, Director of Finance
Stephanie Pomfret, Recording Secretary
Allan Prindle, Vice President of Lending
Jim Regan, Internal Auditor
Tony Trzcinka, Financial Analyst
Karen Wall, Director of Human Resources
VIII. RECOMMENDATIONS
d. Budget
A handout was distributed which outlined the following 1993 DCU Goals:
1. Meet Profitability Goals
2. Quality Initiative
3. Meet Budget Loan Growth and Quality Goals
4. Improve Delivery Systems - Report on Action Plans Quarterly
5. Implement Savings Pricing Change
6. Implement Planned Training Plan
Mr. Cockburn introduced Betty Moran, DCU's Director of Finance, and Tony
Trzcinka, DCU's Financial Analyst, to the Board. He explained that Ms.
Moran and Mr. Trzcinka were responsible for gathering a large portion of
the information contained within this year's budget.
Board of Directors' Meeting
January 26, 1993
Page - 5
Mr. Cockburn proceeded to review with the Board several transparencies
outlining certain aspects of the proposed budget. These aspects were:
1. Savings Growth
2. Asset Growth
3. Loan Growth
4. 1993 Ratios
5. Capital Expenditures Budget
6. Analysis of Expenses
Another handout was provided outlining Consumer Loan Rate changes effective
January 27, 1993. DCU lowered the rates in each of the following areas
based on competitive analysis. The computer loan rate was lowered due to
the discontinuation of Digital Equipment Corporation's automatic payment of
loans through payroll deduction. This will create an incentive for DEC
employees to utilize DCU when purchasing and financing a DEC or Apple
computer. These rates included the following categories of loans:
- New Vehicles
- Used Vehicles
- New Motorcycles
- Used Motorcycles
- Digital Computers
Ms. Moran, Mr. Prindle and Mr. Cockburn answered various questions from the
Board concerning the information reviewed.
Mr. Kinzelman questioned the term length of Digital computer loans. Mr.
Prindle explained that Digital computer loans have a three year maximum
term and DCU will loan up to a maximum of $10,000 for qualifying members.
Ms. Dawkins noted that the Finance Committee held two meetings to review
and discuss the proposed budget and that the committee unanimously
recommends the Board's approval of it.
* It was moved by Mr. Milbury and seconded by Ms. Dawkins to accept the
proposed DCU 1993 Budget as submitted. MOTION CARRIED UNANIMOUSLY.
At 5:52 p.m., Gail Mann left the meeting.
IV. FINANCIAL REPORTS
Handouts were distributed containing updated information regarding the
Statement of Income and Expenses for DCU's Capewind Service Corp. and
Statement of Condition for DCU's Land Development Corp. These pages were
to replace those included in the Board package.
Ms. Dawkins reviewed with the Board DCU's financial reports for the month
of December, and full year, 1992, as well as the distributed handouts. She
noted the following:
- Asset growth is essentially flat for the year.
- Savings decreased slightly at negative 1.2%
- Ended year earnings was 4.9 million compared to 3.6 million bugeted.
- Gross Capital Ratio, ended year, was 4.82%
- Loan Growth, including loans sold, was 21% over last year.
Board of Directors' Meeting
January 26, 1993
Page - 6
VIII. RECOMMENDATIONS
e. Charge Offs
Mr. Prindle, Vice President of Lending, reviewed with the Board DCU's
Charge Off Report for the month of January, 1993.
* It was moved by Mr. McEachin and seconded by Mr. Milbury to approve
the January, 1993, Charge Off Report as submitted. MOTION CARRIED
UNANIMOUSLY.
III. REVIEW OF MINUTES
The Board reviewed the December 22, 1992, Board meeting minutes.
* It was moved by Mr. McEachin and seconded by Mr. Milbury to approve
the December 22, 1992, Board of Director's Meeting Minutes as submitted.
MOTION CARRIED UNANIMOUSLY
VIII. RECOMMENDATIONS (continued)
a. Mortgage Signature Authority
Mr. Prindle reviewed the updated version of the Mortgage Signature
Authority agreement. He noted that fifty copies must be signed by the
Secretary and Chairman of the Board and then forwarded to the Registry
of Deeds.
* It was moved by Mr. McEachin and seconded by Mr. Milbury to approve
the Mortgage Signature Authority agreement as submitted. MOTION CARRIED
UNANIMOUSLY.
b. Power of Attorney
* It was moved by Mr. Milbury and seconded by Mr. Kinzelman to approve a
resolution granting limited power of attorney to Mr. Santiago Mari Roca,
DCU's Puerto Rico attorney, so he may continue testifying in behalf of DCU
regarding loan default cases. MOTION CARRIED UNANIMOUSLY.
Board of Directors' Meeting
January 26, 1993
Page - 7
IX. OLD BUSINESS
a. Bylaws
Mr. Cockburn requested that the Board waive the seven day notice concerning
bylaw amendments in order to proceed with this topic.
* It was moved by Mr. McEachin and seconded by Mr. Kinzelman to waive the
seven day notice as required in Article XXI, section 1 of DCU's bylaws.
MOTION CARRIED UNANIMOUSLY.
* It was moved by Mr. Kinzelman and seconded by Mr. Milbury that the two
bylaw amendments, eliminating references to the Credit Committee contained
in Article VII, section 5(g) and Article VIII, section 7, be approved.
MOTION CARRIED UNANIMOUSLY.
Discussions took place regarding the Justifications for Proposed
Nonstandard Bylaw Amendments.
Mr. McEachin proposed the following deletions be made:
1. Overall Justification: eliminate "Remember that the credit union
belongs to the members, not the Board."
2. Article XIX, section 3: eliminate the second paragraph.
* It was moved by Ms. Dawkins and seconded by Mr. Kinzelman that the bylaw
changes be approved. It was also moved by Ms. Dawkins and seconded by Mr.
Kinzelman to approve the justifications to the bylaws approved last month
with minor changes listed above. MOTION CARRIED UNANIMOUSLY.
X. NEW BUSINESS
a. Credit Card Fees
Mr. Gransewicz informed the Board of a recent complaint he received from a
DCU member.
He noted that the member felt that he should not be charged a twenty-five
dollar annual fee for his DCU Gold VISA, due to the fact that he paid $400
in interest on loans held at DCU last year.
Mr. Gransewicz requested that DCU reconsider its policy concerning credit
card fees. He also noted that because the fees will be charged in
February, it is crucial that the reconsideration be performed promptly.
Mr. Cockburn suggested that DCU investigate this situation and immediately
report any findings to the Board. The Board agreed.
Board of Directors' Meeting
January 26, 1993
Page - 8
b. Minutes Complaints
Mr. Kinzelman informed the Board of complaints sent to him via the DEC
Notesfile system concerning the substance of Board minutes.
He suggested audio taping the meetings for better clarity and substance in
the monthly Board minutes publications.
Ms. Ross proposed that the Board include this as an agenda item for next
month's meeting. The Board agreed.
c. Employee Survey Comments Request
Ms. Dawkins requested that the Board receive copies of employee comments
given to Mr. Cockburn in the 1992 Employee Survey performed by John
Chidester of Member Trends.
Mr. Cockburn noted that he would look into providing the Board with copies
of these comments.
d. Future Board Memos
Mr. Kinzelman informed the Board of the following possibilities for future
Board Memo topics:
1. Service - ATM vs. Tellers vs. Phone
2. Credit Scoring
Mr. McEachin and Ms. Ross suggested that these topics be considered for
future DCU Network publications.
e. DEC Policy Status
Mr. Gransewicz requested the current status of the DEC Employee's Time
Policy.
Mr. Cockburn informed the Board that DCU's Liaisons have approved the
policy and it should have been implemented.
XI. ADJOURNMENT
* It was moved by Mr. Milbury and seconded by Mr. McEachin to adjourn the
meeting at 6:30 p.m. MOTION CARRIED UNANIMOUSLY.
__________________________ _________________________
Lisa DeMaruo Ross Paul M. Kinzelman
Chairman Secretary
|
| 2.11 | BoD meeting, Feb. 23, 1993, Discussion->675 | ASE003::GRANSEWICZ | | Tue Jul 20 1993 01:40 | 427 |
|
DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
BOARD OF DIRECTORS' MEETING
February 23, 1993
The meeting, held in the second floor training room of Digital Credit
Union's headquarters facility, PKO5 (Parker Street, Maynard, MA), commenced
at approximately 2:30 p.m.
GENERAL SESSION
Present:
Tanya Dawkins, Treasurer
Lisa DeMauro Ross, Chairman (3:30 p.m.)
Phil Gransewicz
Paul Kinzelman, Secretary
Gail Mann (2:37 p.m.)
Tom McEachin, Vice Chairman
Paul Milbury (3:26 p.m.)
Also Present:
Chuck Cockburn, President/CEO
Karen Etsell, Vice President of Marketing
Mary Madden, Vice President of Operations
Betty Moran, Director of Finance
Stephanie Pomfret, Recording Secretary
Jim Regan, Internal Auditor
Karen Wall, Director of Human Resources
I.ROLL CALL AND DETERMINATION OF QUORUM
Mr. McEachin noted that the Board will convene into Executive Session at
the end of the meeting.
II.REVIEW OF MINUTES
Revised copies of the January 26, 1993, and February 5, 1993, Board meeting
minutes were distributed. The Board reviewed the January 26, 1993, Board
meeting minutes. Ms. Dawkins requested several amendments be made to the
Financials section of the January 26, 1993, minutes.
At 2:37 p.m., Gail Mann joined the meeting.
The Board reviewed the February 5, 1993, Board meeting minutes concerning
credit card pricing. Ms. Dawkins requested an amendment made to the first
page of the February 5, 1993, minutes.
* It was moved by Ms. Mann and seconded by Ms. Dawkins to approve the
January 26, 1993, Board meeting minutes and the February 5, 1993, Board
meeting minutes concerning credit card pricing, as submitted. MOTION
CARRIED UNANIMOUSLY.
Board of Directors' Meeting
February 23, 1993
III.FINANCIALS
Tanya Dawkins, Treasurer, reviewed with the Board DCU's financial reports
for the month of January, 1993. She noted the following:
- Substantial bottom-line net income for the month which was due partly
to $221,000 in other income from the sale of loans to the secondary
market. This figure exceeded the budgeted amount of $92,300.
- Real estate loans sold totaled $18,175,000 for the month compared to
the $9,230,000 budgeted.
- Assets decreased by 2.7%.
- Savings decreased by 3.3% due partly to the day of the week on which
the month ended.
- $13 million in other receivables was due mainly to the settling of
loans sold to the secondary market.
IV.PRESIDENT'S REPORT
Chuck Cockburn, President/CEO, reviewed the following overhead graphs with
the Board:
1. Consumer Loans Outstanding (Percentage Growth 1988-1992)
2. Total Real Estate Loans Sold and Held (Percentage Growth
1988 - 1992)
3. Total Loans Sold and Held
He noted the following:
- DCU had two consecutive years of negative consumer loan growth in 1990
and 1991 compared to a positive growth of over 15% in 1992.
- In 1991, real estate loans sold and held grew less than 5% compared to
the growth of over 20% in 1992.
- Total loans sold and held grew from less than 5% in 1991 to over 20% in
1992.
Mr. Cockburn reviewed two overheads outlining DCU's Priority Goals for
1993. These goals are:
1. Improve Capital Ratio
2. Implement Quality Initiative
3. Increase Lending and Ensure the Quality of Loan Portfolio
4. Improve Delivery Systems
5. Implement Savings Price Changes
6. Implement Training Plan
Mr. McEachin noted that he feels it is important to include a goal
regarding the member/staff surveys.
Mr. Kinzelman inquired as to steps that are being taken to move routine
member transactions from the branches to the ATMs. Mr. Cockburn noted the
following steps that are planned at one DCU branch:
1. Educate staff concerning ATM advantages
2. Inform members of ATM advantages
3. Eliminate bugs from the system
Ms. Mann questioned whether or not there were surveys taken to determine
why members choose not to use ATMs. Mr. Cockburn explained that there have
been no surveys of this nature performed.
Mr. Gransewicz inquired as to what percentage of the members have DCU ATM
cards. Mr. Cockburn stated that this information would be provided at the
next meeting.
Mr. Kinzelman inquired about the cost of member transactions performed in a
branch versus those performed at a DCU ATM. Mary Madden, Vice President of
Operations, replied that research showed transactions performed in a branch
would cost DCU $1.25 each while ATM transactions cost approximately 1/3
less than branch transaction costs.
Mr. Cockburn noted that more detailed descriptions of plans to improve
delivery systems will be given on a quarterly basis. He also noted that
Karen Etsell, Vice President of Marketing, is gathering information
concerning savings price changes.
Ms. Mann inquired as to whether or not Ms. Etsell was acquiring information
regarding all aspects of pricing. Ms. Etsell explained that she is
collecting pricing information on all aspects, excluding loan pricing.
V. COMMITTEE REPORTS
a. Supervisory Committee
Mr. Regan, DCU's Internal Auditor, noted that the Supervisory Committee is
scheduled to meet on March 11, 1993, and will continue to meet every other
month. The committee did not meet in February, therefore, had no formal
report for the Board.
c. Credit Appeals Committee
It was noted that the February Credit Appeals Committee meeting had been
canceled. Mr. Kinzelman requested that the committee submit a report, at a
future Board meeting, outlining all appeals reviewed since the committee
was formed. The Board agreed.
b. Finance Committee
Ms. Dawkins notified the Board that due to the two budget meeting held in
January the Finance Committee did not meet in February, therefore, had no
formal report for the Board.
d. Human Resource Committee
Mr. McEachin noted that the Human Resource Committee Report would be tabled
until the arrival of Ms. Ross and Mr. Milbury.
VI. UPDATES AND DISCUSSIONS
a. Branch Update
Ms. Madden informed the Board that the Burlington, VT, branch closing,
planned for March 12, 1993, is on schedule. Ms. Madden reviewed with the
Board DCU's current plan to improve its remaining branches. She noted that
all branch managers will take part in comprehensive training sessions and
will then be responsible for educating the staff.
Mr. Gransewicz questioned whether or not the branch staff could take part
in training sessions at headquarters instead of depending on the branch
managers for training purposes. Mr. Cockburn explained that the staff
members who are within driving distance of DCU headquarters will attend
training sessions there. Those who are not within driving distance will
receive video tapes of the headquarters training sessions to assure
consistency in training throughout the branch network.
b. ATM Update
Ms. Madden updated the Board concerning the removal of ATM machines at DCU
branches in Nashua, NH, Franklin, MA, and Colorado Springs, CO. She also
noted that Wells Fargo, DCU's newly contracted ATM servicing company, is
running smoothly at all locations, with the exception of the Colorado
facility.
Ms. Mann questioned whether or not DCU had changed its Master Agreement
with Digital. Ms. Madden noted that it is being updated and Thomas
Siekman, DCU's Liaison, will be assisting DCU in the negotiating process.
c. Vendor Update
Ms. Madden reviewed three overheads with the Board outlining the following:
1. Model of Continuous Improvement
2. Steps Taken to Ensure Appropriate Contracts
3. Contract Changes
Mr. McEachin questioned whether or not DCU has considered devising
contracts with Digital for any of the above mentioned services. Ms. Madden
explained that DCU may be looking to Digital for a solution to continual
problems with CODEX regarding equipment.
d. Trust Loans
Ms. Madden reviewed the recently performed analysis of loans originated in
the form of a trust, as previously requested by Mr. Kinzelman. She noted
that the analysis showed trust accounts were not opened properly and files
were not being properly maintained. These problems will be corrected.
e. Annual Report
Karen Etsell, Vice President of Marketing, updated the Board concerning the
current status of DCU's Annual Report. She noted that all reports are on
schedule and the Board of Directors' photo has been chosen. The entire
Annual Report will be printed and delivered to headquarters on April 15,
1993. There will be a special mailing of the report to large depositors
and it will be available to the entire membership at any branch location.
Mr. Gransewicz questioned if there would be an explanation to the
membership as to why certain members receive a copy of the report by mail.
Mr. Cockburn noted that an explanation would be given to the membership.
Mr. Kinzelman requested that management look into making the Annual Report
available on the Digital VTX system. The Board and Management agreed.
f. Marketing Update
Ms. Etsell informed the Board that DCU's private auto sale is on schedule
and will take place March 15 - 20, 1993, in Massachusetts and New
Hampshire. Forty-six dealers have agreed to take part in the sale. She
also noted that DCU's auto loan rates will be reduced during the sale and,
as a result, DCU is expected to bring in $1.6 million in loan sales.
Ms. Dawkins questioned whether or not DCU was the only institution
participating in this program. Mr. Cockburn noted that in Massachusetts,
DCU is the only participant. In other states, there are others
participating with DCU.
Ms. Mann asked if this type of sale has been utilized by other credit
unions. Ms. Etsell replied that many credit unions have taken part in this
type of sale successfully in the past. Ms. Etsell also noted that Jennifer
Peterson has been hired as the new Advertising/Promotion Manager.
h. Update
At 3:26 p.m., Paul Milbury joined the meeting.
VI. RECOMMENDATIONS
a. Lending Policy
The Board requested the following changes to DCU's proposed loan policy:
- under I. GENERAL LOAN POLICY Credit Appeals Committee - first paragraph,
second sentence: before the word "member" add "non-DCU employee".
- under I. GENERAL LOAN POLICY Loan Concentrations a) Individual
Borrowers: have Allan Prindle, Vice President of Lending, investigate
the "10% of assets" stipulation.
- (same section) under b) Types of Loans - Real Estate Loans: define
"core assets".
- under Consumer Loan Policy - Employee/Volunteer Loans: add "e) Loans to
Vice President of Lending will be reviewed and approved by President/CEO
and Board of Directors".
- (same section) last paragraph: after the word "audited" add "at least
quarterly".
- under GENERAL REQUIREMENTS #8, letter C): after the word "appraisers"
add ", other than the original appraiser,"
At 3:30 p.m., Lisa DeMauro Ross, Chairman, joined the meeting.
* It was moved by Ms. Mann and seconded by Mr. Kinzelman to approve DCU's
proposed Lending Policy as amended. Six in favor; Ms. Dawkins, Mr.
Gransewicz, Mr. Kinzelman, Ms. Mann, Mr. McEachin and Mr. Milbury. One
abstention; Ms. Ross. MOTION CARRIED. At 3:48 p.m., Mr McEachin left the
meeting.
b. Process for Board Memos
Mr. Cockburn reviewed the proposed Process for Board Memos with the Board.
The Board requested the following changes be made:
- under #1: delete the second sentence
- under #2: delete the second sentence and add "The Board Memo will be
circulated to all Board members for review and feedback."
* It was moved by Ms. Mann and seconded by Mr. Milbury to accept the
proposed Process for Board Memos as amended. MOTION CARRIED UNANIMOUSLY.
Ms. Dawkins requested that the Treasurer's Annual Report be published as a
Board Memo before the April 15, 1993, release of the DCU Annual Report.
She also noted that a by-line be placed at the bottom of the memo stating
that "a full audited report will be available in mid-April". Mr. Cockburn
provided a copy of the Treasurer's Report for those Board members who had
not yet reviewed it. The Board agreed to publish the Treasurer's Annual
Report as a Board Memo, before April 15, 1993.
c. Charge Offs
Ms. Moran reviewed with the Board DCU's Charge Off Report for the month of
February, 1993.
* It was moved by Ms. Mann and seconded by Ms. Dawkins to approve the
February, 1993, Charge Off Report as submitted. MOTION CARRIED
UNANIMOUSLY.
d. Policy of Board Handling of Employee Issues
Ms. Ross suggested this topic be moved to Executive Session. The Board
Agreed.
e. EasCorp Voting Policy
Mr. Cockburn, as a member of EasCorp's Board of Directors, requested that
the Board approve an agreement to grant him voting rights at EasCorp's
Annual Meeting.
* It was moved by Ms. Mann and seconded by Paul Milbury to approve an
agreement to grant Mr. Cockburn, as a member of EasCorp's Board of
Directors, voting rights at EasCorp's Annual Meeting. MOTION CARRIED
UNANIMOUSLY.
Mr. Cockburn informed the Board of a leather portfolio he received from
EasCorp. These portfolios were given to each of EasCorp's Board members as
a gift. He noted that its estimated value was approximately $100.
VIII. OLD BUSINESS
a. Agreement with NCUA
Mr. Cockburn noted that a copy of the Sharing Agreement between the
National Credit Union Association (NCUA) and DCU had been included in this
month's Board package as reference material.
b. Credit Union Times Article
Mr. Cockburn informed the Board of a recent article, regarding DCU, in the
Credit Union Times Magazine (volume 4, #6, page 6). Ms. Madden informed
the Board that she attempted to contact the author of the article in an
effort to reveal the author's source. The senior editor informed her that
the author was unavailable and stated that any person familiar with this
information could be a source for the author.
Mr. Cockburn stated that the information was included in a Board Memo which
was distributed to approximately 60,000 members. He noted that any one of
those members could have contacted the magazine.
Mr. Gransewicz informed the Board that he intends to write a formal reply
to the magazine in his name. The Board strongly opposed his decision,
since Mr. Gransewicz's response may be considered as representing the
entire Board.
IX. NEW BUSINESS
a. Upcoming Conferences
Ms. Ross reviewed with the Board two upcoming conferences offered by the
National Association of Federal Credit Unions (NAFCU). She noted that both
were included in this month's Board package as reference material.
b. Policy on Board Attendance
Ms. Ross informed the Board of its option to create a policy which would
require the Board and Supervisory Committee to attend at least one
conference each year. Mr. Cockburn recommended not making conferences
mandatory for Board and Supervisory Committee members.
Ms. Dawkins inquired as to credit union rules regarding the attendance of
spouses at Board conferences. The Board agreed to table this discussion
until the next Board meeting.
At 4:20 p.m., the Board took a short dinner break.
At 4:30 p.m., Ms. Ross convened the meeting into Executive Session. It was
noted that only the Board of Directors remain in the room. Joe Melchione,
DCU's General Counsel, joined the meeting via conference call.
X. EXECUTIVE SESSION
XI. ADJOURNMENT
It was moved by Ms. Mann and seconded by Mr. McEachin to adjourn the
meeting at 5:50 p.m. MOTION CARRIED UNANIMOUSLY.
_____________________________ _____________________________
Lisa DeMauro Ross, Paul M. Kinzelman,
Chairman Secretary
|
| 2.12 | BoD meeting, March 23, 1993, Discussion->676 | ASE003::GRANSEWICZ | | Tue Jul 20 1993 01:42 | 410 |
|
DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Board of Directors' Meeting
March 23, 1993
The meeting, held in the Massachusetts conference room of Digital Equipment
Corporation's Powdermill Road facility (MSO2), commenced at approximately
2:30 p.m.
I. EXECUTIVE SESSION
a. Board Member Loan
b. Board Member Loan
Board of Directors' Meeting
March 23, 1993
c. President/CEO Memo
d. 1993 Goals Update
Mr. Cockburn distributed a handout regarding the status of DCU's goals for
1993. He noted the following:
- Net Income for the year slightly surpassed the expected $3.5 million.
- Both delinquency and charge off rates are slightly below budget.
- Capital Ratio is 5.9 compared to 5.12 at year-end 1992.
- A detailed plan to improve delivery systems will be available in April.
- Upon completion of the six current Quality Initiative projects, twelve
new projects will be assigned.
- The finalization date for recommendations on Savings Pricing has been
changed from March to April 27, 1993.
- The Human Resource Committee will meet every two months to monitor the
status of the implemented Training Plan.
II. REVIEW OF MINUTES
The Board reviewed the February 23, 1993 Board meeting minutes. Ms. Ross
noted that, due to extenuating circumstances, the minutes were not made
available for review prior to Board package distribution.
The Board requested the following changes be made to the February 23, 1993,
minutes:
- Under VI. UPDATES AND DISCUSSIONS, d. Trust Loans: rewrite the second
sentence to read: "She noted that the analysis showed certain accounts
were not opened properly and their files were not properly maintained."
- Update specific arrival and departure times of Ms. Ross, Mr. McEachin,
and Mr. Milbury.
- Under VII. OLD BUSINESS, b. Credit Union Times Article: Ms. Ross
agreed to reword the last paragraph.
* It was moved by Mr. Milbury and seconded by Ms. Dawkins to approve the
February 23, 1993 Board meeting minutes as amended. MOTION CARRIED
UNANIMOUSLY.
At 2:46 p.m., Ms. Ross convened the meeting into General Session.
GENERAL SESSION
Present:
Tanya Dawkins, Treasurer
Phil Gransewicz
Gail Mann
Tom McEachin, Vice Chairman
Paul Milbury
Lisa DeMauro Ross
Also Present:
Steve Behrens, Supervisory Committee Chairman
Bob Ketz, Supervisory Committee member
Karen Kupferberg, Supervisory Committee member
Mike Sacher, O'Rourke and Clark Accountancy Corp.
Staff:
Chuck Cockburn, President/CEO
Karen Etsell, Vice President of Marketing
Mary Madden, Vice President of Operations
Betty Moran, Director of Finance
Stephanie Pomfret, Recording Secretary
Allan Prindle, Vice President of Lending
Jim Regan, Internal Auditor
Karen Wall, Director of Human Resources
Absent:
Paul Kinzelman, Secretary
III. FINANCIALS
Tanya Dawkins, Treasurer, reviewed with the Board, DCU's financial reports
for the month of February, 1993. She noted the following:
- Net Income for the month of February was almost $200,000 above budget.
- The amount of loans held in portfolio continued to decline - down .6%
from the previous month.
- Loans sold to the secondary market continue to be higher than budgeted.
- The increase in the other income to assets ratio was due partly to the
large amount of refinancing that is currently taking place.
- Real estate loans sold and held are growing at an annual rate of 1%.
Mr. McEachin inquired as to what was included in the interest on borrowed
funds figure. Ms. Dawkins explained that interest on borrowed funds is
completely attributed to reverse repos.
IV. PRESIDENT'S REPORT
a. VISA Update
Mr. Cockburn presented the following information to the Board:
- During a normal month, DCU experiences approximately 70 - 80 new VISA
account openings and 40 - 50 VISA account closings.
- During the month following the charging of Annual VISA fees, DCU
experienced 112 new VISA accounts opened and 224 VISA accounts closed.
The closed account figure is an increase of approximately 150 closings
compared to regular months. However, this figure is equal to the number
of closings during the same time frame in 1992.
Out of the 224 VISA accounts closed in 1993, 30 were randomly chosen and
analyzed. The following information was noted:
- 3 of the 30 were relationship accounts
- 14 of the 30 had paid no interest during the year
- 9 of the 30 had paid less than $100 in interest annually
- 8 of the 30 had paid more than $100 in interest annually and only 1 of
the 8 paid over $400 in annual interest
Ms. Dawkins noted that non-relationship members with high interchange
income are very profitable to DCU. She requested that the 30 accounts
should be analyzed further to look at their interchange income totals. Mr.
Cockburn agreed to provide this information at a future Board meeting.
b. Non-Sufficient Funds Update
At 2:56 p.m., Ms. Mann and Mr. Milbury left the meeting.
V. COMMITTEE REPORTS
a. Supervisory Committee
O'Rourke and Clark Audit
Steve Behrens, Supervisory Committee Chairman, introduced Mike Sacher, of
O'Rourke and Clark Accountancy Corporation, to the Board. Mr. Behrens
explained that every year the Supervisory Committee hires an outside
auditing firm to perform an audit of DCU. He noted that Mr. Sacher joined
the meeting to discuss the audit results and answer any questions that may
arise.
Mr. Sacher provided and reviewed with the Board a handout outlining the
following four exhibits:
I. Financial Structure Analysis
II. Key Ratios
III. Delinquent Loan Trends
IV. Retained Earnings Analysis
Mr. Sacher explained that he met with the Supervisory Committee on March
11, 1993 and the minor wording changes noted at that meeting had been
incorporated in this report. He noted that this version of the audit
results would be included in the Annual Report.
He went on to explain that no significant findings were evident and that
1992 was an outstanding year for DCU. He noted that the assumptions made
by his firm for 1992 were very close to the actual results. He attributed
DCU's success to the improvement actions taken by management, thorough
underwriting of mortgages and outstanding efforts in the lending,
operations and accounting areas. He also noted that DCU's accounting
department rivals those of his greatest clients. He reviewed his firm's
assumptions for 1993 and thanked the Board for inviting him to the meeting.
Mr. Behrens expressed his appreciation to Mr. Sacher for taking the time to
attend, and Mr. Sacher left the meeting.
Member Complaint Update
Member Complaint Update
b. Finance Committee
Ms. Dawkins informed the Board of the Finance Committee meeting that was
held on March 18, 1993. She noted that Betty Moran, DCU's Director of
Finance, reviewed the quarterly GAP analysis that compares DCU to its peer
groups. The peer data presented was based on the month of June due to
year-end information being unavailable as yet. DCU's results were
positive, as stated by Mr. Sacher earlier in the meeting.
She went on to explain that Ms. Moran reviewed DCU's Investment Strategy,
particularly focusing on an article, printed in Credit Union Management
Magazine, regarding the Investment Strategies for larger credit unions.
DCU compared well to the given data. She then noted that Ms. Moran
provided updates on both the O'Rourke and Clark audit and the monthly
financial statements.
c. Human Resource Committee
Ms. Ross informed the Board that the Human Resource Committee would be
meeting on Friday, March 26, 1993, and therefore, no formal report was
submitted.
d. Credit Appeals Committee
Mr. Prindle noted that the Credit Appeals Committee did not meet during the
month of March and therefore, no formal report was submitted.
VI. UPDATES AND DISCUSSIONS
a. Branch Update
Mary Madden, DCU's Vice President of Operations, noted that DCU's
Burlington, VT, branch was successfully closed on March 12, 1993.
Mr. Gransewicz inquired as to whether or not the Shrewsbury branch will be
opening during lunchtime. Ms. Madden noted that a staffing adjustment
would be implemented to allow the branch to remain open all day, beginning
March 29, 1993.
b. Disaster Recovery
Ms. Madden noted that all Disaster Recovery booklets have been completed
and all departments are in the process of storing inventory boxes offsite.
She also noted that Electronic Data Systems (EDS) has informed DCU that
ATMs should be on-line by Wednesday or Thursday and EDS has agreed to cover
any losses resulting from the storm related disaster of March 13, 1993.
Mr. Gransewicz inquired as to the extent of damage at the EDS site. Ms.
Madden explained that the EDS building was damaged, but data files were
protected. EDS attempted to move to two of their hotsites, but the first
was occupied by World Trade Center personnel and the second contained
inadequate phone lines. Until EDS is back on-line, there is a $100 daily
ATM withdrawal limit for all members.
Mr. McEachin questioned whether or not the membership had been notified of
the EDS Disaster. Ms. Madden noted that no formal letter had been sent as
DCU ATMs were not on-line and there was no way of determining accurate fund
availability.
c. ATM Card Update
As requested by Mr. Gransewicz at the last Board meeting, Ms. Madden
presented an overhead outlining DCU ATM Card Penetration. Mr. Gransewicz
requested that copies of the overhead be distributed to the Board. The
following information was noted:
- 1,045 ATM cardholders (3.7%) hold savings accounts with DCU
- 29,188 ATM cardholders (62.4%) hold checking accounts with DCU
- DCU has issued 30,593 ATM cards to its membership
- There are currently 46,453 savings accounts open at DCU
- There are currently 46,789 checking accounts open at DCU
Ms. Madden reviewed the following steps being taken to improve security at
the Shrewsbury, Marlboro and Westminster ATM locations:
1. Educate staff in safety procedures
2. Install proper lighting, if needed
3. Review liability insurance guidelines
4. Install cameras, if needed
5. Possible increases to security coverage
Ms. Ross informed the Board of a letter she received from a member
regarding the Shrewsbury ATM. Mr. Cockburn noted that management would
look into this matter and report back to the Board at the June Board
meeting.
d. Marketing Update
Karen Etsell, DCU's Vice President of Marketing, updated the Board
regarding DCU's Auto Sale. She noted that the sale took place in
Massachusetts from March 15-20, 1993. As a result of this promotion, DCU
acquired $1,033,000 and closed a total of 82 loans. She also noted that
357 applications were approved and others continue to be processed. The
sale will take place in Georgia from April 22-24, 1993, and in Washington
DC for four days in May.
Ms. Etsell noted that the Annual Report is on schedule. It will be
delivered from the printer on April 15, 1993, and will be mailed out only
to large depositors. She also noted that the next issue of Network, DCU's
newsletter, will be included in the April statement mailing.
Ms. Ross inquired if a Board Memo would be included in the mailing. Ms.
Dawkins noted that the Treasurer's Report from the 1993 Annual Report would
be included in the mailing as a Board Memo.
e. Automatic Payment of Loans
Allan Prindle, DCU's Vice President of Lending, updated the Board
concerning the automatic payment of loans. He noted that Bob Ketz, a
Supervisory Committee member, had originally requested this information.
He explained that, in the past, members taking advantage of the automatic
payment option would receive a bill each month stating the payment due on
their loan balance. Currently, this transaction is listed on their regular
monthly statements, and bills are no longer sent to these members.
Mr. Gransewicz questioned which share account is used to automatically
withdraw loan payments. Mr. Prindle explained that each member has the
option of specifying the share account from which loan payments will be
automatically withdrawn. At 4:17 p.m., Ms. Mann and Mr. Milbury returned
to the meeting.
VII. RECOMMENDATIONS
a. Loan Policy
Mr. Prindle reviewed the wording changes made to DCU's loan policy as
requested by the Board at their last meeting. He also reviewed several
changes made to the loan authority limits portion of the policy.
Mr. Gransewicz requested that, under ATTACHMENT I LOAN AUTHORITY LIMITS
Member Loans - Consumer Loans: The word "and" should be added after the
word "Model" in the second sentence. Mr. Gransewicz noted that there
should also be a stipulation included in this section regarding the
accumulation of loans under the $1,000,000 limit. Mr. McEachin noted that
this point was addressed under the Business Loan Policy section. Mr.
Gransewicz requested that copies of the entire policy be made available to
the Board at the next meeting.
* It was moved by Mr. McEachin and seconded by Ms. Mann to approve DCU's
Loan policy as amended. Four in favor; Mr. McEachin, Mr. Milbury, Ms.
Mann and Ms. Dawkins; and one opposed; Mr. Gransewicz. MOTION CARRIED.
b. Deed of Trust
c. Charge Offs
Mr. Prindle reviewed with the Board, DCU's Charge Off report for the month
of March, 1993.
* It was moved by Ms. Mann and seconded by Mr. McEachin to approve the
March, 1993, Charge Off report as submitted. MOTION CARRIED UNANIMOUSLY.
d. EasCorp Funds Transfer Authorizations
Ms. Moran reviewed with the Board a recommendation concerning the
authorization of key staff members to effect wire transfer withdrawals from
DCU's daily account at Eastern Corporate Federal Credit Union (EasCorp).
She noted that this action will delete Michele L'Abbe and add Anthony
Trzcinka, Michelle Caissey and Carrie Reed as authorized individuals.
Mr. McEachin questioned if it was necessary to add so many people to the
list. Ms. Moran noted that some are on the list because of investing and
others with a lower authority limit are authorized to perform member wires.
Ms. Ross inquired whether proper controls were in place to monitor these
transactions. Mr. Regan explained that the individuals with a high
authority limit would only be authorized to transfer funds from this DCU
account to another DCU account.
* It was moved by Ms. Mann and seconded by Mr. McEachin to approve the
recommended changes to the EasCorp Funds Transfer Authorized Individuals
list. MOTION CARRIED UNANIMOUSLY.
At 4:30 p.m., the Board took a short dinner break. At 4:45 p.m.,Ms. Ross
convened the meeting into Executive Session. Joe Melchione, DCU's General
Counsel, joined the meeting via conference call and all DCU staff members
left the meeting.
(Executive Session minutes and Adjournment from Lisa Ross)
__________________________________
Lisa DeMauro Ross, Chairman
|
| 2.13 | BoD meeting, April 27, 1993, Discussion->677 | ASE003::GRANSEWICZ | | Tue Jul 20 1993 01:43 | 329 |
|
DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Board of Directors' Meeting
April 27, 1993
The meeting, held in the second floor training room of DCU's headquarters
facility, PKO5 (141 Parker Street, Maynard, MA), commenced at approximately
2:39 p.m.
GENERAL SESSION
Present:
Tanya Dawkins, Treasurer (2:49 p.m.)
Lisa DeMauro Ross, Chairman
Phil Gransewicz
Paul Kinzelman, Secretary
Gail Mann
Tom McEachin, Vice Chairman
Paul Milbury
Also Present:
Karen Kupferberg, Supervisory Committee Member
Staff:
Chuck Cockburn, President/CEO
Karen Etsell, Vice President of Marketing
Mary Madden, Vice President of Operations
Betty Moran, Director of Finance (2:49 p.m.)
Allan Prindle, Vice President of Lending
Stephanie Pomfret, Recording Secretary
Jim Regan, Internal Auditor
Karen Wall, Director of Human Resources
I. REVIEW OF MINUTES
The Board reviewed the March 23, 1993, Board meeting minutes. The
following amendments were made:
- page 2, letter c: reword the second sentence
- page 2, letter d, first hyphen: change the word "February" to "the
year".
* It was moved by Mr. McEachin and seconded by Mr. Milbury to accept the
March 23, 1993, Board meeting minutes as amended. MOTION CARRIED
UNANIMOUSLY.
II. FINANCIALS
Lisa DeMauro Ross, chairman, noted that this topic would be tabled until
the arrival of Tanya Dawkins, Treasurer, and Betty Moran, Director of
Finance.
Board of Directors' Meeting
April 27, 1993
III. PRESIDENT'S REPORT
Ms. Ross noted that this topic would be tabled until after the Committee
Reports section of the meeting.
IV. COMMITTEE REPORTS
a. Supervisory Committee
Ms. Ross introduced Karen Kupferberg, Supervisory Committee member, to the
Board. Ms Kupferberg noted that the Supervisory Committee did not hold a
meeting in April and, therefore, had no formal report for the Board. She
also noted that the next Supervisory Committee meeting is scheduled for May
25, 1993.
b. Finance Committee
It was noted that the Finance Committee held no meeting in April and,
therefore, had no formal report for the Board.
c. Human Resource Committee
Ms. Ross informed the Board that the Human Resource Committee held no
meeting in April and, therefore, had no formal report for the Board.
d. Credit Appeals Committee
Allan Prindle, Vice President of Lending, noted that a meeting of the
Credit Appeals Committee was held on April 12, 1993. Of the five loans
that were submitted for review, three were denied, one was approved with a
cosigner, and one was counter-offered. He also noted that, year-to-date,
the committee has held three meetings and reviewed a total of eight loans.
Of the eight reviewed, five have been denied, one has been approved with a
cosigner, two have been counter-offered and one is pending further
information.
Mr. Milbury questioned what would be considered a counter-offer in these
cases. Mr. Prindle explained that, as an example, if a member is denied a
large, unsecured line of credit, DCU would suggest a home equity line of
credit as an alternative. Mr. Milbury then questioned whether or not there
was a way to suggest a counter-offer to these members before the appeals
process. Mr. Prindle went on to explain that the Credit Appeals Committee
will assess these situations in an attempt to improve original offers to
the membership rather than having to wait for the appeals process.
III. PRESIDENT'S REPORT
Delivery Systems
Ms. Dawkins and Ms. Moran joined the meeting at 2:49 p.m. Chuck Cockburn,
President/CEO, provided a handout outlining DCU's Delivery System
objectives for 1993. He reviewed the following four strategies and their
objectives:
1. Increase member reliance on electronic delivery systems, mail and the
Infrmation Center by:
a. improving their effectiveness
b. educating staff and members on their advantages
c. considering pricing and/or policies as an incentive or
disincentive
2. Modify and adjust delivery systems to provide cost-effective service:
a. consider off-site branches
b. shared branches (research)
3. Analysis of peak time staffing
4. Move branches from transactions-oriented to sales culture:
a. train and educate staff
b. implement branch merchandising and marketing
c. change branch layout
Mr. Kinzelman inquired whether a financial incentive to move routine
transactions from branches to ATMs could be implemented. Mr. Cockburn
noted that a Quality Team Project is currently underway in Merrimack to
improve ATM usage. The team consists of branch personnel and a member of
the ATM department. Ms. Madden, Vice President of Operations, noted that
during the effort, 96 ATM card applications were handed out at the branch,
and a total of 70 were returned.
Mr. Kinzelman requested that DCU look into the difference in cost between
network ATM machine transactions and DCU drive-up window transactions. Mr.
Gransewicz noted that DCU needs to stress how easy it is to use DCU ATM
cards virtually anywhere. Ms. Ross also noted that an incentive to move
transactions from branches to ATMs did not necessarily need to be financial
to be effective.
III. FINANCIALS
Ms. Dawkins reviewed with the Board, DCU's financial reports for the month
of March, 1993. She noted the following:
- Quarterly reports are included in this month's Board package.
- The bottom line for the first quarter of 1993 is favorable.
- Net Income for the month exceeded the budget by $90,000 due partly to the
refinancing trend and lower operating expenses.
- Total operating expenses should be favorable. (noted as unfavorable on
statement of income and expense report in Board package)
- Capital Ratio was 5.28% at the end of the month.
- Delinquency was better than budget for the month.
- Savings increased by 1.4%.
- Loan growth was slightly negative due partly to the participation loans
reclassification.
Mr. Kinzelman questioned why the Annual Meeting cost totaled $24,000. Ms.
Moran explained that the cost of the election was included in this figure.
Mr. Cockburn made note of the new charts being used for delinquency and
charge offs. Mr. Kinzelman noted that he agreed with using zero as an axis
for these charts. Mr. McEachin questioned whether or not DCU investment
figures should be compared with a rate other than that of Fed funds. Mr.
Cockburn agreed that another benchmark should be found now that DCU is no
longer dealing with Fed funds.
V. UPDATES AND DISCUSSIONS
a. Branch Update
Ms. Madden noted that Carol Raposa has been hired as DCU's new Branch
Network Manager. Ms. Raposa spent 22 years in branch administration for
Boston Federal Savings and Loan before joining DCU and she is currently in
training and visiting branches.
She also noted that Digital Equipment Corporation (DEC) is downsizing its
Northboro facility to approximately 50 employees, therefore, DCU will be
closing its branch there. The branch is scheduled to close on Friday,
April 30, 1993. Branch staff have been notified and closedown procedures
are underway.
b. Annual Report
Ms. Etsell distributed to the Board copies of the April 29, 1993, Annual
Meeting agenda. She noted that the meeting is scheduled to begin at 5:30
p.m., at the Maynard Rod and Gun Club and that copies of the annual report
and the agenda would be available at the door. Ms. Pomfret will be taking
minutes at the meeting and Pat Cramm, DCU's Security Officer, has been
chosen to serve as the meeting's parliamentarian. Ms Etsell also noted
that the election results will be announced at the meeting and an
Organizational Meeting of the Board to elect its officers is scheduled for
the following Tuesday.
c. Marketing Plan
Ms. Etsell reviewed with the Board the following overheads regarding DCU's
1993 Marketing Plan:
1. 1993 Marketing Objectives
2. Priority Products and Services
3. Vehicles to Achieve Goals
4. Ongoing Promotions
5. Public Relations
6. Direct Mail
7. Marketing Profiles, Inc.
8. Sales and Service Culture
9. Marketing Plan Summary
10. Direct Mail Promotions
She noted the following:
- Jennifer Peterson, DCU's Advertising/Promotion Manager will aid DCU's
efforts to bring production in-house.
- Marketing Profiles, Inc. (MPI) of Florida provides DCU with a Marketing
Customer Information File (MCIF), a computer based information system,
which will allow DCU to target-mail its promotions rather than the
current mass-mailing technique.
Mr. Kinzelman questioned how MPI acquires its information. Ms. Etsell
explained that MPI purchases databases from smaller companies. Mr.
Gransewicz questioned whether the information from MPI would be
DCU-specific. Ms. Etsell explained that MPI only gives DCU information
that targets DCU membership.
Mr. Gransewicz noted that DCU needs to schedule a membership drive. Ms.
Etsell noted that the marketing department would also like to complete its
New Member Package before a membership drive takes place.
d. Real Estate Loan to Value
Mr. Prindle reviewed the quarterly Real Estate Loan to Value Analysis with
the Board. The analysis looked at first mortgages and home equity lines of
credit separately to show that the credit union has an excellent real
estate loan portfolio.
VI. RECOMMENDATIONS
b. Charge Offs
Mr. Prindle reviewed with the Board, the Charge Off Report for the month of
April, 1993.
* It was moved by Mr. McEachin and seconded by Mr. Milbury to approve the
April, 1993, Charge Off Report as submitted. MOTION CARRIED UNANIMOUSLY.
c. Field of Membership
Mr. Cockburn provided a handout stating DCU's current Field of Membership
Policy. He reviewed a recommendation to expand DCU's Field of Membership
to include Digital-related parties such as subsidiaries and contract
workers. He noted that, if approved, management will work with General
Counsel on the exact wording before requesting NCUA approval.
During discussion, Mr. McEachin noted that the Board needs to agree whether
or not subsidiaries and contract workers should be considered eligible for
DCU membership. Ms. Mann noted that adding subsidiaries' employees would
only be a technical change to the original guidelines. Mr. Gransewicz
noted that he felt the recommendation to add contract workers is too far
outside DCU's current Field of Membership.
Discussion continued. Ms. Ross noted that due to employee downsizing and
the ways United States corporations are currently constructing their
workforces with subsidiaries and contract workers, it is necessary to
consider this addition. Mr. Gransewicz noted that contract workers are not
really DEC employees. Ms. Ross noted that DCU needs to change with the
country's current workforce situation. Mr. Kinzelman noted that it would
be very cost-effective to DCU to expand its membership in this manner.
Ms. Dawkins requested that subsidiaries and contract workers be considered
separately in this recommendation. Ms. Ross noted that a decision
regarding contract workers will be tabled until further information can be
obtained.
* It was moved by Mr. Gransewicz and seconded by Ms. Mann to approve the
recommendation to include Digital subsidiaries in DCU's Field of Membership
Policy. MOTION CARRIED UNANIMOUSLY.
Ms. Mann requested that Mr. Cockburn discuss the contract workers issue
with the liaisons. Mr. Cockburn noted that a Board decision must be made
before he could speak with the liaisons. At 4:17 p.m., the Board took a
short break. At 4:30 p.m., Ms. Ross reconvened the meeting into General
Session.
VI. RECOMMENDATIONS
VII. ADJOURNMENT
* It was moved by Mr. McEachin and seconded by Ms. Mann to adjourn the
meeting at 6:22 p.m. MOTION CARRIED UNANIMOUSLY.
_______________________________ _______________________________
Lisa DeMauro Ross, Paul M. Kinzelman,
Chairman Secretary
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DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
BOARD OF DIRECTORS MEETING
May 4, 1993
The meeting held in the Digital Employees' Federal Credit Union (DCU)
Headquarters (141 Parker Street, Maynard, MA) Training Room was called to
order at 3:10 p.m.
GENERAL SESSION
Present:
Tanya Dawkins (via conference call)
Philip Gransewicz
Paul Kinzelman (via conference call)
Gail Mann (via conference call)
Lisa DeMauro Ross (via conference call)
Staff:
Chuck Cockburn, President/CEO
Lisa Kendall, Recording Secretary
Absent:
Thomas McEachin
Paul Milbury
I.ROLL CALL AND DETERMINATION OF QUORUM
At 3:10 p.m. Lisa DeMauro Ross noted that the purpose of this meeting is to
re-elect officials to the following positions; Chairman, Vice Chairman,
Secretary and Treasurer.
II.NOMINATIONS
Ms. Ross asked the Board for a nomination to the office of Chairman.
* It was moved by Ms. Dawkins and seconded by Ms. Mann to appoint Lisa
DeMauro Ross to the office of Chairman. Ms. Ross accepted this appointment
and abstained from voting. (Four in favor; Tanya Dawkins, Philip
Gransewicz, Paul Kinzelman, Gail Mann, One abstention; Lisa DeMauro Ross.)
MOTION CARRIED.
Board of Directors Meeting
May 4, 1993
Page - 2
Ms. Ross asked the Board for a nomination to the office of Vice Chairman.
* It was moved by Ms. Dawkins and seconded by Mr. Gransewicz to appoint Tom
McEachin to the office of Vice Chairman. Mr. McEachin previously expressed
that he would accept, if re-elected to serve as Vice Chairman. (Five in
favor; Tanya Dawkins, Philip Gransewicz, Paul Kinzelman, Gail Mann, and
Lisa DeMauro Ross.) MOTION CARRIED.
Ms. Ross asked the Board for a nomination to the office of Treasurer.
* It was moved by Ms. Mann and seconded by Mr. Kinzelman to appoint Tanya
Dawkins to the office of Treasurer. Ms. Dawkins accepted this appointment
and abstained from voting. (Four in favor; Philip Gransewicz, Paul
Kinzelman, Gail Mann, Lisa DeMauro Ross, One abstention; Tanya Dawkins.)
MOTION CARRIED.
Ms. Ross asked the Board for a nomination to the office of Secretary.
* It was moved by Mr. Kinzelman and seconded by Ms. Dawkins to appoint
Philip Gransewicz to the office of Secretary. Mr. Gransewicz accepted this
appointment and abstained from voting. (Four in favor; Tanya Dawkins, Paul
Kinzelman, Gail Mann, Lisa DeMauro Ross, One abstention; Philip
Gransewicz.) MOTION CARRIED.
III.MARCH MINUTES
Ms. Ross requested that all Board members review the March 23, 1993,
Executive Session minutes and forward any changes to her by Monday, May 10,
1993.
Ms. Ross also requested that the Board send to her, by next week, any
topics they would like to discuss at future Board Meetings.
IV.ADJOURNMENT
* It was moved by Ms. Mann and seconded by Mr. Kinzelman to adjourn this
meeting at 3:15 p.m. (Five in favor; Tanya Dawkins, Philip Gransewicz,
Paul Kinzelman, Gail Mann and Lisa DeMauro Ross.) MOTION CARRIED.
__________________________ ___________________________
Lisa DeMauro Ross Philip J. Gransewicz
Chairman Secretary
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| 2.15 | BoD meeting, May 25, 1993, Discussion->679 | ASE003::GRANSEWICZ | | Tue Jul 20 1993 01:45 | 432 |
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DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Board of Directors' Meeting
May 25, 1993
The meeting, held in the Massachusetts conference room of Digital Equipment
Corporation's Powdermill Road facility (MSO2), commenced at approximately
2:45 p.m.
GENERAL SESSION
Present:
Tanya Dawkins, Treasurer
Lisa DeMauro Ross, Chairman
Philip Gransewicz, Secretary
Paul Kinzelman (conference call)
Gail Mann (3:41 p.m.)
Thomas McEachin, Vice Chairman
Paul Milbury (3:41 p.m.)
Staff:
Chuck Cockburn, President/CEO
Betty Moran, Director of Finance
Allan Prindle, Vice President of Lending
Stephanie Pomfret, Recording Secretary
Jim Regan, Internal Auditor
I. REVIEW OF MINUTES
a. April 27, 1993 Board Meeting Minutes
The Board reviewed the April 27, 1993 Board meeting minutes. The following
amendments were made:
- page 4, III. FINANCIALS, 3rd bullet: after the word "budgeted" add
"amount by"
- same section: after the word "trend" add "and lower operating expenses"
- page 5, letter d: add a second sentence to read "The analysis looked at
first mortgages and home equity lines of credit separately to show that the
credit union has an excellent real estate loan portfolio."
- page 7, #8: change the word "argued" to "noted" and change the word
"indecisive" to "arbitrary"
- page 9, second full paragraph: change the first sentence to read "Ms. Ross
asked that a motion be made at this time, but discussion continued."
- page 10, second paragraph: after the first sentence add "This section of
the minutes will be available, unredacted, after the announcement."
- same paragraph: before the last sentence add "The Board indicated that
management needs to communicate to the members the credit union's Capital
Ratio goal."
* It was moved by Mr. McEachin and seconded by Mr. Gransewicz to accept the
April 27, 1993, Board Meeting minutes as amended. MOTION CARRIED
UNANIMOUSLY.
b. Additional March 23, 1993, Board Minutes
The Board reviewed additional minutes of the March 23, 1993 Board Meeting,
written by Ms. Ross. Ms. Ross noted that, for the Policy vote portion of
these minutes, Mr. McEachin was responsible for making the motion and Mr.
Gransewicz was responsible for seconding the motion. Ms. Ross noted that a
copy of these additional minutes would be sent to Joseph Melchione, DCU's
General Counsel, for his review.
* It was moved by Ms. Dawkins and seconded by Mr. Gransewicz to approve the
additional March 23, 1993 Board minutes as amended. MOTION CARRIED
UNANIMOUSLY.
c. Organizational Meeting Minutes
The Board reviewed the May 4, 1993 Board Meeting minutes. The following
amendment was made:
- page 2, III. MARCH MINUTES, second paragraph: after the word "discuss"
reword the sentence to read "at future Board meetings.
* It was moved by Ms. Dawkins and seconded by Mr. Gransewicz to approve the
May 4, 1993 Board Meeting minutes as amended. (Six in favor; Ms. Dawkins,
Ms. Ross, Mr. Gransewicz, Mr. Kinzelman, Ms. Mann and Mr. Milbury; One
abstention; Mr. McEachin.) MOTION CARRIED.
III. COMMITTEE REPORTS
a. Supervisory Committee
Mr. Regan, DCU's Internal Auditor, informed the Board that the Supervisory
Committee held no meeting in May and had no formal report for the Board.
b. Finance Committee
Ms. Dawkins informed the Board that the Finance Committee held no meeting in
May and had no formal report for the Board.
c. Human Resource Committee
Ms. Ross informed the Board that the Human Resource Committee met on May 4,
1993, to review the following topics:
1. Quality Initiative Program: a second meeting will be scheduled to
complete his review
2. Benefit Survey: the survey was mailed out on May 21, 1993 and results
will be available in June.
3. Roles and Responsibilities of Human Resource Committee and President/CEO
4. Reduction in Workforce Policy
Ms. Ross requested that the Roles and Responsibilities of the Human Resource
Committee and President/CEO be included in next month's Board package.
d. Credit Appeals Committee
Allan Prindle, Vice President of Lending, informed the Board that the Credit
Appeals Committee did not hold a meeting in May and, therefore, had no formal
report for the Board.
At 3:06 p.m., Ms. Ross left the meeting. It was noted that Mr. McEachin
would preside over the meeting in her absence.
III. FINANCIALS
Ms. Dawkins reviewed with the Board the Financial Reports for the month of
April, 1993. She noted the following:
- Bottom line income for the month was favorable to budget.
- Other income was $61,713 above budget for the month. This was due partly
to the high number of real estate loans sold to the secondary market.
- Savings declined by 3.6% for the month, however, figures for March were
high due partly to payroll deposits and quarterly dividends.
- Both the Delinquency Ratio and Charge Offs as of May, 1993, are below the
budgeted amount for year-end 1993 and the actual total from year-end 1992.
- Net Income to average assets is 1.56% annualized compared to the .96%
budgeted.
- DCU's Capital Ratio is at its highest in history, at 5.56%.
- The Investment Portfolio Performance benchmark has been changed from the
Fed Fund rate to the one-year Treasury Rate.
IV. UPDATES AND DISCUSSIONS
a. Participation Loan Update
Betty Moran, Director of Finance, updated the Board regarding the status of
DCU's Participation Loans. She review two overheads.
Name Type
Interstate RealtyTrust land
Plainfield Realty Trust land
Santuit Woods land/lots
Signal Hill land
Walcott Realty Trust land
Yankee Village building
b. CUSO Update
Ms. Moran provided and reviewed a handout outlining statements of condition
for both Capewind Service Corporation and DCU Land Development Corporation.
She additionally noted that the Board must appoint directors for each of
these corporations. She noted the current directors as: Lisa DeMauro Ross,
Paul Kinzelman and Thomas McEachin. Both Mr. McEachin and Ms. Ross agreed to
continue as directors and Mr. Kinzelman suggested that, due to his California
residence, he defer his directorship to Mr. Gransewicz.
* It was moved by Ms. Mann and seconded by Mr. Milbury to appoint Lisa
DeMauro Ross, Thomas McEachin and Philip Gransewicz as directors for DCU Land
Development Corporation and Capewind Service Corporation. MOTION CARRIED
UNANIMOUSLY.
c. Insurance Coverage
Ms. Moran reviewed with the Board an overhead outlining DCU insurance
coverage for 1993. She explained that coverage has not changed from the
previous year. Mr. Milbury questioned the method of payment for this type of
insurance. Ms. Moran explained that this insurance is paid through package
premiums and all policies are acquired through CUMIS (CUNA affiliate). Mr.
Milbury requested that Ms. Moran list the premium cost along with the
coverage for the next Board meeting. Mr. Gransewicz requested an addition to
the report stating the carriers for workers compensation in Massachusetts,
New Hampshire, Maine and Colorado.
d. Litigation Update
Mr. Cockburn updated the Board regarding the ongoing Mangone criminal trial.
He noted that Ms. Claire Beaudoin, DCU's former Vice President of Lending,
testified for two days concerning her former roles and responsibilities at
DCU. The previous owner of the Capewind Motel was called to testify as well
as Lisa Kendall, Mr. Mangone's former secretary. The trial has been
estimated to last approximately five weeks. It was noted that Mr. Gransewicz
would write a message for the DEC Notesfile indicating court hours and
directions for any members who wish to attend.
V. PRESIDENT'S REPORT
Quality Initiative
Mr. Cockburn provided and reviewed a handout regarding Total Quality
Management at DCU. The following outlines were attached:
1. Quality Model
2. Continuous Improvement Team Definition
3. Team Roles and Responsibilities
4. Team Sponsor Roles and Responsibilities
5. Facilitator Roles and Responsibilities
6. Team Leader Roles and Responsibilities
7. Team Member Roles and Responsibilities
8. Quarterly Report on Quality Initiative
Mr. Gransewicz questioned whether all members of a team are from the area of
DCU in which their subject is being targeted. Mr. Cockburn explained that
there is a conscious effort to compile teams from different areas of the
credit union to provide diverse opinions on the subject being targeted.
Out-of-State branch personnel are also included in the formation of the
teams.
Mr. Cockburn noted that Work Process is an important aspect of Quality. To
show this, he then reviewed several overheads outlining two of the five
completed quality projects. The first team assessed the average on-hold time
for the Phone Center and found it to be an average of nine seconds with much
variation. The team studied the current process to determine why it was out
of control. As a result of this team's efforts, the average on-hold time is
currently under three seconds with little variation. This team will
re-evaluate this process after a period of time to determine whether or not
the new process continues to be successful.
The second team focused on subscriptions at DCU. This team, using
statistical tools, substantially reduced the cost of subscriptions by
pinpointing and cancelling duplicate or unnecessary subscriptions from the
different departments. It was noted that Ms. Moran was the sponsor for this
Quality team.
Mr. Cockburn noted that Human Relations is also an important backbone of
Quality. Balancing job requirements and home life is a large portion of
Human Relations. He explained two instances in which DCU accommodated the
needs of its employees in this manner.
Mr. Cockburn explained that the External Customer is a third aspect of
Quality. He mentioned that the gathering of information analyzing the
customer must be constant to achieve quality. DCU researches its members by
utilizing John Chidester, of Member Trends, to perform DCU's annual member
survey. Another member information tool is the newly acquired Marketing
Customer Information File System (MCIF). Mr. Cockburn reviewed the following
overheads containing information gathered by this system:
1. Households by State
2. Distribution of DEC Incomes - Top 10 States
Conference Update
Mr. McEachin noted that he recently attended a Volunteer Development
Institute in Ogunquit, Maine. The conference was offered by Mass CUNA and
was held on the weekend of May 14 - 15, 1993. He noted that in each of the
major areas discussed at the conference, DCU was right on target in their
changes and made note of the following points:
- DCU is properly utilizing the Quality Initiative.
- MCIF is a positive step for DCU, although approximately only seven credit
unions are currently using the system.
- Truth-in-Savings regulations were reviewed.
- Credit unions' expense to asset ratios are high compared to that of Savings
and Loan institutions.
- Pricing discussions revolved around the decision that credit unions must
have choices for their members, offering incentives versus negatives.
Mr. Cockburn noted that credit unions' expense to asset ratios are high due
primarily to their low average savings balances.
Mr. Cockburn noted that he recently gave a presentation at a Volunteers'
Conference, given by the National Association of Federal Credit Unions
(NAFCU), in Phoenix, Arizona. The presentation focused on how credit union's
an avoid fraud at their institutions. He included 15 lessons to be learned
and answered various questions from the floor. He noted that DCU's
turnaround message is spreading rapidly. At 5:20 p.m., the Board took a
short dinner break. At 5:27 p.m., Ms. Ross reconvened the meeting into
General Session.
VI. RECOMMENDATIONS
a. Supervisory Committee Vacancy
Ms. Ross noted that the backgrounds of the three Supervisory Committee
applicants were included in the Board package along with the existing roles
of the current members. The Board must appoint a volunteer to fill the
vacant seat on the committee. After short discussion, Ms. Ross suggested
that the Board be allowed to interview each of the applicants before making a
decision. It was noted that the date of the June Board of Directors' meeting
will be changed to allow the entire Board an opportunity to interview the
applicants before a decision is made. The applicants would be asked to
appear at the June Board meeting to answer any questions posed by the Board.
The Board agreed to table this decision until the next Board meeting. At
5:35 p.m., Ms. Mann and Mr. Milbury left the meeting.
b. NAFCU Election
Mr. Cockburn noted that the Board has been asked to vote in NAFCU's election
for Director-at-Large. This director will serve a three year term to
commence in July, 1993. The Board must choose two of the three candidates
and the ballot must be signed by the Chairman and Secretary of the Board.
The Board decided to vote for Mr. Michael Maslak and Mr. Marcus Schaeffer in
NAFCU's election for Director-at-Large.
c. Loss Policy
Mr. Prindle review with the Board a recommendation to approve a policy
regarding Eligibility for Member Products and/or Services related to members
who cause a loss to DCU. He noted that this would act as a consistent policy
limiting members who cause a loss to the credit union to primary share
account use only.
* It was moved by Mr. McEachin and seconded by Ms. Dawkins to approve the
Eligibility for Member Products and/or Services Policy related to members who
cause a loss to DCU. MOTION CARRIED UNANIMOUSLY.
d. Loan Policy
Mr. Prindle reviewed with the Board a recommendation to update DCU's Loan
Policy to include Recreational Vehicle/Boat Loans within the Secured Vehicle
Loans section of the policy. Mr. Kinzelman questioned whether this policy
could include the purchase of aircraft. Mr. Prindle inquired if books are
available to determine the market value of a specific aircraft. Mr.
Kinzelman noted that aircraft values are variable and appraisals are needed.
Mr. Prindle noted that repossession, paperwork aspects and loan demand were
unknown to him at this point in time. Mr. Kinzelman suggested that Mr.
Gransewicz write a message in the Flying Notesfile at DEC to determine the
demand for aircraft loans. Ms. Ross asked that a motion be made for the
recommendation as written.
* It was moved by Mr. Kinzelman and seconded by Mr. Gransewicz to approve
the addition of Recreational Vehicle/Boat Loans within the Secured Vehicle
Loan portion of DCU's Loan Policy. MOTION CARRIED UNANIMOUSLY.
e. Charge Offs
Mr. Prindle reviewed with the Board the Charge Off report for the month of
May, 1993. He noted that two accounts should no longer be on the report.
* It was moved by Mr. McEachin and seconded by Ms. Dawkins to approve the
May, 1993 Charge Off Report as amended. MOTION CARRIED UNANIMOUSLY.
VII. OLD BUSINESS
a. Letter from Attorney General
Mr. Prindle noted that DCU had received a letter from the Massachusetts
Attorney General's office in appreciation to DCU for taking prompt action in
forwarding documentation for the Federal Reserve Bank of Boston's study of
lending practices in the banking industry. The study was conducted at many
institutions to determine if minority applicants were more likely to be
denied a home mortgage loan than were equally qualified white applicants. It
was noted that, according to the documentation sent, DCU followed no such
practice.
b. Policy on Officials Attending Conferences
Mr. Cockburn reviewed with the Board the revised policy on Officials
Attending Conferences. Mr. Kinzelman noted that the second paragraph should
be changed due to his California residence. The following change was noted:
- Change the first sentence of the second paragraph to read: "These
officials are authorized to attend two credit union-related conferences
within the region the live in." and omit all bulleted items.
VII. NEW BUSINESS
a. Future Agenda Items
Ms. Ross noted that she submitted a list to Mr. Cockburn of topics the Board
would like to have incorporated into future meetings. Board members were
directed to give Ms. Ross their opinions for any additions or subtractions to
the list.
b. Conferences
Mr. Cockburn made note of the conference information, concerning the 1993
Credit Union Officials Conference in Chatham, MA, included in the Board
package for the Board's consideration. It was also noted that Mr. Cockburn
would be taking part in a panel discussion called "Quality at Work".
c. Bylaws
Mr. Kinzelman noted that he would be attending a meeting in Washington DC and
would like to check into the status of the proposed DCU Bylaw changes. Mr.
McEachin noted that the Board should leave this issue in the hands of Joe
Melchione, DCU's General Counsel. Ms. Ross noted that the Board should not
interfere and should let Mr. Melchione handle everything. The Board
requested that an update from Mr. Melchione, regarding the proposed bylaw
changes, be given at the next Board meeting.
d. DEC Employees' Time Policy
Mr. Gransewicz inquired as to the status of the policy regarding DEC
Employees' time while serving as DCU volunteers. Mr. Cockburn informed the
Board that this policy should now be part of DEC's Policies and Procedures.
Mr. Gransewicz requested a written copy of the policy. Mr. Cockburn noted
that he should contact DCU liaison, Rob Ayres, to acquire a copy of the
document.
VIII. ADJOURNMENT
* It was moved by Mr. McEachin and seconded by Ms. Dawkins to Adjourn the
meeting at 6:04 p.m. MOTION CARRIED UNANIMOUSLY.
_______________________________ ___________________________________
Lisa DeMauro Ross, Philip Gransewicz,
Chairman Secretary
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| 2.16 | BoD meeting, June 25, 1993, Discussion->680 | ASE003::GRANSEWICZ | | Thu Aug 05 1993 13:56 | 444 |
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DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Board of Directors' Meeting
June 25, 1993
The meeting, held in the second floor training room of DCU's Headquarters
facility (PKO5), Parker Street, Maynard, MA, commenced at approximately
2:30 p.m.
EXECUTIVE SESSION
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GENERAL SESSION
II. REVIEW OF MINUTES
The Board reviewed the May 25, 1993, Board meeting minutes. The following
amendment was noted:
- Page 4 - third to last sentence: replace "for little or
no profit." with "the properties."
Ms. Dawkins requested that the minutes for the April Board of Directors'
meeting be reviewed for a notation of changes previously made to the Policy
on Officials Attending Conferences.
* It was moved by Mr. Kinzelman and seconded by Mr. Milbury to accept the
May 25, 1993, Board meeting minutes as amended. MOTION CARRIED
UNANIMOUSLY.
III. FINANCIALS
The Board requested that, going forward, the Financial Overview page be
used as a summary for the Financials section of the monthly Board minutes.
It was noted that this page is a new addition to the Board package.
Growth
Savings growth in May remained relatively flat. Year to date, savings have
declined $13 million, primarily in certificates of deposit and checking
accounts.
Consumer loans grew $1.8 million in May due mainly to a continued increase
in vehicle loans. As shown on the chart on page 21, consumer loans for the
year are growing at an annualized rate of 21.2%, a pace which is twice as
much as the projected growth for 1993.
Real estate loans held in our portfolio continue to decline based on DCU's
decision not to hold first mortgage loans at low fixed fates. The volume
of real estate loans sold on the secondary market remains extremely high
and therefore, as shown on page 22, real estate loans in total continue to
grow at an excellent rate, well above budget.
Loan Quality
The loan delinquency and chargeoff ratios are very low at .59% and .30%
respectively. Both of these important ratios were projected to grow in
1993 in light of the planned sponsor workforce reductions. They have,
however, remained well below the budgeted figures of 1% and .64% due to the
increased effectiveness of the collections department.
Profitability
Net income for May was $631,109, as compared to a budgeted amount of
$341,921. Net income for the year is $2.5 million, almost $1 million
better than budget, due mainly to lower than budgeted dividend expense,
favorable operating expense variances and other income earned from real
estate loans sold on the secondary market.
Capital
As a result of our controlled growth, excellent profitability, and low loan
losses, out Capital Ratio grew from 4.82% last December to 5.69%, the
highest in DCU's history.
IV. PRESIDENT'S REPORT
Mr. Cockburn updated the Board as to the status of the Future Board Agenda
Items listing submitted to management by Ms. Ross at the April Board
meeting. The listing noted when each topic would be addressed as well as
the senior managers responsible for them. It was noted that Delivery
Systems will be the major topic at the October Planning Conference. Mr.
Kinzelman requested that Interest Rate Refunds and Bonus Dividends be added
to the list.
EXECUTIVE SESSION
V. SUPERVISORY COMMITTEE
x
x
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x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
VI. LITIGATION AND BYLAWS UPDATE
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
GENERAL SESSION
Bylaws Update
Mr. Melchione noted that Bruce Pearson spoke with NCUA's regional office on
June 18, 1993, and they informed him that the proposed bylaw amendments had
been sent to the regions for comment. They should return to Mr. Bumgardner
with comments from the regions next week. At 4:25 p.m., Mr. Melchione
ended his conference call.
At 4:25 p.m., Ms. Dawkins asked the DCU management team to join the
meeting.
Present: Tanya Dawkins, Treasurer
Phil Gransewicz, Secretary
Paul Kinzelman
Gail Mann
Paul Milbury
Also Present: Bob Ketz, Supervisory Committee Member
Staff: Chuck Cockburn, President/CEO
Karen Etsell, Vice President of Marketing
Mary Madden, Vice President of Operations
Betty Moran, Director of Finance
Allan Prindle, Vice President of Lending
Stephanie Pomfret, Recording Secretary
Jim Regan, Internal Auditor
Karen Wall, Director of Human Resources
Absent: Tom McEachin, Vice Chairman
Lisa DeMauro Ross, Chairman
VII. RECOMMENDATIONS
a. Charge Offs
The Board reviewed the Charge Off Report for the month of June, 1993.
* It was moved by Mr. Kinzelman and seconded by Mr. Gransewicz to approve
the Charge Off Report for the month of June, 1993. MOTION CARRIED
UNANIMOUSLY.
b. Bank Secrecy Act
Ms. Madden noted that DCU's Bank Secrecy Act is currently in place. Mr.
Gransewicz inquired whether we should inform members who deposit large
amounts of money into their accounts, of their responsibility to file legal
forms for their transactions. Mr. Regan explained that this was not our
procedure.
* It was moved by Mr. Kinzelman and seconded by Mr. Milbury to approve
DCU's Bank Secrecy Act Policy as submitted. MOTION CARRIED UNANIMOUSLY.
c. Expense Reimbursement for Officials
Mr. Cockburn reviewed with the following addition to the Policy on
Officials Attending Conferences:
Page 2: fourth bullet item added to read: "Reimbursement for expenses
related to attending a credit union committee or Board meetings will be
limited to $100 per meeting."
The Board requested the following changes to the policy:
Page 1, third paragraph: Change second sentence to read: "The NCUA
regional guidelines for the state that the official lives in will apply for
those officials not living in Massachusetts."
Page 1, - Airlines: Replace the word "Treasurer" with "Executive
Committee"
Mr. Kinzelman requested a copy of the NCUA's regional guidelines listing
for his reference.
* It was moved by Ms. Mann and seconded by Mr. Gransewicz to approve the
Policy on Officials Attending Conferences as amended. MOTION CARRIED
UNANIMOUSLY.
x
x
x
x
x
x
x
x
x
VIII. COMMITTEE REPORTS
a. Supervisory Committee
Mr. Ketz noted that the committee met on June 21, 1993. The committee is
currently reviewing O'Rourke and Clark's Management Letter and are
encouraged by the quick response of management to what they consider
relatively minor issues mostly on procedures and accounting versus any
major internal control weaknesses. They have also reviewed and made some
suggestions to the Internal Audit Plan, but are satisfied that the audit
schedule is being adhered to, and that Mr. Regan has found no cases of
serious control concerns.
He also noted that the committee reviewed the first quarter financial data
with Ms. Moran, found trends to be satisfactory, and have requested a
review of all reserves for the next meeting. The committee also reviewed
the list of Supervisory Committee nominees and, based strictly on the
paperwork provided, they would like to endorse Fred Holland for the
position as they believe that the Supervisory Committee's agenda is more
financial in nature. Ms. Dawkins thanked Mr. Ketz for attending the
meeting.
b. Finance Committee
Ms. Dawkins noted that the committee held their last meeting on June 10,
1993. She explained that Ms. Moran reviewed the quarterly GAP Analysis and
noted positive results for DCU. DCU's investment strategy was subsequently
updated following these results. Two new investments, falling within the
1-2 year fixed rate strategy were reviewed as well as the EasCorp monthly
newsletter's article regarding Duration.
She also noted that Ms. Moran reviewed the status of DCU's Capital
Expenditure budget as well as financial highlights for the month of May,
1993. The Closed Branch Analysis, previously discussed by Ms. Moran, was
also reviewed at the meeting.
c. Human Resource Committee
Mr. Milbury noted that the committee held no meeting in June and had no
formal report for the Board.
d. Credit Appeals Committee
Mr. Prindle noted that the committee held no meeting in June and had no
formal report for the Board.
IX. UPDATES AND DISCUSSIONS
x
x
x
x
x
x
x
x
x
x
At 4:45 p.m., Mr. Milbury and Mr. Ketz left the meeting.
b. Roles and Responsibilities of Human Resource Committee and CEO
Mr. Gransewicz asked that this topic be tabled until the next Board
meeting. The Board agreed.
c. Truth-In-Savings
Ms. Madden noted that the initial documentation for Truth-in-Savings at DCU
has been distributed to all members of DCU staff and changes are currently
being made. More changes may be necessary once the official rules for DCU
are received.
d. Insurance Coverage
Ms. Moran reviewed with the Board the Summary of DCU Insurance Coverage.
The premiums had been added as requested by the Board at the last meeting.
Mr. Gransewicz questioned whether ATM coverage included anything other than
the equipment. Ms. Moran explained that only equipment is covered with
this insurance.
e. Analysis of Closed Branches
Ms. Moran reviewed with the Board the analysis of Growth in Major Balance
Sheet Items for a six month period (11/01/92 - 04/30/93). She noted that
the analysis showed DCU branch closings have had a minor impact on DCU's
lack of growth in the items analyzed. The closed branches used in the
analysis were: Westfield, Springfield, Greenville, SC, Burlington, VT, and
Northboro. Mr. Gransewicz questioned why the Puerto Rico branches were not
included in this analysis. Ms. Moran explained that the Puerto Rico
branches were on a different data base and therefore it was impossible to
include them in the analysis.
f. Officials Conference Attendance
Ms. Moran reviewed with the Board a summary, as of May 31, 1993, of
expenses incurred by officials while attending conferences. Ms. Dawkins
questioned whether airfare was included in this summary. Ms. Moran
explained that airfare was included.
g. Management Letter Action Plan
Mr. Regan updated the Board as to the status of the plan of action for the
areas of concern identified by O'Rourke and Clark Accountancy Corporation
in their management letter of March 11, 1993. He noted that the issue of
controls over undeliverable member statements was addressed on 5/25/93 and
is scheduled for completion on 9/30/93. He also noted that the three items
not yet completed are on schedule.
h. Marketing Update
Karen Etsell, Vice President of Marketing, updated the Board regarding
DCU's pre-approved auto loan promotion. She explained that 15,000 members,
pre-approved for auto loans, were mailed a certificate notifying them of
their $15,000 or $20,000 approval limit. Currently, the response rate for
this promotion is 2% for new auto loans and 8% for refinanced auto loans.
She also noted that a mortgage promotion, involving coupon deductions for
mortgage closing costs, is planned for mid-July.
X. OLD BUSINESS
Articles on Trial and DCU Bylaws
Mr. Cockburn noted that articles regarding the Mangone trial and DCU's
Bylaws have been included in this month's Board package as reference
material.
XI. NEW BUSINESS
None
XII. ADJOURNMENT
* It was moved by Mr. Kinzelman and seconded by Ms. Mann to adjourn the
meeting at 5:15 p.m. MOTION CARRIED UNANIMOUSLY.
_____________________________ ________________________________
Tanya Dawkins Phil Gransewicz
Treasurer Secretary
|
| 2.18 | BoD meeting, July 27, 1993, Discussion->690 | ASE003::GRANSEWICZ | | Tue Sep 07 1993 19:43 | 661 |
|
DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Board of Directors' Meeting
July 27, 1993
GENERAL SESSION
The meeting, held in the Massachusetts conference room of Digital Equipment
Corporation's Powdermill Road facility (MSO2), 111 Powdermill Road,
Maynard, MA, commenced at approximately 2:30 p.m.
Present: Tanya Dawkins, Treasurer
Phil Gransewicz, Secretary
Paul Kinzelman (via conference call)
Gail Mann (2:43 p.m.)
Tom McEachin, Vice Chairman (3:32 p.m.)
Paul Milbury (2:47 p.m.)
Lisa DeMauro Ross, Chairman
Staff: Chuck Cockburn, President/CEO
Mary Madden, Vice President of Operations
Betty Moran, Director of Finance
Stephanie Pomfret, Recording Secretary
Allan Prindle, Vice President of Lending
Karen Wall, Director of Human Resources
I. ROLL CALL AND DETERMINATION OF QUORUM
Ms. Ross noted that Mr. McEachin would be arriving at the meeting
approximately one hour late, therefore, the President's Report and the
Human Resource Committee Report would be tabled until Mr. McEachin's
arrival. She also noted that "Member Correspondence Flowchart" would be
added as letter "a" under Updates and Discussions, and the Marketing Update
would be discussed before the Competitive Analysis. Mr. Prindle would be
taking Ms. Etsell's place in discussing both the Marketing Update and the
Competitive Analysis.
II. REVIEW OF MINUTES
Mr. Kinzelman noted that the financial summary is a comprehensive addition
to the minutes and should be made available to the membership.
The Board reviewed the June 25, 1993, Board Meeting minutes. The following
changes were recommended:
1. Page 1, under I. ROLL CALL AND DETERMINATION OF QUORUM: before the
first paragraph add a subheading to read: "Supervisory Committee Vacancy
Preparation"
2. Page 2: begin the text with "GENERAL SESSION"
Board of Directors' Meeting
July 27, 1993
Page - 2
3. Page 3, under IV. PRESIDENT'S REPORT: after the last sentence add:
"EXECUTIVE SESSION"
4. Page 4, under VI. LITIGATION AND BYLAWS UPDATE: after the third
paragraph add "GENERAL SESSION"
5. Page 5, under VII. RECOMMENDATIONS, b. Bank Secrecy Act: reword the
second sentence to read "Mr. Gransewicz inquired whether we should inform
members, who deposit large amounts of money into their accounts, of their
responsibility to file legal forms for their transactions."
6. Page 7, under IX. UPDATES AND DISCUSSIONS, a. Participation Loan
Update: change the last sentence to be its own paragraph.
* It was moved by Mr. Gransewicz and seconded by Ms. Dawkins to approve
the June 25, 1993, Board Meeting minutes as amended. MOTION CARRIED
UNANIMOUSLY.
II. FINANCIAL REPORTS
Mr. Milbury requested the following change be made to the Financial
Overview page: under Profitability, second sentence: after "3.1 million"
add "year-to-date".
Growth
Savings grew $6.7 million in June due in part to quarterly dividend posting
and because the month ended on a Wednesday (payroll deposits). Year to
date, savings have declined $6.5 million, primarily in certificates of
deposit and checking accounts.
While consumer loans in total dropped $100,000 in June, it is significant
to point out that we sold almost $1 million of our student loan portfolio.
This means that other consumer loans grew by that same $1 million. The
growth continues to be in vehicle loans. As shown on the chart on page 22,
consumer loans for the year are growing at an annualized rate of 17.4%, a
pace which is well above the projected growth for 1993.
Real estate loans held in our portfolio dropped slightly in June. The
volume of real estate loans sold on the secondary market remains extremely
high and therefore, as shown on page 23, real estate loans in total
continue to grow at an excellent rate, well above budget.
Loan Quality
The loan delinquency and chargeoff ratio's are very low at .49% and .36%
respectively. Both of these important ratio's were projected to grow in
1993 in light of the planned sponsor workforce reductions. They have,
however, remained well below the budgeted figures of 1% and .54% due to the
increased effectiveness of the collections department.
Board of Directors' Meeting
July 27, 1993
Page - 3
Profitability
Net income for June was $663,791, as compared to a budgeted amount of
$329,479. Net income for the year is 3.1 million year to date, $1.3
million better than budget, due mainly to lower than budgeted dividend
expense, favorable operating expense variances and other income earned from
real estate loans sold on the secondary market. We also realized a net
gain of $155,600 in June on the sale of two participation loan properties.
Capital
As a result of our controlled growth, excellent profitability, and low loan
losses, our Capital Ratio grew from 4.82% last December to 5.79%, the
highest in DCU's history.
IV. COMMITTEE REPORTS
a. Supervisory Committee
Mr. Regan noted that the committee held no meeting in July and had no
formal report for the Board.
b. Finance Committee
Ms. Dawkins noted that the committee held no meeting in July and had no
formal report for the Board.
d. Credit Appeals Committee
Mr. Prindle noted that the committee held no meeting in July and had no
formal report for the Board. Ms. Ross mentioned that she answered a memo
from Christopher Fillmore Gillett, Vice Chairman of the Credit Appeals
Committee, informing him of the following:
1. Reports/Minutes - Please arrange through Stephanie to have a
secretary available to attend your meetings and record the minutes. These
minutes will be included in the Board package as the committee's report to
the Board. While reviewing the Board materials, if there are any questions
that pertain to the report, then Board members can contact either of you
for explanation.
2. I have requested of Chuck to have Allan attend the Credit
Appeals Committee meetings ONLY on the request of the committee, to answer
questions specific to the loan packages to be reviewed.
She also noted that a copy of the response was forwarded to Donna Nemensky,
Chairperson of the Credit Appeals Committee for her review.
Board of Directors' Meeting
July 27, 1993
Page - 4
V. UPDATES AND DISCUSSIONS
a. Member Correspondence Flowchart
Mr. Cockburn reviewed an overhead outlining the seven member
correspondences received to date concerning the recent article in DCU's
Network newsletter. He then reviewed a handout flowcharting a new process
for handling member correspondences. Ms. Ross noted that copies of all
letters would be available to the Board upon request. Ms. Dawkins
requested that a summary of correspondences received should be presented to
the Board each month going forward. Mr. Gransewicz noted that he intends
to continue answering any personal memos he may receive. Ms. Dawkins
explained that this new process would only be used in the event that a
member sends a correspondence to the entire Board. Ms. Ross added that in
instances when a memo is sent over the vax system with a distribution list,
Mr. Gransewicz should inform the member that the correspondence has been
received and the Board will respond. Mr. Kinzelman explained that, when an
individual Board member is sent a member correspondence, that Board member
should send the DCU member a note stating that the correspondence has been
received. In this instance, the member will be informed even if the memo
should bypass the Secretary.
Mr. Cockburn then provided a handout of a recently received member letter.
Mr. Gransewicz inquired, due to the letter's positive tone toward DCU,
whether DCU planned to publish the letter in the next issue of Network.
Mr. Cockburn noted that management considered this, but later decided
against it. He agreed that management would reconsider publishing it.
b. Pension Plan
Ms. Wall explained that DCU's maximum 401K Plan employee contribution has
been changed to 20% of the employee's gross salary. She noted that the
maximum level was previously 13%. Ms. Mann asked whether DCU has a
matching program for the 401K Plan. Ms. Wall explained that DCU will match
up to 3% of any employee's contribution.
c. Credit Scoring
Mr. Prindle explained that DCU has been utilizing Credit Scoring to acquire
loan applicant credit information for approximately one year. Enough data
has been compiled to test if the system is working as intended. DCU
conducted a test of 143 loans previously charged off between the months of
December, 1991, and December, 1992. The results of this test showed that
78 of the loans (45%) would have been recommended for denial if Credit
Scoring had been used.
He also reviewed an Override Report by Loan Officer (January 1, 1993, to
June 30, 1993) which determined the amount of manual overrides and whether
they were acceptable. Mr. Kinzelman requested that this report be further
sorted based on secured and unsecured types of loans.
At 3:32 p.m., Mr. McEachin joined the meeting.
Board of Directors' Meeting
July 27, 1993
Page - 5
d. Marketing Update
Handouts of DCU's Pre-Approved Auto/Refi Promotion and DCU's Mortgage
Promotion were distributed to the Board. Mr. Prindle noted that results to
date were as follows:
New/Used Auto - Response Rate = 1% (2% projected)
- Total Loans to Date = $1,320,497
($530,000 Breakeven)
Auto Refinance - Response Rate = 5% (8% projected)
- Total Loans to Date = $383,312
($51,080 Breakeven)
Mortgage Promo - Response Rate = .22% (.5% projected)
- Total Loans to Date = $5,993,600
($854,000 Breakeven)
e. Competitive Analysis
In response to the Board's request, Mr. Prindle reviewed competitive rate
information for DCU's Loan and Savings Products. He also reviewed several
overheads outlining past survey data regarding these products.
Data showed that DCU is equal or better than the competition in all aspects
of its Loan and Savings products. Mr. Gransewicz noted that he holds a
Bank 1 credit card and, contrary to the data given, is not charged an
annual fee. Mr. Prindle noted that it may be the type of card
(classic/gold) that he is holding which decides whether or not he is
charged a fee. Mr. Prindle agreed to look into the matter.
Mr. Kinzelman inquired whether this information could be posted in the DEC
NotesFiles. Mr. Cockburn noted that this would not be a wise idea, for if
rates from other institutions were printed incorrectly, DCU could be sued.
In response to suggestions from the Board, Mr. Cockburn agreed to find a
way to better advertise DCU's competitiveness to its members.
EXECUTIVE SESSION
VI. PRESIDENT'S REPORT
x
x
x
Board of Directors' Meeting
July 27, 1993
Page - 6
x
x
x
x
x
x
x
x
x
x
x
x
Board of Directors' Meeting
July 27, 1993
Page - 7
x
x
x
GENERAL SESSION
VII. COMMITTEE REPORTS (continued)
c. Human Resource Committee
Gainsharing
Mr. Cockburn reviewed with the Board DCU's Gainsharing Plan previously
approved by the Human Resource Committee. An outline of the Plan is as
follows:
1. If DCU exceeds the budgeted net income goal (of $3,562,237) by
$100,000 or more, eligible employees will receive a bonus of 1% of their
gross salary.
2. If the net income goal exceeds budget by $500,000 or more,
employees will receive 5% of the amount in excess of budget in equal
proportion.
3. The President/CEO and Senior Managers, as well as employees
who are not performing satisfactorily, are not eligible for Gainsharing.
4. In order to release the money before the end of the year,
December data will be estimated based on the January - November period.
A handout was provided outlining DCU's Discontinued Recognition/Reward
Programs. Mr. Cockburn explained that he discontinued these programs
within his first 3 or 4 months of employment at DCU because they were not
appropriate for the Quality Initiative. This new Gainsharing program will
take the place of the discontinued programs and will better ease employees
into utilizing the tools of Total Quality Management.
Board of Directors' Meeting
July 27, 1993
Page - 8
Mr. Milbury requested that the outline should state "if the net income goal
exceeds the budget by $500,000 or more, employees will receive 5% of the
amount in excess of the budget, minus $500,000, in equal proportion, in
addition to the 1% of their gross salary".
EXECUTIVE SESSION
x
x
x
x
x
x
x
x
x
Board of Directors' Meeting
July 27, 1993
Page - 9
x
x
x
GENERAL SESSION
Ms. Ross asked for a consensus for Mr. Cockburn to proceed with the
implementation of the Employee Gainsharing Plan. (5 in favor: Mr.
McEachin, Ms. Dawkins, Ms. Mann, Mr. Milbury and Ms. Ross; 2 opposed: Mr.
Gransewicz and Mr. Kinzelman) CONSENSUS GRANTED.
At 5:55 p.m., the Board took a short dinner break. At 6:00 p.m., Joe
Melchione, DCU's General Counsel, joined the meeting via conference call.
VIII. OLD BUSINESS
a. Litigation Update
x
x
x
b. Bylaws Update
Mr. Melchione informed the Board that he is in receipt of the NCUA's
official response to the proposed bylaw amendments. He noted that the
response contained several typos which NCUA's regional office has offered
to correct. He also noted that those proposed amendments denied by the
NCUA would be put through the appeals process for approval. Mr. Kinzelman
inquired when the bylaws could be adopted. Mr. Melchione explained that
the bylaws could be adopted when the typos are corrected. This could be
completed in approximately one week, however, he advised the Board to
inform the membership of the appeals process and the Board's attempt to
complete this effort.
Board of Directors' Meeting
July 27, 1993
Page - 10
Ms. Dawkins requested that a Board memo be drafted regarding the bylaw
amendments. Mr. Gransewicz noted that a combination of both litigation and
bylaws information would be ideal. Mr. Melchione noted that he would like
the opportunity to review the memo before the entire Board does the same.
It was agreed that a Board memo regarding the bylaws would be drafted for
the month of August.
x
x
x
At 6:12 p.m., Mr. Melchione ended his conference call. Ms. Ross informed
the Board that an addition to the agenda, regarding a Board Member Loan,
would be discussed at this time.
IX. RECOMMENDATIONS
a. Board Member Loan
x
x
x
X. COMMITTEE REPORTS (continued)
c. Human Resource Committee
Gainsharing (continued)
Ms. Ross noted that, during the break, there seemed to be some questions
regarding the consensus vote for DCU's Gainsharing Plan. She recommended
that a motion be made stating that Gainsharing is considered a compensation
issue and is therefore under the CEO's authority to implement such a plan.
Board of Directors' Meeting
July 27, 1993
Page - 11
* It was moved by Ms. Dawkins and seconded by Ms. Mann to recognize that
Gainsharing is considered a compensation issue and is therefore under the
CEO's authority to implement such a plan. (Six in favor: Mr. McEachin,
Ms. Dawkins, Mr. Kinzelman, Mr. Milbury and Ms. Ross; and one opposed:
Mr. Gransewicz.) MOTION CARRIED.
GENERAL SESSION
XI. UPDATES AND DISCUSSIONS (continued)
f. Process for Replacing Officials
Mr. Cockburn reviewed with the Board a flowchart, outlining a Process for
Replacing DCU Officials. He asked for any feedback the Board may have
regarding the process. The Board requested the following amendments:
1. Title should read: "Process for Replacing DCU Volunteer
Officials"
2. Step 3 should read: "Secretary Solicits Interest from
Membership"
3. Step 5 should read: "Chairman Obtains Resumes From Interested
Persons and Distributes to the Board"
Mr. Gransewicz inquired if any vacancies could be announced in a DCU
Network mailing. Mr. Cockburn noted that printing any vacancy
notifications in the quarterly Network publication might mean waiting up to
six (6) months before a new official is chosen. Ms. Ross inquired if the
Board wanted to wait that period of time. The Board agreed against
waiting. Ms. Dawkins inquired whether vacancy announcements could be
included in a monthly mailing. Mr. Cockburn noted that only those members
with checking accounts at DCU receive statements each month, and including
vacancy announcements in the statement mailings would not allow for
notification of the entire membership. Ms. Ross suggested that a memo be
included in the next issue of Network asking for names of members
interested in becoming more active in DCU. Their names would be put on a
mailing list of interested individuals who would be notified when openings
occur. This would allow the Board full coverage to interested individuals
without providing a special mailer to all members between newsletter
publications. Mr. Gransewicz felt that this sort of solicitation allows
for the predetermination of volunteers. It was noted that a mailing list
would be the best vehicle to inform interested members of vacancies.
At 6:27 p.m., Ms. Mann left the meeting.
Ms. Gransewicz explained that he feels Board positions do not fit into this
process. He noted that Board Election candidates who come in second are
prime candidates for a replacement position. Mr. Cockburn noted that this
type of succession replacement process would require a change in the bylaws
of DCU. Ms. Dawkins noted that other members may be interested in the
position and should be considered.
Board of Directors' Meeting
July 27, 1993
Page - 12
Mr. Gransewicz noted that if a Board member resigns within the first year
of his/her term, the next candidate in line in the election should be the
replacement. Ms. Dawkins inquired what Mr. Gransewicz feels the Board
should do if the next candidate in line received no votes in the election
and had no real skills for the position. Ms. Ross asked Mr. Gransewicz to
make a motion on this aspect for a Board vote. Mr. McEachin noted the
process for selecting Board members is stated in the bylaws. Mr. Cockburn
noted that a policy would have to be adopted by the Board to create a
different process.
* It was moved by Mr. Gransewicz and seconded by Mr. Kinzelman to appoint
the candidate from the Board election, with the next highest number of
votes, to fill the open position if a Board member resigns within the first
year of his/her term. (Two in favor: Mr. Gransewicz and Mr. Kinzelman;
and four opposed: Ms. Ross, Mr. McEachin, Ms. Dawkins and Mr. Milbury.)
MOTION FAILED.
Discussion Continued. Ms. Ross noted that the flowcharted process would
allow all members the option to be considered and would give all members a
fair chance to serve. Further, it would not exclude individuals who had
participated in the regular election process from consideration.
Mr. Gransewicz noted that he feels the Supervisory Committee vacancy vote
was tainted due to an endorsement by the Supervisory Committee. He
proceeded to read the following submission to the minutes of this meeting:
"As a Director of Digital Employees' Federal Credit Union, I feel it is my
responsibility to address a situation that occurred at our last Board
meeting. I feel that the situation surrounding this Board's selection of a
replacement for the Supervisory Committee was improperly influenced by an
"endorsement" of one of the volunteers by the Supervisory Committee.
An endorsement of any of the volunteers was not requested by the Board to
my knowledge. It is the Board's responsibility to choose members who wish
to serve on the Supervisory Committee. Three members came forward and
"volunteered" for the position. The Board felt it important enough to
allocate time to personally interview all of the volunteers. To my
knowledge, the Supervisory Committee interviewed NONE of the volunteers. I
have reviewed the minutes of the Supervisory Committee meetings since the
beginning of the year and find NO vote to endorse a member as a
replacement. If an endorsement in fact had been voted, then I believe it
to be improper that it is not documented in the minutes.
But what has me more concerned than any of the above, is that the candidate
approved for the Supervisory Committee was a hand-picked replacement
recruited by Supervisory Committee Chairman, Steve Behrens. I would have
no problem with it if Mr. Behrens had asked multiple people to "volunteer"
for the position or if he had disclosed his involvement in the recruitment
of the individual. However, neither of these were done. Only after the
approval process did Mr. Behrens disclose this fact to me in a phone
conversation. This type of hand-picking of "volunteers" is not in the best
interests of DCU or its members, in my opinion.
Board of Directors' Meeting
July 27, 1993
Page - 13
It encourages the good-old-boy mentality at the expense of two DCU members
who TRULY volunteered to serve on the Supervisory Committee. When it comes
time to ask for volunteers, then we will have no volunteers if DCU members
believe that the fix is in.
In the future, I believe it is of utmost importance to ensure the process
remains fair and open. Any and all committee openings should be publicized
to the ENTIRE membership. Also, any recruitment of volunteers should be
fully disclosed. Finally, no endorsements from current committee members
should be allowed."
Ms. Ross noted that she felt Mr. Behrens did not influence the Supervisory
Committee vacancy vote. She noted that she voted for the person she felt
would best serve on the committee. Ms. Dawkins noted the the flowcharted
process will eliminate any uncertainty of how to replace officials in the
future. Discussion continued.
Mr. Gransewicz noted that the recruitment of candidates is unfair to other
members who really do volunteer for positions. He also noted that the
committee has no right to endorse candidates. Mr. Cockburn noted that
every official has the right to free speech and therefore may endorse
whomever they wish to a position.
Mr. Kinzelman asked the Board to consider the historical background of the
Board of Directors of DCU. He noted that the previous Board and
Supervisory Committee took part in the "good-old-boy" approach that Mr.
Gransewicz mentioned. He feels that type of atmosphere should not be
fostered. Mr. Cockburn noted that the Chairman of the Board requested that
the Supervisory Committee recruit volunteers and they did as she
instructed. Ms. Dawkins noted that every official had the right to solicit
volunteers for vacancies.
Ms. Ross informed the Board that the new Process for Replacing Volunteer
Officials will be utilized to fill another Supervisory Committee vacancy.
She noted that Rebecca Hawkins has resigned from the committee and a
replacement is needed. Mr. Gransewicz questioned why Ms. Hawkins did not
mention any thoughts of resignation when asked during the prior Supervisory
Committee vacancy election. Ms. Ross explained that Ms. Hawkins did not
officially resign until after the Supervisory Committee vacancy vote and
therefore, another appointment will be necessary.
Ms. Ross explained that she felt Mr. Gransewicz's comments in his official
submission to the minutes of this meeting reflected extremely poorly on the
entire Board of Directors. His comments incorrectly labeled the process as
tainted and also questioned the integrity of the Board and their vote. She
and Ms. Dawkins both felt that his comments were a result of poor judgment
on the part of Mr. Gransewicz as well as completely uncalled for.
Board of Directors' Meeting
July 27, 1993
Page - 14
XII. RECOMMENDATIONS (continued)
b. Charge Offs
* It was moved by Mr. McEachin and seconded by Mr. Milbury to approve the
Charge Off Report for the month of July, 1993. MOTION CARRIED UNANIMOUSLY.
Ms. Ross noted that the following items on the agenda would be tabled until
the next Board of Directors' meeting:
- HRC: Roles and Responsibilities
- UPDATES/DISCUSSIONS: Benchmarking
Liaison Meeting
- RECOMMENDATIONS: Credit Appeals Committee
- OLD BUSINESS: Policy on Officials Travel and Conference
Committee Assignments
XIII. ADJOURNMENT
* It was moved by Mr. McEachin and seconded by Ms. Dawkins to adjourn the
meeting at 6:40 p.m. MOTION CARRIED UNANIMOUSLY.
_______________________________ _____________________________
Lisa DeMauro Ross Phil Gransewicz
Chairman Secretary
|
| 2.17 | BoD meeting, July 8, 1993, Discussion->689 | ASE003::GRANSEWICZ | | Tue Sep 21 1993 18:42 | 73 |
|
DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Board of Directors' Meeting
Thursday, July 8, 1993
8:00 a.m.
EXECUTIVE SESSION
Present via Conference Call:
Tanya Dawkins, Treasurer
Phil Gransewicz, Secretary
Paul Kinzelman
Gail Mann
Tom McEachin, Vice Chairman
Paul Milbury
Lisa DeMauro Ross, Chairman
Staff: Chuck Cockburn, President/CEO
Eileen Galligan, Mortgage Operations Manager
Stephanie Pomfret, Recording Secretary
I. STAFF MEMBER LOAN
x
x
x
GENERAL SESSION
II. SUPERVISORY COMMITTEE VACANCY
Ms. Ross noted that Mr. Fred Holland and Mr. Steve Sherman were the two
candidates chosen for consideration by the Board at the last Board meeting.
She noted that a majority vote would decide which of the two candidates
would serve on DCU's Supervisory Committee. The Board voted as follows:
Fred Holland: Gail Mann, Paul Milbury, Lisa DeMauro Ross,
Tom McEachin,
Steve Sherman: Paul Kinzelman, Tanya Dawkins, Phil Gransewicz
Ms. Ross noted that the majority had chosen Mr. Fred Holland to fill the
Supervisory Committee vacancy. She also noted that letters would be sent
to all nominees informing them of their outcome in the election.
Board of Directors' Meeting
July 8, 1993
Page - 2
EXECUTIVE SESSION
III. LITIGATION UPDATE
x
x
x
At 9:20 a.m., the Board ended its conference call.
______________________________ ____________________________
Lisa DeMauro Ross Phil Gransewicz
Chairman Secretary
|
| 2.19 | UNREDACTED BoD meeting, April 27, 1993, Discussion->707 | ASE003::GRANSEWICZ | | Wed Sep 22 1993 01:00 | 642 |
|
DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Board of Directors' Meeting
April 27, 1993
The meeting, held in the second floor training room of DCU's headquarters
facility, PKO5 (141 Parker Street, Maynard, MA), commenced at approximately
2:39 p.m.
GENERAL SESSION
Present: Tanya Dawkins, Treasurer (2:49 p.m.)
Lisa DeMauro Ross, Chairman
Phil Gransewicz
Paul Kinzelman, Secretary
Gail Mann
Tom McEachin, Vice Chairman
Paul Milbury
Also Present: Karen Kupferberg, Supervisory Committee Member
Staff: Chuck Cockburn, President/CEO
Karen Etsell, Vice President of Marketing
Mary Madden, Vice President of Operations
Betty Moran, Director of Finance (2:49 p.m.)
Allan Prindle, Vice President of Lending
Stephanie Pomfret, Recording Secretary
Jim Regan, Internal Auditor
Karen Wall, Director of Human Resources
I. REVIEW OF MINUTES
The Board reviewed the March 23, 1993, Board meeting minutes. The
following amendments were made:
- page 2, letter c: reword the second sentence
- page 2, letter d, first hyphen: change the word "February" to
"the year".
* It was moved by Mr. McEachin and seconded by Mr. Milbury to accept the
March 23, 1993, Board meeting minutes as amended. MOTION CARRIED
UNANIMOUSLY.
II. FINANCIALS
Lisa DeMauro Ross, chairman, noted that this topic would be tabled until
the arrival of Tanya Dawkins, Treasurer, and Betty Moran, Director of
Finance.
Board of Directors' Meeting
April 27, 1993
Page - 2
III. PRESIDENT'S REPORT
Ms. Ross noted that this topic would be tabled until after the Committee
Reports section of the meeting.
IV. COMMITTEE REPORTS
a. Supervisory Committee
Ms. Ross introduced Karen Kupferberg, Supervisory Committee member, to the
Board. Ms Kupferberg noted that the Supervisory Committee did not hold a
meeting in April and, therefore, had no formal report for the Board. She
also noted that the next Supervisory Committee meeting is scheduled for May
25, 1993.
b. Finance Committee
It was noted that the Finance Committee held no meeting in April and,
therefore, had no formal report for the Board.
c. Human Resource Committee
Ms. Ross informed the Board that the Human Resource Committee held no
meeting in April and, therefore, had no formal report for the Board.
d. Credit Appeals Committee
Allan Prindle, Vice President of Lending, noted that a meeting of the
Credit Appeals Committee was held on April 12, 1993. Of the five loans
that were submitted for review, three were denied, one was approved with a
cosigner, and one was counter-offered. He also noted that, year-to-date,
the committee has held three meetings and reviewed a total of eight loans.
Of the eight reviewed, five have been denied, one has been approved with a
cosigner, two have been counter-offered and one is pending further
information.
Mr. Milbury questioned what would be considered a counter-offer in these
cases. Mr. Prindle explained that, as an example, if a member is denied a
large, unsecured line of credit, DCU would suggest a home equity line of
credit as an alternative. Mr. Milbury then questioned whether or not there
was a way to suggest a counter-offer to these members before the appeals
process. Mr. Prindle went on to explain that the Credit Appeals Committee
will assess these situations in an attempt to improve original offers to
the membership rather than having to wait for the appeals process.
Board of Directors' Meeting
April 27, 1993
Page - 3
III. PRESIDENT'S REPORT
Delivery Systems
Ms. Dawkins and Ms. Moran joined the meeting at 2:49 p.m. Chuck Cockburn,
President/CEO, provided a handout outlining DCU's Delivery System
objectives for 1993. He reviewed the following four strategies and their
objectives:
1. Increase member reliance on electronic delivery systems, mail and
the Information Center by:
a. improving their effectiveness
b. educating staff and members on their advantages
c. considering pricing and/or policies as an incentive or
disincentive
2. Modify and adjust delivery systems to provide cost-effective
service:
a. consider off-site branches
b. shared branches (research)
3. Analysis of peak time staffing
4. Move branches from transactions-oriented to sales culture:
a. train and educate staff
b. implement branch merchandising and marketing
c. change branch layout
Mr. Kinzelman inquired whether a financial incentive to move routine
transactions from branches to ATMs could be implemented. Mr. Cockburn
noted that a Quality Team Project is currently underway in Merrimack to
improve ATM usage. The team consists of branch personnel and a member of
the ATM department. Ms. Madden, Vice President of Operations, noted that
during the effort, 96 ATM card applications were handed out at the branch,
and a total of 70 were returned.
Mr. Kinzelman requested that DCU look into the difference in cost between
network ATM machine transactions and DCU drive-up window transactions. Mr.
Gransewicz noted that DCU needs to stress how easy it is to use DCU ATM
cards virtually anywhere. Ms. Ross also noted that an incentive to move
transactions from branches to ATMs did not necessarily need to be financial
to be effective.
Board of Directors' Meeting
April 27, 1993
Page - 4
III. FINANCIALS
Ms. Dawkins reviewed with the Board, DCU's financial reports for the month
of March, 1993. She noted the following:
- Quarterly reports are included in this month's Board package.
- The bottom line for the first quarter of 1993 is favorable.
- Net Income for the month exceeded the budgeted amount by $90,000
due partly to the refinancing trend and lower operating
expenses.
- Total operating expenses should be favorable. (noted as
unfavorable on statement of income and expense report in Board
package)
- Capital Ratio was 5.28% at the end of the month.
- Delinquency was better than budget for the month.
- Savings increased by 1.4%.
- Loan growth was slightly negative due partly to the
participation loans reclassification.
Mr. Kinzelman questioned why the Annual Meeting cost totaled $24,000. Ms.
Moran explained that the cost of the election was included in this figure.
Mr. Cockburn made note of the new charts being used for delinquency and
charge offs. Mr. Kinzelman noted that he agreed with using zero as an axis
for these charts. Mr. McEachin questioned whether or not DCU investment
figures should be compared with a rate other than that of Fed funds. Mr.
Cockburn agreed that another benchmark should be found now that DCU is no
longer dealing with Fed funds.
V. UPDATES AND DISCUSSIONS
a. Branch Update
Ms. Madden noted that Carol Raposa has been hired as DCU's new Branch
Network Manager. Ms. Raposa spent 22 years in branch administration for
Boston Federal Savings and Loan before joining DCU and she is currently in
training and visiting branches.
She also noted that Digital Equipment Corporation (DEC) is downsizing its
Northboro facility to approximately 50 employees, therefore, DCU will be
closing its branch there. The branch is scheduled to close on Friday,
April 30, 1993. Branch staff have been notified and closedown procedures
are underway.
b. Annual Report
Ms. Etsell distributed to the Board copies of the April 29, 1993, Annual
Meeting agenda. She noted that the meeting is scheduled to begin at 5:30
p.m., at the Maynard Rod and Gun Club and that copies of the annual report
and the agenda would be available at the door. Ms. Pomfret will be taking
minutes at the meeting and Pat Cramm, DCU's Security Officer, has been
chosen to serve as the meeting's parliamentarian. Ms Etsell also noted
that the election results will be announced at the meeting and an
Organizational Meeting of the Board to elect its officers is scheduled
for the following Tuesday.
Board of Directors' Meeting
April 27, 1993
Page - 5
c. Marketing Plan
Ms. Etsell reviewed with the Board the following overheads regarding DCU's
1993 Marketing Plan:
1. 1993 Marketing Objectives
2. Priority Products and Services
3. Vehicles to Achieve Goals
4. Ongoing Promotions
5. Public Relations
6. Direct Mail
7. Marketing Profiles, Inc.
8. Sales and Service Culture
9. Marketing Plan Summary
10. Direct Mail Promotions
She noted the following:
- Jennifer Peterson, DCU's Advertising/Promotion Manager will aid DCU's
efforts to bring production in-house.
- Marketing Profiles, Inc. (MPI) of Florida provides DCU with a Marketing
Customer Information File (MCIF), a computer based information system,
which will allow DCU to target-mail its promotions rather than the current
mass-mailing technique.
Mr. Kinzelman questioned how MPI acquires its information. Ms. Etsell
explained that MPI purchases databases from smaller companies. Mr.
Gransewicz questioned whether the information from MPI would be
DCU-specific. Ms. Etsell explained that MPI only gives DCU information
that targets DCU membership.
Mr. Gransewicz noted that DCU needs to schedule a membership drive. Ms.
Etsell noted that the marketing department would also like to complete its
New Member Package before a membership drive takes place.
d. Real Estate Loan to Value
Mr. Prindle reviewed the quarterly Real Estate Loan to Value Analysis with
the Board. The analysis looked at first mortgages and home equity lines
of credit separately to show that the credit union has an excellent real
estate loan portfolio.
Board of Directors' Meeting
April 27, 1993
Page - 6
VI. RECOMMENDATIONS
b. Charge Offs
Mr. Prindle reviewed with the Board, the Charge Off Report for the month of
April, 1993.
* It was moved by Mr. McEachin and seconded by Mr. Milbury to approve the
April, 1993, Charge Off Report as submitted. MOTION CARRIED UNANIMOUSLY.
c. Field of Membership
Mr. Cockburn provided a handout stating DCU's current Field of Membership
Policy. He reviewed a recommendation to expand DCU's Field of Membership
to include Digital-related parties such as subsidiaries and contract
workers. He noted that, if approved, management will work with General
Counsel on the exact wording before requesting NCUA approval.
During discussion, Mr. McEachin noted that the Board needs to agree whether
or not subsidiaries and contract workers should be considered eligible for
DCU membership. Ms. Mann noted that adding subsidiaries' employees would
only be a technical change to the original guidelines. Mr. Gransewicz
noted that he felt the recommendation to add contract workers is too far
outside DCU's current Field of Membership.
Discussion continued. Ms. Ross noted that due to employee downsizing and
the ways United States corporations are currently constructing their
workforces with subsidiaries and contract workers, it is necessary to
consider this addition. Mr. Gransewicz noted that contract workers are not
really DEC employees. Ms. Ross noted that DCU needs to change with the
country's current workforce situation. Mr. Kinzelman noted that it would
be very cost-effective to DCU to expand its membership in this manner.
Ms. Dawkins requested that subsidiaries and contract workers be considered
separately in this recommendation. Ms. Ross noted that a decision
regarding contract workers will be tabled until further information can be
obtained.
* It was moved by Mr. Gransewicz and seconded by Ms. Mann to approve the
recommendation to include Digital subsidiaries in DCU's Field of Membership
Policy. MOTION CARRIED UNANIMOUSLY.
Ms. Mann requested that Mr. Cockburn discuss the contract workers issue
with the liaisons. Mr. Cockburn noted that a Board decision must be made
before he could speak with the liaisons. At 4:17 p.m., the Board took a
short break. At 4:30 p.m., Ms. Ross reconvened the meeting into General
Session.
Board of Directors' Meeting
April 27, 1993
Page - 7
VI. RECOMMENDATIONS
a. Pricing
Mr. Cockburn reviewed the following charts attached to the recommended
Pricing Policy:
1. Comparison of DCU Relationship and Non-Relationship Households (as of
March 31, 1993) - Mr. Cockburn noted that DCU is losing approximately $2.5
million annually due to non-relationship households.
2. DCU Checking Accounts as of March 31, 1993 (amounts in thousands) - Mr.
Cockburn noted that non-relationship households make up approximately 1/2
of DCU's total checking accounts, but only account for 9.7% of total
balances.
3. Distribution of Non-Relationship Checking Accounts by Minimum Balance
for March, 1993 - Mr. Cockburn noted that non-relationship households, with
checking account balances totaling less than $1.00, make up approximately
1/4 of the total checking accounts at DCU.
4. Estimation of Checking Account Fee Income Based on $4.00 Monthly Fee
for Non-Relationship Accounts that do not Maintain a Minimum Balance (based
on March, 1993 data)
5. Distribution of Money Market Accounts by Balance as of March 31, 1993
6. Distribution of IRA Accounts by Balance as of March 31, 1993
7. Distribution of Certificate Accounts by Balance as of March 31, 1993
8. Distribution of "Other" Share Accounts by Balance for March, 1993 - Mr.
Cockburn noted that "other" accounts totaling less than $100 make up 1/2 of
the total "other" accounts. Mr. Gransewicz noted that this is an arbitrary
"snapshot in time". Ms. Dawkins noted that 1992 Planning Conference data
from November showed the same information.
9. Distribution of "Other" Share Accounts by Number Held - Mr. Cockburn
noted that 63.51% of total "other" account holders only have one "other"
account with DCU. He also noted that this information did not include Club
Accounts.
10. Comparison of Credit Card Relationship & Non-Relationship Households as
of December 31, 1992 (amounts in thousands)
11. Distribution of Interest and Interchange Income for a Sample of Closed
Credit Card Accounts - Mr. Cockburn noted that this information was taken
during a window of the annual credit card fee charges. He also noted that
the members that closed their amounts during a fee charge month had
insignificant interchange income.
Board of Directors' Meeting
April 27, 1993
Page - 8
Ms. Dawkins questioned how management arrived at the minimum balance
requirement figure of $3,500. Mr. Cockburn explained that this limit was
reached after analyzing profitable versus non-profitable totals to find a
fair cutoff amount.
During discussion, Ms. Mann noted that DCU must discourage the
non-profitable, unreasonable use of its checking accounts. DCU cannot
allow the abuse of the system due to the overall negative effect it
creates. Mr. Cockburn noted that there is currently not enough incentive
for non-relationship members to expand their relationship with DCU when
they are already receiving a free checking account. After short
discussion, Ms. Ross asked that Mr. Cockburn be allowed to continue his
presentation. Mr. Cockburn proceeded.
Ms. Mann asked Mr. Gransewicz if he agreed that everyone should carry their
fair share at DCU. Mr. Gransewicz stated that some non-relationship
members abuse the system, however, some non-relationship members have low
incomes and, therefore, maintain low balances. Mr. Cockburn reiterated
DCU's first pricing strategy which states: Maintain competitive
loan/savings products and rates. He noted that checking accounts should be
no different from any other DCU product where pricing is concerned.
After short discussion, Ms. Mann again asked Mr. Gransewicz if he agreed
with DCU's cooperative, fair share ideal. Ms. Ross added that in a
cooperative, no one should "carry" anyone else and asked Mr. Gransewicz if
he agreed with this philosophy. Mr. Gransewicz stated that he cannot
decide who is a "good" member.
After short discussion, Ms. Kupferberg added that, from a personal
perspective, she felt that if the relationship members realized that they
are carrying the other 2/3 of DCU's members, most of them would take their
business to another institution. Ms. Ross asked that Mr. Cockburn be
allowed to review the actual recommendation. He reviewed the following
recommendations:
1. Relationship households are defined as:
Members in good standing that maintain $3,500 or more in total
household savings or maintain $3,500 or more in total household loans
or had a DCU mortgage loan sold to another institution.
2. Pricing incentives will be established for relationship households.
This will include waiving monthly checking account fees and annual credit
card fees.
Board of Directors' Meeting
April 27, 1993
Page - 9
3. DCU will establish a monthly checking account fee that may be waived
for the following:
a. relationship households
b. members age 18 or under
c. member age 62 or over
d. members who maintain a specified minimum balance during the month
4. Minimum balances for money market accounts and certificates of deposit
will be established based on competitive data.
5. Minimum balance, monthly fees and/or a limit to the number of "other"
share accounts will be established.
Mr. Cockburn also reviewed several overheads outlining the proposed pricing
structure. He noted the following:
- DCU's competition charges higher checking account fees than the proposed
amount.
- Management is proposing an Administration fee of $15 compared to the
current $10 fee for IRAs.
- The "other" share account recommendation has not changed since the
Planning Conference of 1992.
- DCU's checking account minimum balance requirement has been changed from
$300 to $500.
After short discussion, Mr. Gransewicz stated that target marketing was
needed to address abusers. Mr. Cockburn noted that new marketing
techniques will be implemented before the pricing changes are implemented.
Ms. Dawkins noted that, because of DCU's success in 1992, any fee change
announcement must be carefully thought out and executed.
Ms. Ross asked that a motion be made at this time, but discussion
continued. Mr. Kinzelman asked Mr. Gransewicz what the Board would have to
do to gain agreement on this proposal. Mr. Kinzelman suggested that
checking accounts be left out of the recommendation until the 1993 Planning
Conference so that other products may be voted on at this meeting. In the
meantime, Mr. Gransewicz could work with Ms. Etsell to try to devise better
ways to determine a pricing structure. Ms. Etsell noted that the experts
consulted recommend that pricing be done as a whole and not product by
product. Ms. Dawkins strongly felt that $300 was more appropriate than
$500 for the checking account minimum balance requirement. She also noted
that ATM pricing and travelers check pricing should be added as part of the
overall relationship proposal.
Board of Directors' Meeting
April 27, 1993
Page - 10
* It was moved by Ms. Mann and seconded by Mr. McEachin to approve the
Pricing Recommendation as submitted. (Five in favor; Ms. Ross, Ms.
Dawkins, Mr. Milbury, Ms. Mann and Mr. McEachin; two opposed; Mr.
Gransewicz and Mr. Kinzelman.) MOTION CARRIED.
Ms. Ross noted that this decision must be kept confidential and this
portion of the minutes be redacted until the marketing announcement in
July, 1993. This section of the minutes will be available, unredacted
after the announcement. Mr. Gransewicz felt that this should not be kept
confidential from the membership since the Annual Meeting would be taking
place within two days. Mr. Milbury noted that it would not be in the best
interest of the credit union to give out any pricing information before the
July announcement. Mr. Kinzelman noted that it would be in the credit
union's better interest to work with Ms. Etsell and then "say your peace"
after the announcement. Ms. Madden asked Mr. Gransewicz to consider the
DCU front-line staff before deciding upon any type of early release of this
information. The Board indicated that management needs to communicate to
the members the credit union's Capital Ratio goal. After short discussion,
Mr. Gransewicz presented a written, formal reply to this recommendation, on
his behalf.
Mr. Gransewicz's Comments regarding Pricing
Mr. Gransewicz's Comments regarding Pricing
Recommendations
Recommendations
As an elected director of Digital Employees' Federal Credit Union I believe
my first obligation is to represent the membership as a whole while
ensuring the assets of the credit union are protected. The membership of
DCU are its owners. Neither the Board nor DCU management own DCU. The
owners of this institution have entrusted it to us to make it the kind of
credit union they want.
Twenty-two months ago the owners of this credit union voiced their opinion
of fee-based checking accounts. Many members closed their accounts and
left DCU. Others simply shifted their business to other institutions while
maintaining their membership with DCU, in the hope that DCU would someday
be the credit union they wanted. The first agenda item of the Special
Meeting, held in November, 1991, was to rescind the checking account fees
imposed on the membership. It passed by an overwhelming majority of those
present. The membership spoke loud and clear. Why do we now wish to
consider this approach again? Have we learned nothing from the upheaval
that the last episode generated?
We are now presented a similar plan by DCU management based upon a
"consensus" of the Board at our November Planning Conference. I wish to
make it very clear that this "consensus" does NOT include my approval of
this approach. I do not wish to be associated with the move to implement a
fee structure that the membership has clearly rejected. For many reasons,
I believe it is not in the long term best interests of DCU to implement
these fees.
Board of Directors' Meeting
April 27, 1993
Page - 11
DCU management has presented us with facts and figures which purport to
show that 36% of the membership "are carrying" the other 64% of the
membership with regards to checking accounts. DCU wants members to
participate in what it calls "relationship banking". In order to receive
"free" services, a member is required to meet certain financial thresholds.
Even though a member may be using DCU as their sole financial institution,
if the "relationship" isn't sufficient (in the eyes of DCU) then fees are
imposed. We will have established different classes of DCU membership
based upon this "relationship" or lack of it. The problem with the
relationship concept is that it is a snapshot in time. It doesn't take
into consideration the changing financial positions of members. A small
saver or borrower today may be a valuable (and profitable) customer down
the road. But with fees on small savers or borrowers, will that future
business be with DCU or one of our competitors?
I believe "relationship banking" is micromanagement at its worst. It's a
very short-sighted, tunnel-view view of the bottom line. It is an attempt
to define who you want to do business with and penalize those that you feel
aren't doing sufficient business with you. Any business must develop and
nurture the relationship with its customer if it is to succeed. I view
this approach as using a stick to develop that relationship. A business
that offers good value for the dollar and delivers quality service will
have more "relationships" than it knows what to do with. You must treat
people like they are more than just totals on a monthly statement.
At the November Planning Conference, I proposed that before the
"relationship banking" approach was undertaken that DCU management identify
and target market to the "non-relationship" members. This large group of
members should be viewed as a vast pool of untapped business. Before
taking any action which may potentially drive these customers away, I
believe we must make an effort to gain their current financial business
with good savings and loan rates. Show them that DCU has improved and that
DCU wants their business. At a time of shrinking DCU membership due to
sponsor cutbacks, we cannot afford to lose members. To my knowledge, there
has been no such marketing program.
I must also make clear that DCU is NOT in need of the additional fee income
(317K-$376K) that this pricing would generate. We have just concluded our
most profitable year ever, nearly $5 million. Our capital ratio is
improving at a reasonable if not fast pace. I believe the implementation
of checking account fees under these conditions is unwarranted and
unnecessary.
Board of Directors' Meeting
April 27, 1993
Page - 12
But what approach should we take? I would like to suggest that DCU focus
it's energies on expanding the membership. Currently, DCU's members
represent only 50% of the total number of eligible people. When you take
into consideration that 63% of that 50% are "non-relationship" members, DCU
has a mere 19.5% of the market. A credit union with all the advantages of
DCU should be doing much better than this. We need to aggressively price
our products and make all members aware of them as well as the other
benefits of membership with DCU. I also believe that DCU must recognize
and address the fact that a large number of DCU members (and prospective
members) are not near branches. We need to develop unique approaches to
sell to and service these members. In other words, I believe DCU should
remain true to its origins as a credit union and build upon the proven
strengths of the membership as it exists today. Nobody is "carrying"
anybody because we all need each other to make DCU successful and in turn,
a credit union we can all appreciate.
After much discussion, the majority of the Board agreed it was necessary to
vote on the confidentiality of all information concerning this matter.
* It was moved by Ms. Mann and seconded by Mr. Milbury that all pricing
information, and conversation resulting from discussions thereof, remain
confidential until after the official marketing announcement in July, 1993.
(Six in favor; Ms. Ross, Ms. Dawkins, Mr. Milbury, Mr. Kinzelman, Mr.
McEachin and Ms. Mann; one opposed; Mr. Gransewicz. MOTION CARRIED.
VII. ADJOURNMENT
* It was moved by Mr. McEachin and seconded by Ms. Mann to adjourn the
meeting at 6:22 p.m. MOTION CARRIED UNANIMOUSLY.
_______________________________ _______________________________
Lisa DeMauro Ross, Paul M. Kinzelman,
Chairman Secretary
|
| 2.20 | BoD meeting, August 24, 1993, Discussion->729 | ASE003::GRANSEWICZ | | Thu Dec 09 1993 00:11 | 455 |
|
DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Board of Directors' Meeting
August 24, 1993
The meeting, held in the second floor training room of Digital Credit
Union's headquarters facility, PKO5 (141 Parker Street, Maynard, MA),
commenced at approximately 2:39 p.m.
GENERAL SESSION
Present: Tanya Dawkins, Treasurer
Phil Gransewicz, Secretary
Paul Kinzelman (via conference call)
Gail Mann
Tom McEachin, Vice Chairperson
Paul Milbury
Lisa DeMauro Ross, Chairperson
Also Present: Robert Ketz, Supervisory Committee Member
Staff: Chuck Cockburn, President/CEO
Karen Etsell, Vice President of Marketing
Mary Madden, Vice President of Operations
Betty Moran, Director of Finance
Allan Prindle, Vice President of Lending
Jim Regan, Internal Auditor
Karen Wall, Director of Human Resources
I. ROLL CALL AND DETERMINATION OF QUORUM
Ms. Ross noted the following amendments to the agenda:
1. X. RECOMMENDATIONS, d. Supervisory Committee Vacancy: This topic will
be tabled until next month to allow any possible candidates sufficient time
to submit resumes to the Board.
2. VI. PRESIDENT'S REPORT: addition of "b. Process for Member Letters"
3. X. RECOMMENDATIONS: addition of "f. Westminster Branch"
4. It was also noted that the review of minutes would take place following
the Recommendations portion of the meeting.
Board of Directors' Meeting
August 24, 1993
Page - 2
II. FINANCIAL REPORTS
July Financial Overview
Growth
Consumer loans grew $2.7 million in July. As shown on the graph on page
28, the annualized growth rate for consumer loans (20.3%) is almost twice
the pace that was projected for 1993. The main growth continues to be in
vehicle loans, which have increased by more than $13 million year to date.
The amount of real estate loans sold on the secondary market has already
surpassed the total amount that was budgeted for 1993. As shown on page
29, real estate loans in total (held in portfolio and sold) continue to
grow at an excellent rate, well above budget.
Savings dropped from June to July due mainly to June's balances having
included the quarterly dividend posting and weekly payroll deposits. Year
to date, certificates, IRA's, and checking accounts have seen the biggest
declines.
Loan Quality
Loan delinquencies and chargeoff's continue to be lower than 1992. These
two ratios are .43% and .36% respectively, well below the 1993 budgeted
figures of 1% and .64%. Collection efforts continue to be effective.
Profitability
July's net income was $385,805, which is $169,555 better than the amount
budgeted for this month. Net income for the year is $3.5 million, as
compared to a year to date budgeted amount of $2 million. However, the
majority of the favorable variance is due to the huge volume of refinancing
activity. The level of refinancing activity was budgeted to drop off
significantly from 1992, but continues to be high as interest rates have
continued to decline. The current level of income from this source cannot
be relied upon in DCU's future once interest rates have stabilized.
Capital
Our Capital Ratio, the best measure of a credit union's financial
soundness, is now over 6%. The growth in this ratio (from 4.82% at the end
of 1992) is a result of our controlled growth, excellent profitability, and
low loan losses. Our ratio is still low compared to the peer group's
figure of over 8%.
Board of Directors' Meeting
August 24, 1993
Page - 3
III. PRESIDENT'S REPORT
a. Delivery System Analysis and Introduction of Consultants
At 2:50 p.m., Mr. Cockburn introduced George Frerichs and Brian Reno, both
of GRFI Ltd, to the Board. GRFI is a firm that provides "Comprehensive
planning and consulting services for the financial, industrial, consumer
and health care industries". DCU is utilizing GRFI to analyze the credit
union's delivery systems in an attempt to make the most if its branch
sites. Mr. Cockburn explained that Rockwell FCU successfully utilized GRFI
in renovating existing branches, as well as moving to offsite facilities,
to better serve the membership.
Mr. Frerichs provided packages for the Board outlining GRFI's plan for
their analysis of DCU. Mr. Reno's presentation consisted of two floorplans
of one of DCU's branches. The first demonstrated the existing plan while
the second depicted a new, renovated version of the branch. Mr. Reno
reviewed both plans and explained the importance of utilizing the branch's
functionality potential to the fullest extent.
Mr. Gransewicz inquired as to the service ideas GRFI could suggest to DCU
for its remote members. Mr. Frerichs made note of several financial
institutions that have made use of totally automated branches. Mr.
Gransewicz then questioned GRFI's outlook on the issue of home banking.
Mr. Frerichs explained that product packaging is a major factor in the home
banking aspect of DCU.
Mr. Kinzelman inquired whether Rockwell FCU was similar to DCU. Mr.
Frerichs noted that DCU has many similarities to Rockwell's old situation.
Mr. Kinzelman then asked if Rockwell saw any disagreement with the new
concept from its membership. Mr. Cockburn explained that the utilization
of the "event" approach to the change posed no problems with the
membership. Mr. Frerichs noted that the new concept also provided the
members with a positive reason to make the change.
At 3:47 p.m., Mr. Frerichs and Mr. Reno ended their presentation and left
the meeting.
b. Process for Member Letters
Mr. Cockburn provided a handout of the latest member correspondences
received by DCU. He noted that any concerns or complaints received by the
Board should be forwarded to him for research purposes. Following this
process, the member will be contacted with a reply. He also explained that
a question and answer document is being planned to address possible pricing
concerns in a Board Memo.
Board of Directors' Meeting
August 24, 1993
Page - 4
IV. COMMITTEE REPORTS
a. Supervisory Committee
Robert Ketz, Supervisory Committee member, updated the Board on the status
of the Supervisory Committee. He noted that Betty Moran reviewed with them
the methods used to calculate the reserves for DCU, and they are satisfied
that the process put into place for calculating reserves is objective.
They also reviewed the Audit Plan set forth by Mr. Regan and they feel
comfortable that appropriate controls are being reviewed. They asked Mr.
Regan to investigate with DCU's external auditors, and among his peers at
other credit unions, if anyone had a definitive list of regulatory reports
that are required. Jim will investigate questions the committee had
regarding TAX reports as well as OSHA reporting requirements for the next
meeting.
The committee requested that Mr. Regan, on behalf of the Supervisory
Committee, contact O'Rourke & Clark and request an engagement letter
including a fee proposal. The committee also reviewed management's action
plans for issues identified within the management letter and are satisfied
with the progress being made by all levels of management on implementing
the recommendation. Mr. Regan assured the committee that all controls
being put into place are cost effective.
The Board requested that the Supervisory Committee Plan be included in the
next Board package.
b. Finance Committee
Ms. Dawkins noted that the committee did not meet since the last Board
meeting, but a meeting is scheduled for August 26, 1993. No formal report
was given.
c. Human Resource Committee
Mr. McEachin noted that the committee reviewed the following at their
meeting on Friday, August 13, 1993:
1. CEO Evaluation Criteria - discussed how survey results should factor
into the criteria
2. Utilization of O'Rourke & Clark for a salary recommendation
3. Reviewed Health Benefits Quality Team progress
4. Review of 401K Plan - Ms. Wall explained that Scudder will be the
investment plan provider, taking the place of CUNA Mutual
5. Reviewed several Exit Interview forms
Board of Directors' Meeting
August 24, 1993
Page - 5
d. Credit Appeals Committee
Mr. Prindle noted that the committee did not meet and had no formal report
for the Board.
V. UPDATES AND DISCUSSIONS
a. Truth in Savings
Ms. Madden reviewed the new Truth in Savings Act (TISA) regulation with the
Board. She also provided samples of the packets members will receive in
the September mailing. Included were: TISA Disclosure, two member letters
and a Schedule of Fees and Service Charges. She explained that TISA is a
new Federal Regulation governing deposit accounts (including CDs) offered
by a credit union. All credit unions must comply by June, 1994, however,
DCU is disclosing the regulation in September to give its members an
effective comparison tool regarding account information.
The regulation requirements are as follows:
All credit unions must make the following information
available to members before they open an account:
- schedule of fees and service charges
- other terms and conditions regarding accounts
- dividend rates and APY
- method of dividend calculation
In addition, all credit unions providing periodic
statements must include on those statements itemization
of fees, rate and APY information.
Finally, rules regarding advertisements are also
included in the regulation.
Mr. Cockburn noted that the Board should contact Ms. Madden with their
suggestions. Mr. Kinzelman requested that the words for the acronym "ACH"
be spelled out in the fee schedule. Ms. Ross inquired as to the dates of
the mailing. Mr. Cockburn explained that the member letters would be
mailed on September 10, 1993, and September 15, 1993.
b. Liaison Meeting
Mr. Cockburn noted that there was no liaison meeting and had no report for
the Board.
Board of Directors' Meeting
August 24, 1993
Page - 6
c. Benchmarking
Mr. Cockburn reviewed DCU's benchmarking approach with the Board. He
explained that DCU compares itself to many different credit unions based on
the topic being discussed. This allows management to compare a specific
aspect of DCU with credit unions that are leaders in that aspect.
VI RECOMMENDATIONS
a. Westminster Branch
Ms. Madden noted that DCU plans to close its Westminster branch and ATM as
it would not be cost effective to utilize them after Digital closes its
Westminster facility.
* It was moved by Ms. Dawkins and seconded by Ms. Mann to approve the
closing of the Westminster branch and ATM in mid-November. MOTION CARRIED
UNANIMOUSLY.
b. Executive Session
X
X
X
VII. UPDATES AND DISCUSSIONS (cont'd)
d. Credit Card Growth
Mr. Prindle reviewed several graphs outlining credit card growth at DCU.
He noted that the information showed a flat growth trend throughout the
year.
e. Real Estate Loans
Mr. Prindle provided a handout containing DCU Real Estate Loan information.
The information included the following:
1. Present Interest Rate Environment
2. Quarterly GAP Analysis Outline
3. Fixed Rate Mortgage Analysis
4. Market-to-Market Concerns
f. Collections Turnaround
Mr. Prindle introduced Brian Ducharme, DCU's Collections Manager, to the
Board. He presented several overheads measuring the quality of DCU's loan
portfolio. He also reviewed steps taken to improve the department overall.
The Board requested that information regarding industry trends in this
field be provided at a future Board meeting.
Board of Directors' Meeting
August 24, 1993
Page - 7
VIII. RECOMMENDATIONS (cont'd)
c. Deposit Account Loss Recovery Policy
Ms. Madden reviewed the proposed Deposit Account Loss Recovery Policy
resolution with the Board. It was noted that the resolution is standard
and has been approved by General Counsel. The policy will allow, in the
event that any credit union deposit account on which a member is an
individual or joint owner has a negative balance, the credit union may
transfer any amount necessary to bring the account to a 0.00 balance, from
any other credit union account (except IRA accounts) on which the member is
also an individual or joint owner. The credit union will provide the
member with written confirmation of any such transfer.
* It was moved by Ms. Mann and seconded by Mr. McEachin to approve the
proposed Deposit Account Loss Recovery Policy. MOTION CARRIED UNANIMOUSLY.
d. Credit Appeals Committee
Mr. Prindle reviewed a listing of the existing Credit Appeals Committee
members who wish to be re-appointed to another term. The list included:
- Pat Coyle
- Pat Gencarella
- Chris Gillett
- Jack Hutchinson
- Donna Nemensky
* It was moved by Ms. Mann and seconded by Mr. Milbury to re-appoint the
existing members of the Credit Appeals Committee to another term. MOTION
CARRIED UNANIMOUSLY.
e. Charge Offs
* It was moved by Ms. Mann and seconded by Mr. McEachin to approve the
charge offs for the month of August 1993. MOTION CARRIED UNANIMOUSLY.
f. Supervisory Committee Vacancy
Ms. Ross reminded the Board that this recommendation would be tabled until
the September Board meeting. She explained that the Board will review the
candidates' resumes before the September Board meeting and a conference
call will be held to determine the two or three candidates to be
interviewed.
At 4:55 p.m., the Board took a short dinner break. At 5:05 p.m., the Board
reconvened into Executive Session.
Board of Directors' Meeting
August 24, 1993
Page - 8
g. Bylaw Amendments and Policies
The Board reviewed the Bylaw Amendments recently approved by the NCUA.
Amendments to the following sections were approved by the NCUA:
Article V, Section 3 and Various Sections Throughout
Article V, Section 6
Article VI, Section 8 (c)(1)
Article VI, Section 8 (c)(6)
Article VI, Section 9
Article IX, Section 5
Article X, Section 1
Article XIX, Section 3
* It was moved by Mr. McEachin and seconded by Mr. Kinzelman to approve
the Bylaw Amendments recently approved by the NCUA. MOTION CARRIED
UNANIMOUSLY.
EXECUTIVE SESSION ATTORNEY CLIENT PRIVILEGE
X
X
X
Board of Directors' Meeting
August 24, 1993
Page - 9
GENERAL SESSION
IX. REVIEW OF MINUTES
The Board reviewed the July 8, 1993 and July 27, 1993 Board meeting
minutes. They noted the following changes to these minutes.
July 8, 1993: Include notations of GENERAL SESSION and EXECUTIVE SESSION.
July 27, 1993: Page 6, second paragraph: change the first sentence to
delete the quotation and to add: "the word "set" should be replaced with
the word "implement".
* It was moved by Mr. Gransewicz and seconded by Mr. McEachin to accept
the July 8, 1993, and July 27, 1993, Board meeting minutes. The
explanation of gainsharing and the vote taken for its implementation will
be included in General Session, but all discussion will be included in
Executive Session to be redacted when distributed to the membership. (Six
in favor: Ms. Dawkins, Mr. Kinzelman, Mr. Milbury, Ms. Mann, Mr. McEachin,
Ms. Ross; One opposed: Mr. Gransewicz) MOTION CARRIED.
* It was moved by Mr. Milbury and seconded by Mr. McEachin that future
minutes are to reflect only action and voting results. (Three in Favor:
Ms. Mann, Mr. Milbury and Ms. Ross; Three Opposed: Ms. Dawkins,
Mr. Gransewicz and Mr. Kinzelman; One Abstention: Mr. McEachin) MOTION
FAILED.
* It was moved by Ms. Dawkins and seconded by Mr. McEachin that future
minutes are to clearly state actions and votes, but disagreements and
comments will be limited to one or two sentences. (Five in Favor:
Ms. Dawkins, Ms. Mann, Mr. Milbury, Mr. McEachin and Ms. Ross; Two
Opposed: Mr. Kinzelman and Mr. Gransewicz) MOTION CARRIED.
X. ADJOURNMENT
* It was moved by Mr. McEachin and seconded by Ms. Dawkins to adjourn the
meeting at 6:55 p.m. MOTION CARRIED UNANIMOUSLY.
______________________________ ____________________________
Lisa DeMauro Ross Phil Gransewicz
Chairperson Secretary
|
| 2.21 | BoD meeting, September 28, 1993, Discussion->730 | ASE003::GRANSEWICZ | | Thu Dec 09 1993 00:12 | 323 |
|
DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Board of Directors' Meeting
September 28, 1993
The meeting, held in the Massachusetts conference room of Digital Equipment
Corporation's MSO facility (100 Powdermill Road, Maynard, MA), commenced at
approximately 2:30 p.m.
EXECUTIVE SESSION
Present: Tanya Dawkins, Treasurer
Phil Gransewicz, Secretary
Paul Kinzelman (via conference call)
Gail Mann
Tom McEachin, Vice Chairperson
Paul Milbury
Lisa DeMauro Ross, Chairperson
Staff: Stephanie Pomfret, Recording Secretary
I. ROLL CALL AND DETERMINATION OF QUORUM
Ms. Ross noted the following change to the agenda of the meeting:
- add, under UPDATES AND DISCUSSIONS: "b. Pricing Update"
II. SUPERVISORY COMMITTEE INTERVIEWS
Ms. Ross informed the Board that Jerry Shusterman had withdrawn his name
from the Supervisory Committee candidate list because of new time
constraints for his position at Digital. She noted the two remaining
candidates as Cyndi Bloom and Steve Sherman.
She then requested that the Board formulate a set of questions for the
interviews. Ms. Dawkins noted that each candidate will be asked the same
questions. The following questions were formulated:
1. Do you currently work for, with or supervise any current Board or
Supervisory Committee member?
2. Will you rely completely on data provided by DCU or will you collect and
review raw data independently?
3. What is your concept of the work involved with the position?
4. What qualifications do you have for the position?
Board of Directors' Meeting
September 28, 1993
Page - 2
5. What time commitment are you prepared to allocate for the position?
6. If suspected unethical behavior or wrongdoing was brought to your
attention, would you investigate each one?
7. What experience do you have in reading and interpreting financial
statements?
At 2:45 p.m., Ms. Bloom joined the meeting. Ms. Ross introduced Ms. Bloom
to the Board and the Board proceeded with their questions. After
completing the interview, Ms. Ross thanked her for attending and explained
that the Board would notify her of their decision within the next few days.
Ms. Bloom thanked the Board for the opportunity to interview for the
position, and left the meeting.
At 3:00 p.m., Steve Sherman joined the meeting. Ms. Ross introduced Mr.
Sherman to the Board and the Board proceeded with their questions. After
completing the interview, Ms. Ross explained that the Board would notify
him of their decision within the next few days. Mr. Sherman thanked the
Board for the opportunity to interview for the position and left the
meeting.
At 3:15 p.m., the Board took a short break. At 3:20 p.m., Ms. Ross
reconvened the meeting into General Session.
GENERAL SESSION
Present: Tanya Dawkins, Treasurer
Phil Gransewicz, Secretary
Paul Kinzelman (via conference call)
Gail Mann
Tom McEachin, Vice Chairperson
Paul Milbury
Lisa DeMauro Ross, Chairperson
Staff: Karen Etsell, Vice President of Marketing
Mary Madden, Vice President of Operations
Acting President/CEO
Betty Moran, Director of Finance
Stephanie Pomfret, Recording Secretary
Allan Prindle, Vice President of Lending
Jim Regan, Internal Auditor
Karen Wall, Director of Human Resources
Also Present: Jim Cardwell, Consultant
Fred Holland, Supervisory Committee Member
Board of Directors' Meeting
September 28, 1993
Page - 3
III. COMMITTEE REPORTS
b. Finance Committee
Ms. Dawkins noted that the committee met on August 29, 1993, and reviewed
the following information with Ms. Moran:
1. Peer Ratio Analysis
2. Liquidity - 6% GAP (liabilities reprice faster than
assets)
3. Investment Strategy - move further out on the curve to
the 1-2 year and 3-4 year category.
4. New Investments - 1 CMO in estimated 2 year range and 2
CDs (18 and 24 months) totaling
$5 million.
5. Duration of Investment Portfolio
6. Future Agenda Items
Mr. Gransewicz questioned how high DCU's loan to share ratio should be.
Mr. Prindle noted that currently, DCU's loan to share ratio is 63%. He
explained that 70% would be considered good, while 80% would be considered
outstanding. However, a loan to share ratio of 90% or more could present a
liquidity problem which would result in the borrowing of funds. Mr.
Kinzelman inquired whether DCU's ratio could be considerably higher than
63%. Ms. Ross requested that the Board discuss this topic at the Planning
Conference.
Ms. Ross formally introduced Jim Cardwell to the Board. She explained that
Mr. Cardwell will join the Planning Conference on Saturday, October 16,
1993, to facilitate a team session with the Board. Subsequent to the Board
meeting, it was decided by the Board that Mr. Cardwell would not attend the
Planning Conference and would instead hold the team session, at DCU
Headquarters, at a later date.
a. Supervisory Committee
Ms. Ross inquired whether the committee had any recommendation for the
Supervisory Committee vacancy. Mr. Holland explained that, due to the
September meeting being canceled, the committee had no formal report for
the Board and no recommendation for the vacancy.
c. Human Resource Committee
Ms. Ross noted that the committee did not meet and had no formal report for
the Board.
d. Credit Appeals Committee
Mr. Prindle confirmed that the committee did not meet and had no formal
report for the Board.
Board of Directors' Meeting
September 28, 1993
Page - 4
IV. UPDATES AND DISCUSSIONS
a. Pricing Update
Ms. Madden explained that DCU has been monitoring the pricing situation and
has been in contact with the staff on a daily basis regarding member
concerns. She has received copies of 19 letters addressed to the Board.
She and Ms. Ross agreed to compare information as Ms. Ross made note of
having more than 19. Ms. Madden further noted that DCU management has
received no letters regarding the pricing changes.
b. Audit Plan
Mr. Regan explained that a copy of DCU's six-month audit plan was included
in this month's Board package as requested by the Board. Mr. McEachin
questioned whether the audits would include investigating major expenses
and contracts. Mr. Regan explained that a financial portion is included
during the first six months of the year. This plan only shows the last six
months of 1993.
V. FINANCIALS
August Financial Overview
Growth
Consumer loans continue to grow at an annualized rate of 20.9%, almost
twice the pace that was projected for 1993. While the main growth
continues to be in vehicle loans, credit card loans also grew in August.
Another $9 million in real estate loans were sold on the secondary market
in August. The growth in total real estate loans (held in portfolio and
sold) continues to be at an excellent rate, well above budget.
Total savings dropped in August with checking, regular savings, and money
market accounts seeing the biggest declines.
Loan Quality
The loan delinquency and chargeoff ratios (.34% and .41%, respectively)
continue to remain low. These two measures of loan quality are still well
below the 1993 budgeted figures of 1% and .64%.
Board of Directors' Meeting
September 28, 1993
Page - 5
Profitability
August's net income of $459,581 is $115,031 better than the amount budgeted
for this month. Net income for the year is now almost $4 million, as
compared to a year to date budgeted amount of $2.4 million. The main
categories showing favorable budget variances are other income (mainly from
real estate loans sold on the secondary market), dividend expense, and
total operating expenses.
Capital
Our Gross Capital Ratio as of August is 6.29%, up from 4.82% at the end of
1992. We continue to build this important ratio through controlled growth,
excellent profitability, and low loan losses.
VI. RECOMMENDATIONS
a. Release of Deed (Colorado)
* It was moved by Ms. Mann and seconded by Mr. Milbury to approve the
resolution for the release of a deed of trust, in accordance with DCU's
Method of Release of a Deed of Trust, previously approved by the Board.
MOTION CARRIED UNANIMOUSLY.
b. Charge Offs
* It was moved by Mr. McEachin and seconded by Mr. Milbury to approve the
charge offs, for the month of September, 1993. MOTION CARRIED UNANIMOUSLY.
At 4:00 p.m., Ms. Ross thanked management for attending and dismissed them
from the meeting. She requested that only the Recording Secretary remain
in the room with the Board.
a. Minutes
Ms. Ross explained that Mr. Melchione, DCU's General Counsel, would be
joining the meeting via conference call later in this session. She also
noted that the August minutes will not be considered at this meeting, as
changes were not submitted prior to the Board package mailing. She
explained that the approval of the August minutes will take place at the
next Board of Directors' meeting. This procedure will apply whenever Board
members' changes are not submitted prior to the Board package mailing.
Board of Directors' Meeting
September 28, 1993
Page - 6
Mr. Kinzelman noted that this process would cause monthly delays in the
availability of minutes to the membership. Ms. Ross explained that Board
members must have any minutes changes taken care of before the Board
package mailing to avoid taking an extensive amount of time away from the
meeting to discuss the minutes. Mr. Gransewicz noted that the Board should
not put off the Review of Minutes until the following month. Ms. Mann
noted that she feels all changes should be submitted before the Board
package is mailed. This will substantially decrease the time spent on the
minutes at each meeting and will allow the Board to spend their time on
more pressing credit union matters. Ms. Ross noted that the August minutes
would be approved by conducting a phone vote the following week.
b. Supervisory Committee Vacancy
Ms. Ross asked the Board if any discussion was necessary before voting on
the Supervisory Committee candidates. The Board agreed that no discussion
was necessary and proceeded with the voting process:
Cyndi Bloom: Gail Mann, Lisa Ross, Paul Milbury
Steve Sherman: Phil Gransewicz, Tanya Dawkins, Tom McEachin,
Paul Kinzelman
Ms. Ross announced that Mr. Sherman would be the new Supervisory Committee
member and requested that letters be mailed to both candidates, informing
them of the outcome of the vote. Mr. Kinzelman requested that the Board
notify Ms. Bloom that they would re-consider her in the event of a future
opening on the committee.
EXECUTIVE SESSION - ATTORNEY CLIENT PRIVILEGE
X
X
X
Board of Directors' Meeting
September 28, 1993
Page - 7
X
X
X
Board of Directors' Meeting
September 28, 1993
Page - 8
V. ADJOURNMENT
* It was moved by Mr. McEachin and seconded by Mr. Milbury to adjourn the
meeting at 6:15 p.m. MOTION CARRIED UNANIMOUSLY.
_________________________________ _______________________________
Lisa DeMauro Ross Phil Gransewicz
Chairperson Secretary
|
| 2.22 | BoD meeting, October 28, 1993, Discussion->731 | ASE003::GRANSEWICZ | | Tue Dec 21 1993 12:22 | 409 |
|
DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Board of Directors' Meeting
October 28, 1993
The meeting, held in the Training Room of Digital Employees' Federal
Credit Union headquarters facility (141 Parker Street, Maynard, MA),
commenced at approximately 2:45 p.m.
GENERAL SESSION
Present: Tanya Dawkins, Treasurer
Phil Gransewicz, Secretary
Paul Kinzelman (via conference call)
Gail Mann
Tom McEachin, Vice Chairperson
Lisa DeMauro Ross, Chairperson
Staff: Chuck Cockburn, President/CEO
Karen Etsell, Vice President of Marketing
Kim Gates, Recording Secretary
Mary Madden, Vice President of Operations
Betty Moran, Director of Finance
Allan Prindle, Vice President of Lending
Jim Regan, Internal Auditor
Karen Wall, Director of Human Resources
I. ROLL CALL AND DETERMINATION OF QUORUM
Ms. Ross noted the following amendments to the agenda:
1. VI. UPDATES/DISCUSSIONS: addition of "f. Computer
Loan and VISA Promotion"
2. VIII. OLD BUSINESS: addition of "b. Tolling
Agreement"
3. IX. NEW BUSINESS: addition of "b. Christmas Dinner"
4. IX. NEW BUSINESS: addition of "c. Subsidiaries -
Expanding Field of Membership"
5. IX. NEW BUSINESS: addition of "d. Conference Update"
6. IX. NEW BUSINESS: addition of "e. VAXNOTES"
7. IX. NEW BUSINESS: addition of "f. November Board Date"
GENERAL SESSION
II. REVIEW OF MINUTES
The Board reviewed the August 24, 1993, and September 28, 1993, Board
meeting minutes. Ms. Ross noted that the Executive Session portion of
last month's minutes were sent only to the Board.
EXECUTIVE SESSION
X
X
X
GENERAL SESSION
* It was moved by Ms. Mann and seconded by Mr. McEachin to approve
the September 28, 1993, Board minutes as amended. MOTION CARRIED
UNANIMOUSLY.
It was agreed that both submissions, one by Ms. Ross and one by Mr.
Gransewicz would be withdrawn from the August 24, 1993, Board minutes.
Further review of the August minutes was tabled until later in the
meeting.
III. FINANCIALS
September Financial Overview
Growth
Consumer loans are continuing to grow at an annualized rate of 19.0%.
Within consumer loans, new auto loans again provided the strongest
growth while credit card loans also grew.
III. FINANCIALS (cont'd)
Nearly $12,000,000 in real estate loans were sold to the secondary
market, which is $7,000,000 over what was budgeted for this month.
This $12,000,000 strengthens the already large positive variance of
total real estate loans sold and held versus budget.
Total savings for the month grew by $9,000,000, with regular savings,
checking, and money market seeing the biggest gains. This growth can
be attributed to quarterly dividends being paid within the month and
the month ending on a day when deposits are at a high level. Year to
date, savings have declined at an annualized rate of -5.5% with
certificates experiencing the greatest decline.
Loan Quality
The loan delinquency and charge-off ratios remained low in September
at .34% and .39% respectively. Charge-offs actually declined from
August. These two ratios are well below the budgeted 1% for
delinquencies and .64% for charge-offs.
Profitability
Net income for the month reached $237,004 which is lower than the
amounts attained in previous months, however still surpassing the
budgeted amount of $187,834. Net income for the year has now topped
$4,000,000 reaching $4,200,000 which is $1,600,000 over budget year to
date. Other income and dividend expense continue to post large
positive variances over budget.
The main source of other income continues to come from the high volume
of mortgage refinancings. Since rates have declined further, the
number of refinancings has remained high. However, this volume cannot
continue forever; and therefore, the level of income from this source
cannot be relied upon in DCU's future.
Capital Ratio
DCU's capital ratio for the month declined from 6.29% in August to
6.25% in September. This decline is a result of asset growth. This
trend is not expected to continue.
At this time, Mr. Milbury joined the meeting.
EXECUTIVE SESSION
X
X
X
IV. PRESIDENT'S REPORT
X
X
X
GENERAL SESSION
Election
It was unanimously decided to use the same pictures as last year for
the Annual Report.
* It was moved by Ms. Mann and seconded by Mr. McEachin to have
O'Rourke & Clark Accountancy Corporation as the Teller of Election for
the 1994 Board of Directors' election. MOTION CARRIED UNANIMOUSLY.
IV. PRESIDENT'S REPORT
b. Communication of new pricing - an insert will be mailed in the
December statements reminding members of the fees being implemented
January 1, 1994, and how the fees can be waived. It was noted by Ms.
Madden that we will still call members who have questions regarding
the new structure.
c. Follow up to 1993 Planning Conference - all items have been broken
down by month and will be discussed at future Board meetings.
V. COMMITTEE REPORTS
a. Supervisory Committee
Mr. Regan, Internal Auditor, noted that the committee did not meet and
had no formal report for the Board.
b. Finance Committee
Ms. Dawkins noted that the committee did not meet and had no formal
report for the Board.
c. Human Resource Committee
Ms. Ross noted that the committee did not meet and had no formal
report for the Board.
d. Credit Appeals Committee
Mr. Prindle, Vice President of Lending, noted that the committee did
not meet and had no formal report for the Board. It was requested by
the Board that the Chairperson of the Credit Appeals Committee provide
them with an overview/update for the next Board meeting.
VI. UPDATES/DISCUSSIONS
a. Estimate of Ratios Assuming Normal Real Estate Volume
Ms. Moran noted that the figures are recalculated key ratios with some
changes to reflect the budgeted, rather than actual, real estate
figures. The information showed that, if income from loans sold on
the secondary market had not been so high this year, both the Capital
and Net Capital Ratio's would be 26 basis points lower while the Other
Income and Net Income Ratio's would be lower by 34 basis points.
b. Regulation D
Ms. Madden reviewed the flow chart and discussed the reserve
requirement based on account class. A transaction account is a
checking account, which has different requirements than
non-transaction accounts. Mr. Gransewicz questioned why we are
reclassifying accounts; and Ms. Madden stated that we are complying
with the federal regulations.
c. Strategic Plan
Mr. Cockburn informed the Board that the changes they requested to the
mission statement and strategies have been implemented. The Proposed
Pricing Strategies need to be reworded and will be presented at the
November Board meeting.
d. Savings Flows
Mr. Cockburn discussed a "Segmentation Matrix" presented at a Raddon
Strategic Marketing Seminar he had recently attended. This matrix
shows that different segments have different savings needs. Mr.
Cockburn provided research that shows DCU has 35% of its members
categorized as up-scale, compared to the normal population of 10%.
The research shows that up-scale members are twice as likely to move
funds from financial institutions into alternative investments such as
mutual funds, stocks and bonds. Based on this research, management
concluded that DCU's negative savings growth is due to the high
percentage of up-scale members.
e. Board Travel and Conference Expense
Ms. Moran, Director of Finance, reviewed the Officials Conference
Attendance Report. This report showed a total of $4,630.88 spent on
conference attendance, through September 30, 1993. Mr. McEachin
questioned if this information is made available to the membership.
Ms. Ross answered that this information is published in the Annual
Report.
VI. UPDATES/DISCUSSIONS (cont'd)
f. Marketing Promotions
Ms. Etsell, Vice President of Marketing, distributed a brochure on
DCU's Computer Loan Program. This promotion is for purchasing DEC
equipment at a rate of 7%. Employees have known of this promotion
through VAXNOTES. These brochures, including condensed application,
are now available in the branches.
A pre-approved VISA application will be mailed to qualified members on
November 5, 1993. This promotion is at a 9.9% rate guaranteed through
November 10, 1994. Ms. Dawkins questioned if she did not receive a
pre-approval in the mail, but called in for an application, would she
receive the 9.9% rate? Ms. Etsell answered that any application for a
Gold Card, would receive this rate if they met the credit
requirements. The purpose of this promotion is to generate new
accounts.
VII. RECOMMENDATIONS
a.
b. By-law Resolution #1
* It was moved by Mr. Kinzelman and seconded by Mr. Gransewicz that
item f. be changed to read: The member pays the Credit Union in
advance for incremental costs incurred by the Credit Union for copying
and mailing up to a maximum of $2,000. MOTION CARRIED UNANIMOUSLY.
Ms. Ross left the meeting at this time.
EXECUTIVE SESSION
c.
X
X
X
GENERAL SESSION
VII. RECOMMENDATIONS (cont'd)
d. Charge Offs
* It was moved by Mr. Milbury and seconded by Ms. Mann to approve the
charge offs, for the month of October, 1993. MOTION CARRIED
UNANIMOUSLY.
At 4:20 p.m., Ms. Ross called the meeting into EXECUTIVE SESSION.
EXECUTIVE SESSION
VIII. OLD BUSINESS
b.
At 4:25 p.m., Ms. Ross called the meeting into GENERAL SESSION.
GENERAL SESSION
IX. NEW BUSINESS
a. Member Correspondence
Ms. Ross updated the Board of the member calls she returned from
messages she received in the Notes File. She answered 13 calls, and
the majority of these calls dealt with: (1) members feeling the
decision was made 2 years ago at the special meeting; (2) whether or
not DCU offers competitive programs; and (3) is this change aimed at
increasing profits? Ms. Ross admits she did not change anyone's mind;
but at least there was communication.
A discussion followed as to whether or not to publish another Board
Memo regarding pricing. Mr. Kinzelman suggested if another Board Memo
was to be distributed, it should deal with the bylaws and litigation.
It was then suggested that Ms. Etsell produce a marketing piece that
would include information on the fee structure.
It was the consensus of the board that another Board Memo was not
needed; however, Mr. Kinzelman and Ms. Dawkins disagreed with this.
In addition, Mr. Kinzelman also felt the first mailing should not have
been sent, as it was also poorly written. It was noted that other
Board members did not support his position.
IX. NEW BUSINESS (cont'd)
f. Date for November's Board Meeting
It was agreed that November's Board Meeting will be held Tuesday,
November 30th, at 2:30 p.m.
c. Subsidiaries - Expanding Field of Membership
In order to allow employees who work for subsidiaries of DEC to become
members of DCU, a list of the subsidiaries needs to be sent to NCUA.
These employees can not be covered by another credit union, and the
request must be signed by Ms. Ross.
d. Conference Update
Ms. Ross recently attended a conference in Albuquerque, New Mexico.
While there, she had lunch with the DCU branch staff. Ms. Dawkins was
recently in Colorado on business, and had breakfast with the DCU
branch staff in Colorado Springs.
e. VAXNOTES
Mr. Cockburn informed the Board that the Credit Union received
authority from the Liaisons to read only the DCU VAXNOTES file. A
discussion followed regarding the fact that there is no indicator on
this file to inform DEC employees that non-DEC personnel can read the
file. It was then suggested that DCU not read the VAXNOTES file until
the Board has reached a decision regarding this situation.
* It was moved by Mr. Gransewicz and seconded by Mr> Milbury that DCU
not read the VAXNOTES file. (Five in favor: Ms. Mann, Mr. Milbury,
Mr. Gransewicz, Mr. Kinzelman and Ms. Ross; two opposed: Mr. McEachin
and Ms. Dawkins) MOTION CARRIED.
At 5:00 p.m., Mr. Kinzelman left the meeting.
b. Christmas Dinner
It was the consensus of the Board that DCU make the arrangements for
the dinner to be held after the Board Meeting on December 21, 1993.
Cardwell Meeting
Mr. Cockburn reminded the Board that there is a meeting with Jim
Cardwell scheduled for Friday, November 12, 1993, from 12:00 p.m.
until 4:00 p.m. to be held in the Training Room at PKO5.
X. REVIEW OF MINUTES
The August 24, 1993, minutes were reviewed. The following changes
have been made: delete the last two sentences on page 3, item b.
Delete the entire executive session on page 9 and the first three
paragraphs on page 10.
* It was moved by Ms. Mann and seconded by Mr. McEachin to approve
the August 24, 1993, Board minutes as amended. MOTION CARRIED
UNANIMOUSLY.
XI. ADJOURNMENT
It was moved by Mr. McEachin and seconded by Ms. Mann to adjourn the
meeting at 5:15 p.m. MOTION CARRIED UNANIMOUSLY.
Lisa DeMauro Ross Phil Gransewicz
Chairperson Secretary
|
| 2.23 | BoD meeting, November 30, 1993, Discussion->734 | ASE003::GRANSEWICZ | | Thu Jan 06 1994 21:55 | 451 |
|
DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Board of Directors Meeting
November 30, 1993
The meeting, held in the second floor training room of Digital Credit
Union's headquarters facility (141 Parker Street, Maynard, MA), commenced
at approximately 2:30 p.m.
GENERAL SESSION
Present: Tanya Dawkins, Treasurer (via conference call)
Phil Gransewicz, Secretary
Paul Kinzelman (via conference call)
Gail Mann
Tom McEachin, Vice Chairperson
Lisa DeMauro Ross, Chairperson
Also Present: Steve Sherman, Supervisory Committee Member
Staff: Chuck Cockburn, President/CEO
Stephanie Duggan, Recording Secretary
Karen Etsell, Vice President of Marketing
Mary Madden, Vice President of Operations
Betty Moran, Director of Finance
Allan Prindle, Vice President of Lending
Jim Regan, Internal Auditor
Absent: Paul Milbury
I. ROLL CALL AND DETERMINATION OF QUORUM
Ms. Ross asked the Board to decide whether to add the following item to the
RECOMMENDATIONS portion of the agenda or table the item until the next
Board meeting:
c. DCU VaxNotes Access
The Board agreed that the item should be added.
II. REVIEW OF MINUTES
The Board reviewed the October 28, 1993, Board meeting minutes, and made
the following changes:
- Page 6, Letter d, last sentence: replace "we can conclude" with
"management concluded"
- Page 7, Letter b: add "EXECUTIVE SESSION" after the last sentence
Board of Directors' Meeting
November 30, 1993
Page - 2
- Page 7, Letter c: add "GENERAL SESSION" after the last sentence
- Page 8, Letter a: delete the sentence after the first paragraph
* It was moved by Ms. Mann and seconded by Mr. McEachin to approve the
October 28, 1993, Board meeting minutes as amended. MOTION CARRIED
UNANIMOUSLY.
The Board reviewed the minutes of the November 3, 1993, Telephone Vote
regarding a VISA loan for Board member, XXXXXXX. The Board requested that
the minutes be considered EXECUTIVE SESSION and the vote be considered
GENERAL SESSION.
* It was moved by Mr. McEachin and seconded by Ms. Mann to approve the
November 3, 1993, Telephone Vote minutes as amended. MOTION CARRIED
UNANIMOUSLY.
III. FINANCIALS
October Financial Overview
Growth
Consumer loans continue to experience excellent growth. Credit card loans
provided the strongest growth, while new auto and unsecured loans also
grew. The current VISA promotion has been extremely successful. As of
this writing, $1.6 million has been added to credit card loans outstanding.
This promotion will not only boost loans outstanding immediately, but will
have a positive long-term impact.
In October, $11 million in real estate loans were sold on the secondary
market, which is $6 million over the amount budgeted for the month. Year
to date, the amount of total real estate loans sold is almost twice what
was budgeted for all of 1993.
Total savings for the month dropped by $7 million. There are two main
reasons for this: quarterly dividends were posted at the end of September,
and savings on a Friday (last business day of October) are lower than on a
Thursday (last day in September). Year to date, savings have declined at
an annualized rate of 7.4% with certificates experiencing the greatest
decline. Management noted that they believe that this trend continues to
be a reflection of savers moving to riskier, higher-yielding alternative
investments.
Board of Directors' Meeting
November 30, 1993
Page - 3
Loan Quality
The loan delinquency and charge-off ratio's remained low in October at .36%
and .40% respectively. These two ratio's are well below the budgeted 1%
for delinquency and .64% for charge-offs.
Profitability
Net income for the month was $476,177, surpassing the budgeted amount of
$394,220. Net income for the year is now $4.7 million, which is $1.7
million over budget year-to-date. Other income and dividend expense
continues to post large positive variances over budget.
Other income this year has come mainly from the large volume of mortgage
refinancings, which are sold on the secondary market. It was noted that
this trend won't continue much longer.
Capital Ratio
DCU's capital ratio grew to 6.39% in October, up from 4.82% in December,
1992. While the growth in capital continues to be strong, we are still
below our peers' average of 8.5%.
IV. PRESIDENT'S REPORT
Subsidiaries
Mr. Cockburn explained that management will be sending letters to Digital
subsidiaries inquiring whether their employees wish to become members of
DCU, and whether they are currently serviced by other credit unions.
Pending the results of this mailing, DCU will request NCUA approval to
include the subsidiaries in our field of membership. Mr. Gransewicz asked
whether management has acquired a list of subsidiaries, and if so, how many
employees does the list include. Mr. Cockburn explained that they are
finalizing a list with Ms. Mann. Ms. Mann noted that the number of
employees included would be small.
Pilot Program
Mr. Cockburn explained that management would like to choose two or three
branches to participate in the Pilot Program discussed at the Planning
Conference. Management is using the following factors to determine which
branches should be chosen:
1. Proximity
2. Branch Staffing
3. Site Stability
4. Location Potential (based on current flows)
5. Balance Between Massachusetts and New Hampshire
Board of Directors' Meeting
November 30, 1993
Page - 4
He informed the Board that, based on the above factors, the following
branches were chosen by management as possible participants in the program:
1. Powdermill Road Branch (MSO)
2. Merrimack Branch (MKO1)
3. Marlboro Branch (MRO1)
It was also noted that MRO1 would not be included if management decides to
include only two branches in the program. Ms. Dawkins asked about the
status of allowing all DCU branches to remain open during lunch hours. Mr.
Cockburn explained that management is now tracking the number of
transactions performed by each teller in 30-minute intervals. This will be
an important part of solving the staffing problems of certain branches,
which will enable them to remain open during lunch hours.
Marketing Survey
Mr. Cockburn explained that, every two years, a general marketing survey is
distributed to determine how the membership compares DCU to its
competitors. This year's survey will be distributed to a random sampling
of approximately 5,000 members. The Board will have the opportunity to
review and amend the survey questions prior to mailing.
Savings Flows
Mr. Cockburn distributed a handout regarding the savings flows information
presented at the last Board meeting. He noted that management concluded
that the topic should be a part of the annual survey, however, no further
action needs to be taken. He also noted that the exit survey (closed
account survey) would be performed separately from the marketing survey.
Ms. Dawkins disagreed with the conclusion. She felt that the Board should
try immediately to determine the cause of the savings flows. Mr. Cockburn
explained that survey results would not be available for the Annual Report,
however, management could perform a retroactive sample survey, which will
include current as well as past account information. The Board agreed.
EXECUTIVE SESSION
V.
X
X
X
X
Board of Directors' Meeting
November 30, 1993
Page - 5
X
X
X
X
At 4:10 p.m., Ms. Ross reconvened the meeting into General Session.
GENERAL SESSION
VI. COMMITTEE REPORTS
a. Supervisory Committee
Steve Sherman, Supervisory Committee Member, explained that the committee
held a meeting on November 5, 1993. The following information was
reviewed:
- O'Rourke & Clark chosen to audit DCU again this year
- employment security issues
- branch audit
- progress of audit plan
- management letter from O'Rourke & Clark (1992): concurred
that all issues on the action plan are complete.
Ms. Ross asked about the audit fee. Mr. Sherman explained that the fee
would remain the same, this year.
b. Finance Committee
Ms. Dawkins explained that the committee is scheduled to meet on December
16, 1993 to review preliminary budget assumptions for 1994.
c. Human Resource Committee
Ms. Ross noted that the committee held a meeting on November 4, 1993. She
reviewed the following items discussed:
- Policies finalization
- Employee survey comments: nothing significant was noted
- Personnel Issues
- Review of exit interview forms
- Resignation of Karen Wall, Human Resources Director
- Met with Mike Sacher, O'Rourke & Clark: reviewed total compensation and
salary data, and looked at CEO salary (DCU vs. industry). The committee is
formulating a proposal for the Board conference call meeting on December 9,
1993.
Board of Directors' Meeting
November 30, 1993
Page - 6
Ms. Ross also explained that Mr. McEachin attended the Liaison meeting, in
her place, on November 16, 1993. Mr. McEachin noted the following topics
of discussion:
- Financials
- Subsidiaries
- Planning Conference results
- Update on latest promotions
- Imaging proposal problems
- Update on annual election
- Branch update
- Litigation update
d. Credit Appeals Committee
Ms. Ross referred to the report in the Board package and explained that
this type of report would now be included, monthly, in the package.
VII. UPDATES AND DISCUSSIONS
a. Planning Conference Follow-Up
Mr. Cockburn reviewed the follow-up report in the Board package. The
following issues were discussed:
1. Turnover Ratio (1991 - 1993) - Mr. Kinzelman requested that management
provide the Board with Turnover Ratio figures for 1990.
2. Percentage of Alternative Investments Held at Banks
3. PFI/Relationship Status Analysis - Ms. Ross requested that management
provide the Board with the criteria DCU uses for target marketing
segments.
4. Pricing Strategy Recommendation - Mr. Cockburn noted that DCU's Mission
Statement, Value Statements, and Strategies will be made available to
the membership upon completion.
5. Current Mission and Value Statements - Three changes were made by the
Board:
a) Under Open Environment, first sentence: add "and members" after the
word "employees".
b) Under Empowerment, last sentence: add "and enforce" after the word
"set".
c) Under Communication, last sentence: management to reword the sentence
to reflect the members.
Board of Directors' Meeting
November 30, 1993
Page - 7
6. VISA Payment Methods
7. VISA/ACL Line Increases Flow Chart
* It was moved by Mr. Kinzelman and seconded by Ms. Mann to approve the
amendments made to the Mission and Value Statements. MOTION CARRIED
UNANIMOUSLY.
b. Branch ATM Update
Ms. Madden noted the following:
1. The Westminster branch was successfully closed on November 12, 1993.
The ATM was removed on November 15, 1993.
2. The New York Branch Manager has resigned. Management is looking for
another Branch Manager as well as analyzing staffing at the branch.
3. Management has decided to install a 24-hour, drive-up ATM at Digital's
Nashua facility (NQO)
Mr. Gransewicz asked how management decided to install the ATM in Nashua,
rather than in Spitbrook. Mr. Cockburn explained the following factors:
1. There is already a branch and ATM located in Spitbrook.
2. The sponsor has requested this location.
3. Members have requested credit union access at this
location.
4. Nashua is a central location between the Spitbrook and
Merrimack facilities.
c. Marketing Update
Ms Etsell noted the following:
1. DCU's VISA Promotion was extremely successful. There have been 989 new
cards issued, and $2 million in balance transfers have been made. The
response rate for this promotion was 7%, compared to a projected figure of
5%. Mr. Gransewicz requested that management provide the Board with the
criteria that DCU uses when pre-approving members for products.
2. DCU's Mortgage Promotion came to a close at the end of September. This
promotion brought in a total figure of $16,826,000, compared to the
projected figure of $15 million. There are still 153 loans left to close.
Board of Directors' Meeting
November 30, 1993
Page - 8
3. DCU's Home Equity Promotion fell far below the projected goals; only
nine loans were closed totaling almost $500,000.
4. A Fee Reminder Insert will be included in the December statements.
Copies of the insert were distributed to the Board.
VIII. RECOMMENDATIONS
a. Pension Trustees
* It was moved by Mr. McEachin and seconded by Ms. Mann to appoint Betty
Moran, Director of Finance, as a trustee of both the Defined Benefit Plan
and Defined Contribution Plan, as one of the previous trustees, Karen Wall,
Director of Human Resources, has resigned. MOTION CARRIED UNANIMOUSLY.
b. Board Meeting Calendar
The Board reviewed the proposed 1994 Board Meeting Calendar. It was
decided that Ms. Ross and Mr. Gransewicz would meet to discuss the
possibility of holding Board meetings at locations other than MSO2 and
PKO5.
c. Charge Offs
* It was moved by Ms. Mann and seconded by Mr. McEachin to approve the
charge offs, in the amount of $87,416.59, for the month of November, 1993.
MOTION CARRIED UNANIMOUSLY.
d. DCU VaxNotes Access
Ms. Ross noted that the Executive Committee held a meeting and discussed
this issue. The Board must decide which VaxNote privileges DCU should
have. Ms. Ross noted that VaxNotes was originally set up at DCU in
preparation for the September pricing changes, in an attempt to monitor
comments and questions for misinformation. Currently, DCU has the capacity
to read the file, but can only write replies with the consensus of the
Board.
* It was moved by Ms. Mann that DCU voluntarily refrain from utilizing
VaxNotes. There was no second for this motion.
* It was moved by Mr. Gransewicz and seconded by Ms. Mann that DCU's
VaxNotes account be closed. After discussion, Mr. Gransewicz retracted
this motion.
Board of Directors' Meeting
November 30, 1993
Page - 9
* It was moved by Ms. Dawkins and seconded by Ms. Mann that the
appropriate Digital personnel be directed to deactivate VaxNotes access at
DCU until a majority vote of the full Board instructs otherwise. (five in
favor: Ms. Dawkins, Mr. Gransewicz, Mr. Kinzelman, Ms. Mann and Ms. Ross;
one abstention: Mr. McEachin) MOTION CARRIED.
IX. ADJOURNMENT
* It was moved by Ms. Mann and seconded by Mr. McEachin to adjourn the
meeting at 5:15 p.m. MOTION CARRIED UNANIMOUSLY.
______________________________ _____________________________
Lisa DeMauro Ross Phil Gransewicz
Chairperson Secretary
|
| 2.24 | BoD meeting, December 21, 1993, Discussion->755 | ASE003::GRANSEWICZ | Candidate for DCU Director | Tue Feb 15 1994 13:48 | 351 |
|
DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Board Of Directors' Meeting
December 21, 1993
The meeting, held in the second floor training room of Digital Credit
Union's headquarters facility (141 Parker Street, Maynard, MA), commenced
at approximately 2:30 p.m.
Present: Tanya Dawkins, Treasurer (via conference call)
Phil Gransewicz, Secretary
Paul Kinzelman (via conference call)
Gail Mann
Tom McEachin, Vice Chairperson
Paul Milbury
Lisa DeMauro Ross, Chairperson
Also Present: Karen Kupferberg, Supervisory Committee Member
Staff: Chuck Cockburn, President/CEO
Stephanie Duggan, Recording Secretary
I. ROLL CALL AND DETERMINATION OF QUORUM
II. EXECUTIVE SESSION
X
X
X
X
X
X
X
X
At 2:52 p.m., Ms. Ross convened the meeting into General Session and the
Senior Managers joined the meeting.
GENERAL SESSION
Present: Tanya Dawkins, Treasurer (via conference call)
Phil Gransewicz, Secretary
Paul Kinzelman (via conference call)
Gail Mann
Tom McEachin, Vice Chairperson
Paul Milbury
Lisa DeMauro Ross, Chairperson
Also Present: Karen Kupferberg, Supervisory Committee Member
Staff: Chuck Cockburn, President/CEO
Stephanie Duggan, Recording Secretary
Mary Madden, Vice President of Operations
Betty Moran, Director of Finance
Allan Prindle, Vice President of Lending
Jim Regan, Internal Auditor
III. FINANCIALS
Ms. Dawkins reviewed the following report with the Board:
November Financial Overview
Growth
Consumer loans grew $3.1 million in November. The major source of growth
was credit card loans which jumped from an annualized growth rate of -4.2%
in October to 8.8% in November. This large increase can be attributed to
DCU's successful VISA promotion which has added $3.0 million to credit card
loans outstanding. New autos loans and unsecured loans are additional
consumer loans which are growing at a rate greater than budgeted.
In November, $14.6 million in real estate loans were sold on the secondary
market. This is $10.0 million over the budgeted amount. Total real estate
loans sold year to date is over twice what was budgeted for all of 1993.
Total savings for the month declined by $12.1 million. A large percentage
of this decrease may be a result of savings on a Tuesday (the last day of
November) being lower than on a Friday (last business day of October).
Year to date savings have declined at an annualized rate of 10.5%.
Management concluded that this trend continues to be a reflection of savers
moving to riskier, higher yielding alternative investments.
Loan Quality
The loan delinquency and charge-off ratios dropped lower in November to
.30% and .39% respectively. These two ratios are well below the budgeted
1% for delinquencies and .64% for charge-offs.
Profitability
Net income for November was $415,000 which surpassed the budgeted amount of
$408,646. Year to date net income has topped $5.0 million which is $1.7
million over budget. The high volume of real estate loans sold has
continued to boost other income, which along with lower than budgeted
dividend expense has contributed to DCU's profitability.
Capital Ratio
DCU's capital ratio grew to 6.71% in November, up from 4.82% in December
1992. While the growth in capital continues to be strong, we are still
below our peers' average which has grown to 9.2%.
IV. PRESIDENT'S REPORT
Mission, Values and Strategies
Mr. Cockburn reviewed the updated version of DCU's Mission Statement, Value
Statements and Strategies. Mr. Kinzelman requested the following amendment
to the strategies section:
Under DELIVERY SYSTEM STRATEGIES, 1e: add "for all
members" after the word "ATMs".
1994 Goals
Mr. Cockburn then reviewed DCU's 1994 goals as of December, 1993. Mr.
Kinzelman asked if a Quality of Communication goal could be added to the
list. Mr. Cockburn explained that he will consult with John Chidester, of
Member Trends, to determine how to incorporate a Quality of Communication
question in the annual survey, before a goal is added. Mr. Gransewicz
asked that the order of #2b: Address Employee Concerns, be reversed. Mr.
McEachin suggested that DCU might use focus groups to test its initiatives.
Ms. Dawkins requested that a savings growth goal be added to the list. Mr.
Cockburn added that DCU must attempt to increase relationships, rather than
drive the single-relationship members out of DCU. Mr. McEachin noted that
the steps to achieve this goal must be reflected in the goals listing. It
was agreed that a sixth goal be added for Savings Growth.
Marketing Survey
Mr. Cockburn explained that John Chidester is working on a draft of the
survey. The completed draft will be sent to the Board for review and
amendments before the January mailing. The survey results will be
available by the end of February.
V. COMMITTEE REPORTS
a. Supervisory Committee
Ms. Kupferberg noted that the committee held no meeting in December and had
no formal report for the Board. The committee is scheduled to meet again
sometime in January.
b. Finance Committee
Copies of the Finance Committee Meeting Summary were distributed to the
Board. Ms. Dawkins noted the following topics of review:
1. Third Quarter Financial Analysis
2. Current Investment Strategy
3. Income Simulation
4. Policies, Capital Expenditures, Budget Schedule
5. Rate & Growth Projections, November Highlights
c. Human Resource Committee
X
X
X
d. Credit Appeals Committee
Ms. Ross noted that the committee report was included in the Board package.
Mr. Kinzelman noted that the Credit Appeals Committee reports are a
positive affirmation of the Credit Scoring process.
e. Nominating Committee
Ms. Ross noted that Harold Pike has replaced Gerry Shusterman, as Mr.
Shusterman has resigned from the committee. Mr. Cockburn notified the
Board of the following selections made by the Nominating Committee for the
DCU 1994 Board of Directors' Election:
1. David J. Garrod
2. Christopher C. Fillmore-Gillett
3. Philip J. Gransewicz
4. Paul J. Milbury
5. Lisa M. DeMauro Ross
At 3:55 p.m., the Board took a five minute break. At 4:00 p.m., Ms. Ross
reconvened the meeting into General Session.
VI. UPDATES AND DISCUSSIONS
a. Branch Update
Ms. Madden reviewed a handout outlining DCU's Delivery System Strategy:
1. Current Branch Situation
2. Proposed Branch Profile
3. Two-Phase Program
4. Timing
5. Charts - Branch Transaction Volumes at Marlboro (MRO4)
Mr. Gransewicz requested that a survey question be devised regarding
24-hour ATM access and branch access after hours. Mr. Cockburn explained
that John Chidester would be consulted for porper wording of the questions
before they are added.
Ms. Madden also noted that the NQO ATM has been installed and will be up
and running by December 29, 1993.
b. ATM Network Fees
Mr. Cockburn reviewed management's report on ATM Network Fees. He noted
DCU's strategy should be to first, convince the members to use automation.
This step, and an effective sales environment, will drive the expense to
asset ratio down and enable DCU to build capital while still paying good
loan and savings rates. Mr. Kinzelman asked if there could be a waiving of
fees for those members who are not located near a DCU branch. Mr. Cockburn
explained that the strategy will take at least three years to complete, and
at that time, DCU can consider waiving Network fees for various segments of
the membership.
c. Savings Outflow
Mr. Cockburn reviewed the Change in Share Growth chart mailed to the Board
earlier in the week. This chart showed the changes in share growth of
DCU's peers.
d. Expense/Asset Analysis
Ms. Moran reviewed the Expense to Asset Ratios table, also found in the
Board mailing. It showed that DCU measured worse than its peers by 41%
basis points. Mr. Cockburn noted that this difference is mainly attributed
to the expense of DCU's large branch network.
e. Exam Follow-Up
Mr. Regan reviewed with the Board Management's Action Plan to address the
NCUA audit results. It was agreed that management has sufficiently
addressed all issues presented by the auditors.
f. Direct Mail Screening Criteria
As requested by the Board, Mr. Prindle reviewed the direct mail screening
criteria used by DCU in 1993. Mr. McEachin noted that this criteria
supports DCU's conclusions of using the MCIF System.
g. Update
X
X
X
h. New and Closed Account Report and Loan Report
Mr. Kinzelman requested that management perform an analysis of all
relationship members that have closed their accounts within the past six
months. Ms. Ross requested that the analysis also include the number of
relationship accounts that were closed as a result of the clean up effort.
VII. RECOMMENDATIONS
a. Investment and Asset Liability Funds
Ms. Moran explained that the current Investment and Asset/Liability Funds
Management Policies have not been changed from 1993. Management
recommended that the Board approve these policies for 1994 with no changes.
* It was moved by Mr. McEachin and seconded by Ms. Mann to approve DCU's
current Investment and Asset/Liability Funds Management Policies with no
changes. MOTION CARRIED UNANIMOUSLY.
b. Trustee for 401(K) Plan
Jim reviewed management's recommendation to appoint Scudder Trust Company
as trustee of Digital Employees' Federal Credit Union's 401(K) Deferred
Compensation Plan.
* It was moved by Ms. Mann and seconded by Mr. Milbury to appoint Scudder
Trust Company as trustee of Digital Employees' Federal Credit Union's
401(K) Deferred Compensation Plan. MOTION CARRIED UNANIMOUSLY.
c. Loan Policy
Mr. Prindle reviewed management's recommendation that DCU's Loan Policy be
updated by reducing the total obligation to one member from $5,000,000 to
$2,500,000. Mr. Kinzelman questioned what the NCUA's recommended figure
was. Mr. Cockburn explained that the NCUA only recommended that the figure
be lowered; no exact amount was given. It was noted that balloon loans are
limited to $1,000,000, and the Board must sign off on any loans over
$1,000,000.
* It was moved by Ms. Mann and seconded by Mr. McEachin to update DCU's
Loan Policy by reducing the total loans outstanding for one member from
$5,000,000 to $2,500,000. MOTION CARRIED UNANIMOUSLY.
d. Charge Offs
Mr. Prindle reviewed the Charge Off Report for the month of December, 1993.
Mr. Kinzelman requested that management report to the Board the total
number of delinquent student VISAs as compared to the total number of
student VISAs issued.
* It was moved by Mr. McEachin and seconded by Mr. Milbury to approve the
charge offs, in the amount of $60,792.37, for the month of December, 1993.
MOTION CARRIED UNANIMOUSLY.
VIII. NEW BUSINESS
Mr. Kinzelman requested that a Bonus Dividend or Interest Rate Refund
discussion be held at the next Board of Directors' meeting. It was noted
that the Board reached a consensus at the Strategic Planning Conference
against this approach. Ms. Ross requested that management include this
topic, as well as the information from the Planning Conference, as an
agenda item for the January Board meeting so that an official vote may be
taken.
IX. ADJOURNMENT
* It was moved by Mr. McEachin and seconded by Ms. Mann to adjourn the
meeting at 5:00 p.m. MOTION CARRIED UNANIMOUSLY.
________________________________ _____________________________
Lisa DeMauro Ross Phil Gransewicz
Chairperson Secretary
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DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Board of Directors' Meeting
January 25, 1994
The meeting, held in the second floor Training Room of DCU's Headquarters
facility, PKO5 (141 Parker Street, Maynard, MA), commenced at approximately
2:35 p.m.
Present: Tanya Dawkins, Treasurer
Phil Gransewicz, Secretary
Paul Kinzelman (via conference call)
Gail Mann
Tom McEachin, Vice Chairperson
Paul Milbury
Lisa DeMauro Ross, Chairperson
Also Present: Jim Cardwell, Cardwell Group
Staff: Chuck Cockburn, President/CEO
Stephanie Duggan, Recording Secretary
Mary Madden, Vice President of Operations
Betty Moran, Director of Finance
Allan Prindle, Vice President of Lending
Jim Regan, Internal Auditor
I. ROLL CALL AND DETERMINATION OF QUORUM
Ms. Ross explained that Mr. Cockburn would give the Board a litigation
update during the Executive Session portion of the meeting. Mr. Kinzelman
requested that all sentencing information should be given during General
Session. The Board agreed.
Ms. Ross also noted that the Accountability Mapping topic under the V.
PRESIDENT'S REPORT section of the agenda will be discussed under General
Session. In the future, this topic should be discussed under Executive
Session.
II. EXECUTIVE SESSION
Litigation Update
X
X
X
GENERAL SESSION
III. REVIEW OF MINUTES
The Board reviewed the December 21, 1993, Board meeting minutes. The
following change was noted:
- Page 7, c. Loan Policy: Replace "obligation" with "loans outstanding"
in the recommendation.
* It was moved by Mr. McEachin and seconded by Ms. Mann to approve the
December 21, 1993, Board meeting minutes, as amended. MOTION CARRIED
UNANIMOUSLY.
The Board reviewed the December 28, 1993, Executive Committee meeting
minutes. The following changes were noted:
- Roll Call should not be included under EXECUTIVE SESSION
- Reword the heading of section II.
- III. ADJOURNMENT: should not be included under EXECUTIVE
SESSION
* It was moved by Ms. Mann and seconded by Mr. Milbury to approve the
December 28, 1993, Executive Committee Meeting minutes, as amended. MOTION
CARRIED UNANIMOUSLY.
IV. FINANCIALS
Ms. Dawkins reviewed the December Financial Overview:
Growth
Consumer loans grew 20.9% in 1993, almost twice the budgeted amount of
11.1%. The three areas that accounted for the growth were new and used
vehicle loans and credit cards. Our very successful VISA promotion added
$4.5 million in transferred balances to credit card loans outstanding as
well as almost $12 million in credit lines.
In December, another $13.1 million in real estate loans were sold on the
secondary market. That brought the total amount of real estate loans sold
in 1993 to $139 million, more than twice what was budgeted.
Total savings for the month increased by $12.9 million, partially as a
result of posting quarterly dividends. In 1993, savings declined 5.9%.
Loan Quality
If not for one large mortgage loan, the delinquency ratio of .70% would
have been a low .32%. The charge-off ratio stayed low at .39%. These two
ratios ended the year well below the budgeted 1% for delinquencies and .64%
for charge offs.
Profitability
Net income for December was $179,000, which was slightly lower than the
budgeted amount of $187,501. Year-to-date net income was $5.3 million,
which is $1.7 million over budget. The high volume of real estate loans
sold has continued to boost other income, which, along with lower than
budgeted dividend expense, has contributed to DCU's profitability.
Capital Ratio
DCU's capital ratio grew to 6.54% in December, up from 4.82% in December,
1992. While the growth in capital continues to be strong, we are still
well below our peers' average, which has grown to 9.2%
V. PRESIDENT'S REPORT
Team Building Session
Ms. Ross introduced Jim Cardwell to the Board. She explained that Mr.
Cardwell, of Cardwell Group, is attending the Board meeting for
observational purposes and will review his notes with the Board at the Team
Building Session on Wednesday. Mr. Cardwell provided session information
packets for the Board.
Accountability Mapping
Mr. Cockburn reviewed his December, 1993, and January, 1994, Accountability
Maps. The following changes were made to the January, 1994, Map:
1. Under Overall Accountability of the Position and Authority Matrix
Guidelines - STRATEGIC PLANNING: before the word "set", add "participates
with the Board to establish and".
2. Under Priority Goals 2. Continue Quality Initiative, Add another
item to read "Improve Employee Response Rate to Survey".
3. Under Priority Goals, 3. Meet Loan Growth and Loan Quality Goals:
delete the third item.
4. Under Priority Goals, 4. Increase Usage of Non-Branch Delivery
Systems, first and second items: delete the numerical figures.
Mr. Kinzelman asked if Mr. Cockburn should have a goal for an increase in
membership. Mr. Cockburn explained that although membership expansion is
essential in long term planning, DCU must first complete the improvement of
its delivery systems as well as complete the training of the front-line
staff before it can become a primary goal. The Board agreed to table this
discussion until the next Board meeting. At that time, Mr. Cockburn will
present management's opinion on the addition of a membership goal to the
Map.
VI. COMMITTEE REPORTS
a. Supervisory Committee
Mr. Regan explained that the committee held no meeting in January and had
no formal report for the Board. The committee is scheduled to meet on
January 27, 1994.
b. Finance Committee
Ms. Dawkins explained that the committee had met twice during the month of
January. Preliminary budget assumptions were reviewed at the first meeting
and the actual budget was reviewed and amended at the second meeting.
c. Human Resource Committee
Ms. Ross explained that the committee reviewed the following topics at
their last meeting:
1. President/CEO Contract
2. Reorganization - Human Resource Director position has been eliminated
and management is currently conducting a search for a new Vice
President of Marketing.
3. Quality Gainsharing
4. Exit Interviews
d. Credit Appeals Committee
Ms. Ross noted that the committee held no meeting in January; however, the
committee's year-end report was included in the Board package.
At 3:45 p.m., the Board took a five minute break. At 3:50 p.m., Mr.
McEachin reconvened the meeting into General Session.
VII. UPDATES AND DISCUSSIONS
a. Consumer Loan Override Report
Mr. Prindle reviewed the Consumer Loan Override Report with the Board. He
explained that the Loan Policy states that the Board must receive this
report on a quarterly basis. Mr. McEachin asked if management reviews
these reports to assure that equal opportunity lending guidelines are met.
Mr. Prindle explained that Credit Scoring is non-discriminatory, as there
is no human factor in the decision-making process; however, override
decisions are subjective.
b. Student VISA and First Time Car Buyer
Mr. Prindle reviewed the Student VISA/First Time Car Buyer Loan Programs
Analysis. The report showed that, as of December 31, 1993, there were no
delinquencies in these loan categories. The program was introduced in
October, 1993.
c. EasCorp and US Central Ratings
Ms. Moran explained that, according to DCU's Investment Policy, management
must monitor the credit ratings of DCU's investment institutions. The most
recent data, included in the Board package, gave both institutions "A"
ratings, which are the highest.
d. Litigation Update
Mr. Cockburn noted that the Mangone sentencing has been moved to February
15, 1994, at 2:00 p.m.
e. Trends in Number of Accounts
Ms. Madden reviewed a handout, outlining membership totals for 1993 as well
as the breakdown of 1993 closed memberships. The data showed that the vast
majority of closed memberships, including most of the 7,660 accounts closed
in September, was due to long overdue operational clean-ups, escheat and
dormant accounts. It was noted that no account closures were made without
an attempt to contact the member to inform them of their option to remain
in the field of membership. A discussion took place regarding a member
correspondence received by Mr. Gransewicz. It was noted that all Board
members, with the exception of Mr. Gransewicz, understood that the Loss
Policy would be retroactively enforced. This correspondence took issue
with the recently imposed DCU Loss Policy. It was noted that this Loss
Policy had been passed unanimously by the Board.
f. Delivery Systems
Ms. Madden reviewed the Delivery Systems Assumptions and Facts listed in
the Board package.
g. Marketing Plan
The Board reviewed the 1994 Marketing Plan. Ms. Madden distributed copies
of the 1993/1994 Marketing Budget. She noted that the utilization of the
MCIF system for target marketing purposes was a major factor in the
successes of the 1993 Direct Mail Promotions. It was also noted that,
after consulting with Marketing Profiles Inc. (MPI), management concluded
that the direct mail budget could be reduced by an additional $50,000.
h. Marketing Survey
Mr. Cockburn explained that two of Mr. Kinzelman's requested changes were
incorporated into the survey; however, management did not reorder the
demographic questions, as John Chidester felt that doing this would not be
beneficial to the survey's response rate. Several other changes Mr.
Kinzelman requested were not included in the survey. Mr. Cockburn
explained that the survey would be mailed during the first week of
February, and the results would be available to the Board in the second
week of March.
At 4:45 p.m., the Board took a short dinner break. At 4:55 p.m., Ms. Ross
reconvened the meeting into General Session.
VIII. RECOMMENDATIONS
a. Board Meeting Calendar
Ms. Ross referenced the Board meeting calendar information included in the
Board package. She noted that the locations of the meetings must be
decided.
* It was moved by Mr. Gransewicz and seconded by Mr. McEachin to hold two
offsite Board meetings each year (in addition to the annual Strategic
Planning Conference), at sites where a DCU branch is located, and each will
be followed by an informal session with the membership from 5:00 p.m. to
6:00 p.m. All other meetings will alternate between the PKO5 facility and
the MSO2 facility. MOTION CARRIED UNANIMOUSLY.
It was decided that the two 1994, off-site meetings would be held at
Digital's MKO and MRO facilities.
b. Declaration of Dividends
Mr. Cockburn explained that the Federal Credit Union Act requires that the
Board vote, quarterly, to ratify DCU's dividend rates and payment of
dividends.
* It was moved by Ms. Mann and seconded by Ms. Dawkins that the Board
declare and authorize the payment of dividends, for the fourth quarter of
1993, in the total amount of $2,142,259.56, at the rates, terms and
conditions appertaining to each account, as well as ratify the dividend
rates as shown on the December 28, 1993, rate sheet. MOTION CARRIED
UNANIMOUSLY.
c. Loan Policy
Mr. Prindle explained the following recommended changes to DCU's Loan
Policy:
- DCU's practice of providing loan benefits to employees is addressed in
the Personnel Policies and Procedures Manual and should be similarly
addressed in the Loan Policy.
- DCU's practice of limiting unsecured loan exposure per member should be
addressed in the Loan Policy.
* It was moved by Mr. McEachin and seconded by Ms. Mann that the Board
approve the recommended changes to DCU's Loan Policy. MOTION CARRIED
UNANIMOUSLY.
d. Charge Offs
* It was moved by Ms. Dawkins and seconded by Mr. Milbury that the Board
approve the charge offs, in the amount of $70,894.67 for the month of
January, 1993. MOTION CARRIED UNANIMOUSLY.
e. Bonus Dividend
Mr. Kinzelman's Dividend Refund Proposal Ideas:
1. Come up with a measure of each member's profitability for DCU,
combining savings, checking, loans, etc.
2. The Board will designate an amount of money to be set aside for the
member dividends.
3. The money should be distributed as: the more profitable the member,
the more dividend money they should receive.
4. The member dividends might also be limited to relationship members
only.
It was noted that a bonus dividend is a Board-declared, special increased
dividend rate, normally given only to regular shares, while an interest
refund is a refund to all borrowers based on the amount of interest earned
each year. Mr. Cockburn reviewed management's issues with Mr. Kinzelman's
Dividend Refund Proposal, as presented at the October Strategic Planning
Conference. It was also noted that management feels a bonus dividend or
interest refund could not be equitably distributed and would jeopardize the
capital position of the credit union and therefore, management disagrees
with any proposed bonus dividend or interest refund. Mr. Kinzelman stated
that he feels it is essential that DCU give something back to the
membership after having such a record year, especially considering DCU
employee Gainsharing. Mr. Cockburn explained that the proposed budget
includes further increases in dividends and further reductions in loan
rates. He further noted that it is far better to reward the members by
paying better rates than to reward some members after the fact in the form
of a bonus dividend or interest refund.
Ms. Dawkins asked Mr. Kinzelman where he feels the funds for this proposal
should come from. Mr. Kinzelman explained that the funds would be
available by reducing capital. Mr. Cockburn noted that DCU has a
responsibility to increase its capital ratio, as stated in the credit
union's goals. Mr. Cockburn emphatically stated that it would be
irresponsible for any Board member to approve any bonus dividend or
interest refund to the membership at this time.
Mr. Gransewicz explained that a small bonus dividend will not threaten the
financial soundness of the credit union. He added that this act would
eliminate a lot of the negative impressions some members have about DCU.
Mr. Cockburn explained that Mr. Gransewicz is incorrect in stating that the
members have a negative opinion of DCU. DCU has improved in every category
of the member survey. He also added that a bonus dividend would equal a
small, insignificant amount of money for each member, but would
significantly reduce DCU's capital ratio.
Ms. Ross explained that, although some of DCU's net income success is due
to the confidence of the membership, a lot of it was do to very favorable
market conditions, which cannot be sustained. She added that DCU's mission
is to grow capital. Taking capital to provide the members with a bonus
dividend would contradict this mission. With a capital ratio that is
adequate, the members will receive more competitive rates, instead of
receiving small, insignificant bonuses now.
Ms. Mann noted that she feels DCU cannot afford any sort of bonus dividend,
given the state of the capital ratio. Mr. McEachin agreed that the capital
ratio was his deciding factor, and that the credit union needs to be
fiscally sound. He also added that the membership owns DCU capital and a
posting of special dividends is not the only means by which they can
benefit. Mr. Milbury agreed and added that a bonus dividend would simply
be an act of redistributing excess member capital back to the members. DCU
does not have any excess capital; however, when excess capital is
available, it must be distributed through programs and not bonus dividends
or refunds. He further noted that there is no fair way to distribute
funds.
Mr. Gransewicz noted that a smaller, slower build up of capital is the
suggestion at hand. Mr. Gransewicz asked that if voting for a bonus
dividend is irresponsible, then why isn't voting for DCU Gainsharing,
which is a reduction in capital, also irresponsible. Mr. Cockburn
explained that Gainsharing is a part of employee compensation as well as a
substitute for earlier incentive plans, and rewards employees for exceeding
budgeted goals. Part of DCU's success in 1993 is directly attributed to
Gainsharing. Mr. Kinzelman noted that part of DCU's success is due to the
members.
* It was moved by Mr. Kinzelman and seconded by Mr. Gransewicz to approve
a special dividend and interest rate refund based on DCU's 1993 earnings,
of which the details would be determined after the motion is approved.
(Two in favor: Mr. Kinzelman and Mr. Gransewicz; four opposed: Mr.
McEachin, Ms. Ross, Ms. Mann and Ms. Dawkins; and one abstention: Mr.
Milbury) MOTION FAILS.
It was noted Mr. Milbury stated that he abstained because he could not vote
for a proposal in the abstract and that no legal motion was before the
Board. Mr. Kinzelman requested that next month's agenda include a
recommendation to eliminate Gainsharing for DCU employees. It was noted
that the Board previously determined, by vote, that Mr. Cockburn has the
authority to set compensation for the employees of DCU. It was also noted
that Mr. Kinzelman agreed with this vote.
f. Budget
Ms. Moran introduced Tony Trzcinka, DCU's Financial Analyst, and noted that
he played a large role in completing the 1994 budget. The Board
congratulated Ms. Moran and Mr. Trzcinka for their outstanding efforts in
the preparation of this budget. Ms. Ross suggested that Ms. Dawkins give
her statement regarding the 1994 budget, as the Board had a full week to
review the budget before this meeting.
Ms. Dawkins explained that the Finance Committee thoroughly reviewed all
aspects of the budget during their last two meetings. She feels it is an
aggressive budget and reminded the Board that an additional $50,000 would
be cut out of the Marketing budget due to overestimated promotional costs.
She thanked Ms. Moran and Mr. Trzcinka for their fine efforts in this
project. Mr. Cockburn further noted that the Board is operating on a
higher level than ever at DCU and their participation in the committees is
outstanding.
* It was moved by Ms. Mann and seconded by Mr. McEachin to approve the
1994 budget. MOTION CARRIED UNANIMOUSLY.
g. Real Estate Resolution
Ms. Ross requested that this item be added to the agenda of this meeting.
The Board agreed.
Mr. Prindle explained that this resolution would authorize the appropriate
DCU employees to enter contracts with Countrywide Funding, as this company
will be utilized to sell DCU's jumbo loans. Unlike DCU's existing
investors, Countrywide will allow DCU to retain the servicing of these
loans, which will generate income for the credit union.
* It was moved by Ms. Dawkins and seconded by Mr. Gransewicz to authorize
the appropriate DCU employees to enter contracts with Countrywide Funding.
MOTION CARRIED UNANIMOUSLY.
IX. OLD BUSINESS
a. NCUA Letter
Ms. Ross made note of the NCUA letter, included in the Board package,
regarding the remaining proposed bylaw amendments. Mr. McEachin explained
that the NCUA suggests that the Board should include the remaining proposed
amendments as credit union policies, rather than including them in the
bylaws. Ms. Dawkins and Mr. McEachin agreed that the Board should seek
advice from General Counsel on this matter. Ms. Ross requested that
General Counsel give a legal update at the next Board meeting.
b. Board Memo
Mr. Kinzelman requested that the Board send out a Board Memo, after the
next Board meeting, regarding the litigation status.
XI. ADJOURNMENT
* It was moved by Ms. Dawkins and seconded by Mr. McEachin to adjourn the
meeting at 5:56 p.m. MOTION CARRIED UNANIMOUSLY.
_________________________________ ____________________________________
Lisa M. DeMauro Ross Philip J. Gransewicz
Chairperson Secretary
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| 2.26 | BoD meeting, January 27, 1994, Discussion->766 | ASE003::GRANSEWICZ | Candidate for DCU Director | Mon Mar 07 1994 11:47 | 39 |
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DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Board of Directors' Telephone Vote
January 27, 1994
GENERAL SESSION
A Board of Directors' Telephone Vote was conducted for the following
recommendation:
* Chairperson, Lisa DeMauro Ross, recommends that the Board of Directors
approve the re-opening of DCU's "read only" VaxNotes account, due to the
posting of misinformation and confidential information by Mr. Gransewicz,
to enable management to review VaxNote postings. MOTION CARRIED.
Board Member Vote
Lisa DeMauro Ross In favor
Paul Milbury In favor
Phil Gransewicz Opposed
Tom McEachin In favor
Tanya Dawkins In favor
Gail Mann In favor
Paul Kinzelman Opposed
______________________________ ________________________________
Lisa M. DeMauro Ross Philip J. Gransewicz
Chairperson Secretary
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| 2.27 | Executive Comm. meeting, February 3, 1994, Discussion->767 | ASE003::GRANSEWICZ | Candidate for DCU Director | Mon Mar 07 1994 11:51 | 176 |
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DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Executive Committee Meeting
February 3, 1994
The meeting, held in the second floor Training Room of Digital Credit
Union's headquarters facility, PKO5 (141 Parker Street, Maynard, MA),
commenced at approximately 6:10 p.m.
Present: Tanya Dawkins, Treasurer
Phil Gransewicz, Secretary
Tom McEachin, Vice Chairperson
Lisa DeMauro Ross, Chairperson
Staff: Stephanie Duggan, Recording Secretary
I. AGENDA
Ms. Ross noted the following agenda items to be addressed at this meeting:
a. Facilitator Session
b. VaxNotes Postings by Mr. Gransewicz
c. Member Communication Ideas
II. FACILITATOR SESSION
Ms. Dawkins asked Mr. Gransewicz why he did not attend the Facilitator
Session on January 26, 1994. She explained that it was very frustrating to
the rest of the Board when they were told that Mr. Gransewicz had decided
not to attend the meeting. She added that the purpose of the meeting was
to help all Board members work better together as a Board.
Mr. Gransewicz explained that he was very busy at work and could not attend
the meeting. He noted that holding meetings for critical and urgent issues
is important; however, the Facilitator Session only served to explain
things that all Board members are already aware of. He added that his and
Mr. Kinzelman's expectations are different from the rest of the Board. He
feels the Board's problems are not those of facilitation, but those of
fundamental approach; such as attempting to limit Board meetings to a
specific time slot and scheduling phone meetings to discuss topics that
could easily be discussed at an upcoming Board meeting, namely Mr.
Cockburn's contract.
Ms. Ross explained that the Board had informed Mr. Cockburn that an
expectation was set to have his contract signed by January 1, 1994;
therefore, a phone meeting was necessary to finalize the contract before
the deadline. Mr. Gransewicz explained that he was never informed of the
January 1 deadline expectation and further noted that he felt the
Facilitator Session would not have been productive. He feels the Board has
no problems conducting business during regularly scheduled meetings;
however, it is unrealistic for the rest of the Board members to expect
total Board unanimity on every topic discussed.
Executive Committee Meeting
February 3, 1994
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Mr. McEachin explained that the deadline expectation was documented in the
Board minutes. He also felt that Mr. Gransewicz could have used the
meeting to express new ideas and opinions. Ms. Dawkins added that it was
inappropriate for Mr. Gransewicz to wait until the other Board members were
on their way to the session before informing them that he was not planning
to attend.
Mr. Gransewicz explained that he and Board Member, Paul Kinzelman, share
similar opinions to given topics and felt that he would not have added more
than what Mr. Kinzelman contributed to the meeting. Mr. McEachin noted
that Mr. Gransewicz and Mr. Kinzelman obviously do not share similar
approaches, as Mr. Kinzelman was in attendance and Mr. Gransewicz was not.
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February 3, 1994
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February 3, 1994
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February 3, 1994
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IV. MEMBER COMMUNICATION IDEAS
Ms. Ross informed the committee of a note she received from Mr. Kinzelman.
He suggested that the Board and management should do more to go out and
meet the membership. Mr. McEachin suggested that Mr. Cockburn utilize the
concept of focus groups. Mr. Gransewicz asked what the purpose of these
groups would be. Mr. McEachin explained that the Board and management
could hold focus groups approximately every two weeks to gather member
information by discussing any topics that the group of members chooses to
address. Ms. Ross suggested that perhaps the DCU staff could invite
members with formal invitations at the branches. Mr. McEachin noted that
members who are willing to vocalize their ideas and opinions are the ideal
candidates for this type of session. The committee agreed to pursue this
topic with the full Board.
V. ADJOURNMENT
The committee agreed to adjourn the meeting at 7:00 p.m.
________________________________ _________________________________
Lisa M. DeMauro Ross Philip J. Gransewicz
Chairperson Secretary
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| 2.28 | BoD meeting, February 11, 1994, Discussion->768 | ASE003::GRANSEWICZ | Candidate for DCU Director | Mon Mar 07 1994 11:51 | 32 |
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DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Board of Directors' Telephone Vote
February 11, 1994
GENERAL SESSION
A Board of Directors' telephone vote was conducted for the following
motion, moved by Mr. Gransewicz and seconded by Ms. Ross:
* It is recommended that the $5.00 Holiday Club Closing Fee be waived
through the end of March, 1994 and, that DCU Management be given the
authority to write a VaxNote to that effect to be posted by Mr. Gransewicz.
MOTION CARRIED UNANIMOUSLY.
________________________________ ________________________________
Lisa M. DeMauro Ross Philip J. Gransewicz
Chairperson Secretary
|
| 2.29 | BoD meeting, February 22, 1994, Discussion->807 | ASE003::GRANSEWICZ | DCU Election: 3 G's -> NO FEES | Tue Apr 05 1994 12:15 | 530 |
|
DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Board of Directors' Meeting
February 22, 1994
The meeting, held in the Maine Conference Room of Digital Equipment
Corporation's MSO facility (100 Powdermill Road, Maynard, MA), commenced at
approximately 2:40 p.m.
GENERAL SESSION
Present: Tanya Dawkins, Treasurer
Phil Gransewicz, Secretary
Paul Kinzelman (via conference call)
Tom McEachin, Vice Chairperson
Paul Milbury (via conference call)
Lisa DeMauro Ross, Chairperson
Staff: Stephanie Duggan, Recording Secretary
Absent: Gail Mann
I. ROLL CALL AND DETERMINATION OF QUORUM
The following changes to the agenda were agreed upon by the Board:
a. President's Report - add c. Membership Trends
b. Recommendations - add d. Board Memo
f. Gainsharing
II. EXECUTIVE SESSION
Joe Melchione, DCU General Counsel, joined the meeting via conference call
at this time.
EXECUTIVE SESSION - ATTORNEY/CLIENT PRIVILEGE
X
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X
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X
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X
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END ATTORNEY-CLIENT PRIVILEGE
END EXECUTIVE SESSION
GENERAL SESSION
Present: Tanya Dawkins, Treasurer
Phil Gransewicz, Secretary
Paul Kinzelman (via conference call)
Tom McEachin, Vice Chairperson
Lisa DeMauro Ross, Chairperson
Also Present: Steve Sherman, Supervisory Committee Member
Staff: Chuck Cockburn, President/CEO
Stephanie Duggan, Recording Secretary
Mary Madden, Vice President of Operations
Betty Moran, Director of Finance
Allan Prindle, Vice President of Lending
Jim Regan, Internal Auditor
OD/Returned Items Quality Team Members
Absent: Gail Mann
Paul Milbury
IV. PRESIDENT'S REPORT
b. Quality Update
Mr. Cockburn explained that 20 team projects have been completed in DCU's
Quality Program to date. He reviewed the following list of quality team
members: Team Leaders, Team Members, Facilitators and Sponsors. He then
reviewed the following components of a quality team mandate: problem,
scope, members, background, barriers and data. He explained that the
Steering Committee must approve a mandate before the team can proceed with
their project. Every two months, a team will present their completed
project to the Board.
Mr. Cockburn introduced Tom Ryan, Operations Manager, to the Board. Mr.
Ryan is the team leader of the NSF/Returned Items Team. He introduced the
other members of his team:
- Katie Barber, Member Service Department
- Dawn Garrigan, EFT Department
- Jane Marrama, EFT Department
- Lynn Poirier, Member Service Department
- Julie Moran, Member Service Department
- Don Basque, Collections Department
- Brian Ducharme, Collections Department
- Donna Russo, Human Resources Department (facilitator).
The efforts of this team resulted in a streamlined return process for
checks drawn on DCU funds, a streamlined return process for deposited
items, the establishment of overdraft criteria, the implementation of a
check verification service and the establishment of an overdraft process.
The team will continue to measure the processes to ensure that they remain
streamlined in the future as well as consult Annual Survey and Closed
Account Survey results to ensure member satisfaction. The Board thanked
Mr. Ryan for his presentation and the team members left the meeting.
a. Accountability Mapping
Mr. Cockburn noted that his Accountability Map was included in the Board
package as reference material for the Board. This version of the map
includes the final changes approved at the last Board meeting.
c. Membership Trends
Mr. Cockburn provided handouts for the Board concerning closed membership
analysis information for January, 1994. Mr. Cockburn presented an analysis
of the closed accounts which showed that 55% of the accounts had total
deposits in the credit union of less than $100 and only 24% of the accounts
had a loan. Also, more than 3/4 of the accounts had total deposits of $500
or less. Non-relationship accounts represent 84.6% of the account
closures, but only 1/3 of total deposits.
Mr. McEachin asked if Management knows why these members left. Mr.
Cockburn indicated that DCU attempted to contact the members with the
largest account closures and only a few were reached. One member moved to
Florida, one was deceased, two have moved and have new telephone numbers
and one had moved his funds into a Sigma Account.
V. COMMITTEE REPORTS
a. Supervisory Committee
Steve Sherman, Supervisory Committee Member, submitted the following
written report on behalf of the committee:
"Since the meeting of the Directors, the Supervisory Committee has met
twice. The Committee met on January 27 to conduct business of a general
nature. Then, the Committee met on February 4 to confer with auditors and
to conduct other business. Our next meeting is scheduled for March 17.
During the meeting on January 27, the Committee:
- approved the minutes for the November 4th meeting of the Committee
- reviewed the 1994 agenda for the Committee
- reviewed DCU's year-end fiscal statements
- reviewed the proposed Annual Supervisory Committee Report
- reviewed the NCUA Examination Report and discussed Management's Action
Plan
- reviewed the Internal Audit Plan for 1994
- followed up on investigations
- reviewed a Consumer Loan Audit report
- reviewed significant personnel changes
- met in Executive Session
Mr. Sherman indicated that the committee discussed DCU's capital ratio and
most credit unions are striving to reach a 10% - 12% level. DCU is far
below its peer group and needs to continue to build capital. In addition
to normal capital needs, DCU has exposure because credit union's extensive
number of branches are located on Digital properties.
During the meeting on February 4, the Committee met with Mike Sacher and
Wade Painter of O'Rourke & Clark Accountancy Corporation and discussed:
- the current findings and progress of this year's audit of the fiscal year
ending December 31, 1992
- SFAS 115, which will lead to some accounting changes within the next year
- the accounting firm's considerations of DCU's capital ratio
- the accounting firm's participation in DCU's upcoming election
- audit fees
- DCU expenses with respect to peers
Overall, the Supervisory Committee seemed satisfied with the responses from
O'Rourke & Clark Accountancy Corporation. The final draft of the current
audit should be complete very soon if not already."
Mr. Sherman commended Steve Behrens for his performance as Chairperson of
the Supervisory Committee. The Board thanked Mr. Sherman for his report
and patience during this meeting. Mr. Sherman left the meeting at this
time.
Mr. Gransewicz requested that the Review of Minutes take place at the end
of the meeting. The Board agreed.
VI. FINANCIALS
January Financial Overview
Growth
Consumer loans outstanding declined $1.7 million in January with credit
card balances showing the biggest drop ($1 million). The decline in credit
card balances is due to seasonal variance and is expected.
Almost $9.5 million in real estate loans were sold on the secondary market.
This was $3 million more than budget for January as the volume of real
estate loans granted continues to be high.
Total savings for the month declined $8 million. The reason for the
decline was due partly to an inflated year-end savings balance due to the
year ending on a payday and quarterly dividends being paid.
Loan Quality
The delinquency ratio is .71% including on large mortgage loan more than 2
months delinquent. This ratio would otherwise be a low .32%.
The charge-off ratio dropped to .37% in January well below the .60%
budgeted for 1994.
Profitability
Net income for this first month of the year was a strong $484,573 which was
$83,697 over budget. While loan income was less than expected because loan
volume was less than budgeted, dividend expense was favorable to budget
because savings balances were lower.
Total operating expenses also showed a favorable variance of almost
$61,000, and other income - mostly from real estate loans sold - continues
to be high.
Capital Ratio
The capital ratio increased to 6.82%. This growth in capital continues to
reflect our commitment toward ensuring the safety and soundness of DCU.
Ms. Dawkins noted that the Income and Expense Statement included in the
Board package was incorrect. She provided a handout which included the
correct information. Mr. McEachin asked if Management could use another
benchmark to measure portfolio performance. Ms. Ross asked that the
Finance Committee include this topic as an agenda item for their next
meeting. Ms. Dawkins also noted corrections in the charts on pages 39 and
34.
VIII. COMMITTEE REPORTS (CONT'D)
b. Finance Committee
Ms. Dawkins explained that the committee held no meeting in February and
had no report for the Board.
c. Human Resource Committee
Ms. Ross explained that the committee had finalized the President/CEO
Contract, previously discussed during Executive Session at this meeting.
d. Credit Appeals Committee
It was noted that the committee held no meeting in February and had no
formal report for the Board.
IX. UPDATES AND DISCUSSIONS (CONT'D)
b. Officials Travel and Conference
Ms. Moran reviewed the Officials Travel and Conference Report for 1993.
This report will be made available to the membership through the Annual
Report.
b. Marketing
Ms. Madden gave the following updates:
1. Direct Mail Promotions
a) Mortgage Promotion (3/9/94 - 5/31/94) - includes offers for first-time
home buyers as well as offers for refinances and new purchases. Coupons
will be attached offering a $100 reduction for closing costs and a $100
reduction for closing costs for family members and friends (DCU members).
b) IPI Auto Sale (3/24/94 - 3/26/94) - includes pre-approvals and
invitations to apply for auto loans. All refinance offerings will be
pre-approved.
2. ROI information will be presented at the next Board meeting.
3. Cardwell Group is currently conducting a Marketing Director search for
DCU.
f. NCUA Action Plan
Mr. Regan noted that all items of the plan have been completed with the
exception of the Share Policy which will be presented to the Board for
review next month.
X. RECOMMENDATIONS
a. Real Estate Resolution
Mr. Prindle noted that Management recommends that the Board approve the
resolution for the release of a deed of trust included in the Board
package. He explained that this resolution is in accordance with DCU's
Method of Release of a Deed of Trust, previously approved by the Board, to
be followed in instances where the promissory note is lost or destroyed.
* It was moved by Mr. McEachin and seconded by Ms. Dawkins to approve the
resolution for the release of a deed of trust in accordance with DCU's
Method of Release of a Deed of Trust. MOTION CARRIED UNANIMOUSLY.
b. Charge Offs
X
X
X
* It was moved by Ms. Dawkins and seconded by Mr. McEachin to approve the
Charge Offs, in the amount of $419,372.76, for the month of February, 1994.
MOTION CARRIED UNANIMOUSLY.
c. Board Meeting Calendar
The Board approved the 1994 Board Meeting Calendar included in the Board
package.
d. Board Memo
The Board reviewed the proposed Board Memo. Mr. Cockburn noted that
Management changed the first paragraph. Mr. Kinzelman requested that a
paragraph be added to the Membership Trends section of the memo to explain
the reasons for the 400 accounts in the "other" category.
Mr. McEachin made a motion to adopt and publish the Board Memo as amended
by Management. Ms. Dawkins seconded the motion. Discussion continued.
Ms. Dawkins called the question in an attempt to end discussion on this
topic. A vote was taken to end discussion (three in favor: Ms. Dawkins,
Mr. McEachin and Ms. Ross; two opposed: Mr. Kinzelman and Mr. Gransewicz).
As a two thirds vote is needed to end discussion of a given topic,
discussion continued.
Mr. Gransewicz felt that the Bonus Dividend section of the memo was
irrelevant as the minutes of the meeting will be posted. Mr. Kinzelman
thought that this information made up two separate Board memos - one for
Membership Trends and one for Bonus Dividends. Mr. McEachin, Ms. Dawkins
and Ms. Ross agreed that both topics should be included together in one
Board Memo.
Mr. Kinzelman and Mr. Gransewicz reviewed their requested changes that were
not included in the memo at this time.
* It was moved by Mr. Gransewicz and seconded by Mr. Kinzelman to include
all of Mr. Kinzelman's and Mr. Gransewicz's changes in the Board Memo.
(Two in favor: Mr. Kinzelman and Mr. Gransewicz; Two opposed: Ms. Ross and
Ms. Dawkins; and One abstention: Mr. McEachin.) MOTION FAILS.
Mr. Kinzelman said he was outraged with the results of the vote. Mr.
McEachin noted that he could not vote on this recommendation until this
version of the memo is actually written and presented to the Board.
* It was moved by Mr. McEachin and seconded by Ms. Dawkins to adopt and
publish the proposed Board Memo as amended by Management and including an
additional sentence in the second paragraph. (Three in favor: Ms. Dawkins,
Ms. Ross and Mr. McEachin; One opposed: Mr. Gransewicz; and one abstention:
Mr. Kinzelman.) MOTION CARRIED.
Mr. Kinzelman stated that he abstained because of the paragraph titled "No
Fair Way of Distribution". In his opinion, if this paragraph were not
omitted, the information would be inaccurate and slanted.
f. Gainsharing
Mr. Kinzelman made a motion to eliminate Gainsharing for DCU employees. He
explained that if DCU cannot afford to compensate the members with a Bonus
Dividend, then they can't afford to do so for the employees. Mr.
Gransewicz noted that he agreed and also felt it was wrong for Mr. Cockburn
to have the ability to offer Gainsharing to employees without a formal
Board vote.
Ms. Dawkins explained that any bonus dividend funds would be many times
larger than Gainsharing, which is valued at under $100,000. Mr. McEachin
explained that the Board voted on this issue, after full discussion, and
taking revenge on the employees of DCU because bonus dividends did not pass
is wrong. Ms. Ross explained that Gainsharing replaced other types of
recognition. Mr. Cockburn added that his approved contract states that he
has full authority to set compensation for the employees. Taking that
authority away may be a breach of contract and may result in legal action
on the part of Mr. Cockburn.
Mr. Gransewicz made a motion to give the authority to set employee
compensation back to the full Board, subject to General Counsel approval.
Mr. Kinzelman seconded this motion. It was requested by Ms. Ross that this
topic be tabled until the next Board meeting. In the meantime, Mr.
Melchione could be consulted to avoid any illegal activity. Mr. Gransewicz
withdrew his motion and the Board agreed to table this discussion until the
next Board meeting.
XI. OLD BUSINESS
a. DCU Bylaws
Mr. Cockburn explained that there was no report on the bylaws at this time.
XII. NEW BUSINESS
a. Litigation Board Memo
Topic tabled until sentencing is complete.
XIII. REVIEW OF MINUTES
Ms. Ross noted that the Board would vote on all four sets of minutes
included in the Board package as a whole. The Board agreed on the
following amendments to the minutes:
January 25, 1994 Minutes:
- Page 5, Letter e: after the sentence ending with "Mr. Gransewicz.", add
"It was noted that all Board members, with the exception of Mr. Gransewicz,
understood that the Loss Policy would be retroactively enforced."
- Page 5, Letter h: after the sentence ending with "response rate.", add
"Several other changes Mr. Kinzelman requested were not included in the
survey."
- Page 7, first paragraph: at the end of the third sentence add "and
therefore, management disagrees with any proposed bonus dividend or
interest refund."
- Page 7, first paragraph: at the end of the fourth sentence add
"especially considering DCU employee Gainsharing."
- Page 7, second paragraph: add a fourth sentence to read "Mr. Cockburn
emphatically stated that it would be irresponsible for any Board member to
approve any bonus dividend or interest refund to the membership at this
time."
- Page 7, third paragraph: reword the second sentence to read " ...
negative impressions some members have about DCU."
- Page 8, third paragraph: replace the second sentence with "Mr. Gransewicz
asked that if voting for a bonus dividend is irresponsible, then why isn't
voting for DCU Gainsharing, which is a reduction in capital, also
irresponsible."
- Page 8, third paragraph: after "Mr. Cockburn explained that Gainsharing"
add "is a part of employee compensation as well as" and replace the word
"bonus" with "incentive"
- Page 8, third paragraph: add a sentence to the end to read "Mr.
Kinzelman noted that part of DCU's success is due to the members."
January 27, 1994 VaxNote Minutes:
- add the Chairperson's name to the recommendation
- omit the words "possibly" and "potentially".
February 3, 1994 Executive Committee Minutes:
X
X
X
It was noted that three changes requested by Mr. Gransewicz were not
approved by the Board and therefore not included in the minutes.
* It was moved by Mr. McEachin and seconded by Ms. Dawkins to approve, as
amended, the minutes of the January 25, 1994 Board Meeting, the January 27,
1994 Conference Call Vote, the February 3, 1994 Executive Committee
Meeting, and the February 11, 1994 Conference Call Vote. MOTION CARRIED
UNANIMOUSLY.
Ms. Ross asked if any Board member felt there was any topic discussed at
this meeting that should be made public before the minutes are made
available to the membership. Mr. Gransewicz stated that he feels that any
topic of discussion in General Session should be shared with the members if
they ask. Ms. Ross indicated that Mr. Gransewicz's release of
misinformation in the form of partial discussion and/or votes with no
discussion is misleading to the members and cannot continue. The process
for communicating Board meeting information to the members was stated:
1. The minutes are approved and are made available to the membership.
2. The release of time-sensitive information, prior to the release of
minutes, requires a Board Memo.
* It was moved by Mr. McEachin and seconded by Ms. Dawkins that all
discussion from this meeting, in its entirety, is confidential until the
minutes are approved and released. Board members that feel it is necessary
to release information prior to the release of minutes must request that
the Executive Committee consider its approval for early release. (Three in
favor: Ms. Ross, Ms. Dawkins and Mr. McEachin; Two opposed: Mr. Gransewicz
and Mr. Kinzelman.) MOTION PASSED.
XV. ADJOURNMENT
It was moved by Mr. McEachin and seconded by Ms. Dawkins to adjourn the
meeting at 7:15 p.m. MOTION CARRIED UNANIMOUSLY.
_________________________________ __________________________________
Lisa M. DeMauro Ross Philip J. Gransewicz
Chairperson Secretary
|
| 2.30 | BoD meeting, March 22, 1994 -- Discussion in 839 | WLDBIL::KILGORE | Remember the DCU 3Gs | Tue May 31 1994 12:57 | 536 |
|
[After chasing down the March minutes on hardcopy, including the second
page, and transcribing. I received the following online from DCU
Director Phil Gransewicz. The differences between this and the
original note 2.30 are minor and typographical in nature.]
DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Board of Directors' Meeting
March 22, 1994
The meeting, held in the second floor Training Room of Digital Credit
Union's headquarters facility (141 Parker Street, Maynard, MA), commenced
at approximately 2:40 p.m.
Present: Tanya Dawkins, Treasurer
Phil Gransewicz, Secretary
Paul Kinzelman (via conference call)
Gail Mann
Paul Milbury
Lisa DeMauro Ross, Chairperson
Also Present: Chuck Cockburn, President/CEO
Stephanie Duggan, Recording Secretary
Allan Prindle, Vice President of Lending
Absent: Tom McEachin
I. ROLL CALL AND DETERMINATION OF QUORUM
Ms. Ross noted the following change to the agenda:
- Under EXECUTIVE SESSION: add "b. Member Loan"
Mr. Gransewicz asked that the Special Report be added as a topic of
discussion for this meeting. Ms. Ross explained that this topic would be
covered under the President's Report discussion. Mr. Gransewicz asked why
his requested agenda item, regarding IRS audit check copies, was not
included in the agenda. It was agreed that Mr. Gransewicz should discuss
this operational issue with Ms. Madden.
II. EXECUTIVE SESSION
a. Volunteer Loan
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Board of Directors' Meeting
March 22, 1994
Page - 2
b. Member Loan
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GENERAL SESSION
Present: Tanya Dawkins, Treasurer
Phil Gransewicz, Secretary
Paul Kinzelman (via conference call)
Gail Mann
Paul Milbury
Lisa DeMauro Ross, Chairperson
Also Present: Chuck Cockburn, President/CEO
Stephanie Duggan, Recording Secretary
Mary Madden, Vice President of Operations
Betty Moran, Director of Finance
Allan Prindle, Vice President of Lending
Jim Regan, Internal Auditor
Absent: Tom McEachin
III. REVIEW OF MINUTES
The Board approved the following changes to the minutes:
- Page 6, third paragraph from the bottom: add "Mr. Sherman
commended Steve Behrens for his performance as Chairperson
of the Supervisory Committee."
- Page 7, first paragraph, second sentence: delete ", and
loans in general,".
- Page 7, third paragraph, second sentence: after the word
"was", add "due partly to".
- Page 8, letter c: after the word "discussed", add "during
Executive Session".
- Page 9, letter f: delete the second sentence and add to
the first sentence ", which will be presented to the Board
for review next month."
Board of Directors' Meeting
March 22, 1994
Page - 3
- Page 10, fourth paragraph: after "Mr. Kinzelman", add
"said he".
- Page 10, sixth paragraph, second sentence: replace "was"
with "were", and "will" with "would".
- Page 12, second section: delete the remainder of the text
on this page beginning with "The following ..." and replace
with "It was noted that three changes requested by Mr.
Gransewicz were not approved by the Board and therefore not
included in the minutes."
* It was moved by Ms. Mann and seconded by Ms. Dawkins to approve the
March 22, 1994 Board meeting minutes as amended. (Four in favor: Ms.
Dawkins, Ms. Mann, Mr. Milbury and Ms. Ross; Two opposed: Mr. Gransewicz
and Mr. Kinzelman.) MOTION CARRIED.
IV. FINANCIALS
February Financial Overview
Growth
Consumer loans declined $1.2 million in February. The largest portion of
this decline was due to an $800,000 drop in credit card loans. As in
January, the decline in credit card balances was due to seasonal variances
and was expected.
The amount of real estate loans sold on the secondary market in February
was $3.4 million. Even though this has slowed, the year-to-date amount of
real estate loans sold, $12.8 million, is $2.2 million higher than the
budgeted amount.
In February, savings grew $9.1 million for a year-to-date annualized growth
rate of 11%. The year-to-date annualized growth rate for these accounts
now stands at 20.7%.
This is a reversal of a two-year trend of savings decline, based on two
months of data.
Loan Quality
The charge-off ratio increased to 1.44%. This is a result of one loan for
$319,816 being charged off, which was expected.
The delinquency ratio of .32% is far below the budgeted amount of .60%
Profitability
Net income for the month was $625,242 which includes $325,000 in
non-operating income from a litigation settlement which was included in the
budget. For the year, net income is $1.1 million which is above budget by
$101,270.
Board of Directors' Meeting
March 22, 1994
Page - 4
Total operating expenses continued to be lower than budget. Year to date,
these expenses show an $80,000 favorable budget variance.
Capital Ratio
Gross capital ratio declined to 6.71% while net capital stayed level at
6.02%. This is a result of an increase in assets and the large loan that
was charged off in February.
V. President's Report
a. Annual Report
Mr. Cockburn explained that the Board previously requested that the Annual
Report be made available to the membership before the election ballot
mailing. The Annual Report was mailed to the 1,000 largest credit union
depositors and the remainder of the membership received the Special Report;
a condensed version of the Annual Report. This report was included in the
Marketing Plan, previously reviewed by the Board. It was also included in
the budget which was approved by the Board at their January meeting.
Mr. Cockburn further noted that he brought copies of the Special Report to
the NAFCU Congressional Caucus in Washington D.C. and received favorable
responses from other conference attendees. He indicated that many members
of the credit union industry are aware of DCU's past history and are
impressed with our continued success.
Mission/Value Cards
Mr. Cockburn gave each Board member a card containing DCU's Mission and a
condensed version of DCU's Values. He explained that these cards were
distributed to all DCU employees for their reference.
b. Member Survey
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Board of Directors' Meeting
March 22, 1994
Page - 5
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Board of Directors' Meeting
March 22, 1994
Page - 6
VI. COMMITTEE REPORTS
a. Supervisory Committee
Mr. Regan indicated that O'Rourke and Clark Accountancy Corporation would
not be presenting as planned because of scheduling problems. The committee
had no formal report for the Board.
b. Finance Committee
Ms. Dawkins indicated that the committee had not met, and had no report for
the Board.
c. Human Resource Committee
Ms. Ross indicated that the committee had not met and had no report for the
Board.
d. Credit Appeals Committee
Ms. Ross indicated that the committee had not met and had no report for the
Board.
VII. UPDATES AND DISCUSSIONS
a. Gainsharing
EXECUTIVE SESSION
ATTORNEY/CLIENT PRIVILEGE
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Board of Directors' Meeting
March 22, 1994
Page - 7
X
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END ATTORNEY/CLIENT PRIVILEGE
GENERAL SESSION
b. Marketing Update
Ms. Madden reviewed the following information with the Board:
1. Mortgage Promotion - Many application requests are being
received at this time.
2. Refi Auto Promotion - 51 refinances have been received to
date.
3. IPI Auto Sale - This promotion takes place this week and
includes pre-approved offers as well as invitations to
apply for a DCU Auto Loan.
4. ROI - Ms. Madden reviewed with the Board the projected
ROI information for the current promotions, which was
based on past promotion figures. The actual ROI figures
for these promotions will be made available to the Board
as they are received by management. Ms. Dawkins
requested that this topic be included on next month's
agenda.
Vice President of Marketing Position
Mr. Cockburn explained that management has reviewed the recruited candidate
information from Cardwell Group. Four candidates will be interviewed
shortly and management will attempt to reach a decision in two weeks.
c. Loan to Value Analysis
Mr. Prindle reviewed a handout containing Home Equity Loan Market Risk
Analysis information. Management reached the following conclusions:
Board of Directors' Meeting
March 22, 1994
Page - 8
1. DCU's exposure on home equity loans is relatively low.
2. Delinquency on home equity loan portfolio is .41% with
only 6 loans > 60 days delinquent.
3. Net charge-off for home equity loans in 1993 was .28%.
4. Property values have bottomed and have potential to
increase.
5. No action is necessary at this time.
6. DCU will continue to monitor delinquency and LTV
analysis.
VIII. RECOMMENDATIONS
a. Share Policy
Ms. Madden reviewed DCU's Share Deposit Account Policy with the Board.
This policy was created to establish a foundation from which all share and
dividend conditions are based, to guarantee consistency throughout the
Credit Union whereby all members are treated equally and to maximize
services provided while protecting, safeguarding and enhancing the quality
of Credit Union assets and the cooperative philosophy of the Credit Union.
This policy was also approved by General Counsel. The following changes
were requested by the Board:
- Under II. MEMBERSHIP CONDITIONS, General Conditions: add a
separate bullet regarding member notification before
closing a share draft account.
- Under III. SAVINGS AND TRANSACTION ACCOUNT STRUCTURE: Ms.
Madden will confirm that DCU's Loss Policy defines "members
in good standing".
- Under IV. RATE DETERMINATION & DIVIDEND DECLARATION, Rate
Determination, second paragraph, first sentence: after the
word "rate" add "at least quarterly".
* It was moved by Ms. Dawkins and seconded by Ms. Mann to approve the
Share Deposit Account Policy as amended. MOTION CARRIED UNANIMOUSLY.
b. Declaration of Dividends
Ms. Moran reviewed the Declaration of Dividends and Rate Ratification
recommendation for the first quarter of 1994 with the Board.
* It was moved by Ms. Mann and seconded by Mr. Milbury to approve the
declaration of dividends and rate ratification for the first quarter of
1994. MOTION CARRIED UNANIMOUSLY.
Board of Directors' Meeting
March 22, 1994
Page - 9
c. Bylaw and Board Policies Amendments
Mr. Cockburn reviewed the amendments to the bylaws and Board policies. He
explained that the content of the amendments had been previously approved
by the Board. The final wording presented in the Board package has been
approved by the NCUA and must be approved by the Board. The amendments
were:
1. Amendment to Article XXI, Section 2
of the Charter/Bylaws
2. Modification of Policy #7
3. Addition of Policy #8
* It was moved by Mr. Kinzelman and seconded by Mr. Milbury to approve the
amendment to Article XXI, Section 2 of the Charter/Bylaws, the modification
of Policy #7, and the addition of Policy #8, in the order in which they
were presented above. MOTION CARRIED UNANIMOUSLY.
d. Board Calendar
Mr. Cockburn explained that management recommends that the April Board
meeting date be changed to Friday, April 29, 1994 to be held at 2:30 p.m.
This will enable any new Board members to attend the meeting, as well as
provide the Board an opportunity to elect their officers.
Mr. Gransewicz indicated that if the meeting date was changed to April
29th, the day after the Annual Meeting, any new Board members would have no
meeting material to review and no time to prepare. Mr. Cockburn explained
that he would notify all election candidates of the change to give them
sufficient time to rearrange their schedules. Ms. Mann added that the
agenda should be light to decrease preparation time and enable any new
members to properly observe the meeting.
* It was moved by Ms. Mann and seconded by Mr. Milbury to change the April
Board meeting date to Friday, April 29, 1994 at 2:30 p.m. (Five in favor:
Ms. Dawkins, Ms. Mann, Mr. Milbury, Mr. Kinzelman, Ms. Ross; one opposed:
Mr. Gransewicz.) MOTION CARRIED.
e. Charge Offs
Mr. Prindle reviewed the charge off report and noted one change: the third
item from the bottom should be eliminated.
* It was moved by Ms. Dawkins and seconded by Ms. Mann to approve the
charge offs for the month of March, 1994, as amended. MOTION CARRIED
UNANIMOUSLY.
Board of Directors' Meeting
March 22, 1994
Page - 10
VIII. OLD BUSINESS
a. Litigation
Mr. Cockburn noted that Mr. Robert Cohen was sentenced to 10 years in
prison for his involvement in the fraud at DCU.
IX. NEW BUSINESS
a. Letter
Mr. Cockburn distributed letters addressed to each Board member from
Christopher Fillmore-Gillett. No discussion took place.
b. Conferences
Mr. Cockburn reminded the Board of the conference information included in
the Board package for their reference.
X. ADJOURNMENT
* It was moved by Ms. Mann and seconded by Mr. Milbury to adjourn the
meeting at 4:00 p.m. MOTION CARRIED UNANIMOUSLY.
_________________________________ ________________________________
Lisa M. DeMauro Ross Philip J. Gransewicz
Chairperson Secretary
|
| 2.31 | BoD Meeting, April 29, 1994 -- Discussion in 846 | WLDBIL::KILGORE | DCU 3Gs -- fired but not forgotten | Thu Jun 23 1994 11:50 | 410 |
|
[Posted with the author's permission]
From: US2RMC::"[email protected]" 23-JUN-1994 02:42:15.80
To: wldbil::kilgore
CC:
Subj: April 29, 1994 Board Minutes
DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Board of Directors' Meeting
April 29, 1994
The meeting, held in the MAINE Conference Room of Digital Equipment
Corporation's MSO2 facility (111 Powdermill Road, Maynard, MA), commenced
at approximately 2:45 p.m.
Present: Tanya Dawkins, Treasurer
Phil Gransewicz, Secretary
Paul Kinzelman (via conference call)
Gail Mann
Tom McEachin, Vice Chairperson
Paul Milbury
Lisa DeMauro Ross, Chairperson
Also Present: Karen Kupferberg, Supervisory Committee Member
Joseph Melchione, General Counsel
Wade Painter, O'Rourke & Clark Accountancy Corp.
Steve Sherman, Supervisory Committee Member
Staff: Chuck Cockburn, President/CEO
Stephanie Duggan, Recording Secretary
Mary Madden, Vice President of Operations
Betty Moran, Director of Finance
Allan Prindle, Vice President of Lending
Jim Regan, Internal Auditor
I. ROLL CALL AND DETERMINATION OF QUORUM
Ms. Ross explained that the following item would be added to the agenda:
III. EXECUTIVE SESSION - a. XXXXXXXXXXXXX
She also explained that the President's Report would follow the Committee
Reports. The Board was notified that the Supervisory Committee report
would be discussed under Executive Session.
II. O'ROURKE & CLARK AUDIT
Wade Painter, of O'Rourke & Clark Accountancy Corporation, presented the
1994 audit findings to the Board. The following exhibits were reviewed:
I. Retained Earning Analysis
II. Delinquent Loan Trends
III. Key Ratios
The report also included the following information:
a. Independent Auditor's Report
b. Consolidated Statements of Financial Condition
c. Consolidated Statements of Income
d. Consolidated Statements of Retained Earnings
e. Consolidated Statements of Cash Flows
f. Notes to Consolidated Financial Statements
Board of Directors' Meeting
April 29, 1994
Page - 2
Mr. Painter covered DCU's audit results, which were excellent this year,
commenting on our strong internal controls and strong bottom line. The
Board thanked Mr. Painter for his presentation and he left the meeting.
III. EXECUTIVE SESSION
x
x
x
x
GENERAL SESSION
IV. REVIEW OF MINUTES
The following minutes changes were submitted for Board approval:
a. Page 1, I. ROLL CALL AND DETERMINATION OF QUORUM, first full
paragraph: after the third sentence, replace the remainder of the
paragraph with "It was agreed that Mr. Gransewicz would discuss this
operational issue with Ms. Madden."
b. Page 2, b. Member Loan, last sentence before the vote: after the word
"approved", add "subject to the subordination of the second mortgage
holder,".
c. Page 6, VII. UPDATES AND DISCUSSIONS: include all text of letter a.
(Gainsharing) in GENERAL SESSION.
* It was moved by Ms. Mann and seconded by Mr. Milbury to approve changes
a and b only. (Three in favor: Ms. Mann, Mr. Milbury and Ms. Ross; three
opposed Ms. Dawkins, Mr. Gransewicz and Mr. Kinzelman; one abstention: Mr.
McEachin.) MOTION FAILS.
* It was moved by Ms. Dawkins and seconded by Mr. Kinzelman to approve
changes a and b, and to include only the heading of the Gainsharing section
as part of GENERAL SESSION. (Four in favor: Ms. Dawkins, Mr. Gransewicz,
Mr. Kinzelman and Ms. Ross; two opposed: Ms. Mann and Mr. Milbury; and one
abstention: Mr. McEachin) MOTION CARRIED.
Board of Directors' Meeting
April 29, 1994
Page - 3
V. FINANCIALS
Ms. Dawkins reviewed the following report:
March Financial Overview
Growth
Loans to members grew $2.4 million in March. Consumer loans outstanding
increased $1.7 million, while Real Estate loans increased $.7 million. The
main growth was in vehicle loans ($2.2 million), which are now growing at
an annualized rate of 10.9%. Marketing promotions for both vehicle loans
and first mortgages were implemented in March.
Additionally, $2.5 million in real estate loans were sold on the secondary
market in March bringing the year-to-date total of real estate loans sold
to $15.4 million. Our real estate servicing portfolio has now grown to
almost $78 million.
Total savings for the month increased $5.4 million, partly due to the month
ending on a payday and to quarterly dividends being paid. Checking account
maintenance fees for some members were implemented three months ago. The
volume in these accounts is growing at an annualized rate of 23.3%,
compared to a negative 7.1% in 1993.
Total savings are growing at an annualized rate of 14.1%, compared to a
negative 5.9% last year.
Loan Quality
Both the delinquency and the charge-off ratios dropped even lower in March
to .28% (down from .32% last month) for delinquencies and to 1.08% (down
from 1.44% in February) for charge-offs.
Profitability
Net income for the month was close to budget at $249,208. This brought net
income for the year to $1.4 million which is $102,000 better than budget.
Loan income is less than expected because loan volume year-to-date has been
less than budgeted. Investment income is somewhat better than expected,
since we have more volume in investments right now than was budgeted.
Other income also shows a favorable variance to budget.
On the expense side, both dividend expense and total operating expenses
remained favorable to budget.
Capital Ratio
The capital ratio remained relatively flat at 6.70% even with a $4.7
million increase in assets.
Board of Directors' Meeting
April 29, 1994
Page - 4
VI. COMMITTEE REPORTS
Mr. Cockburn and Senior Management left the room at this time.
EXECUTIVE SESSION
ATTORNEY/CLIENT PRIVILEGE
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Board of Directors' Meeting
April 29, 1994
Page - 5
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
GENERAL SESSION
Mr. Sherman left the meeting at this time and the Board took a five-minute
break. The meeting reconvened at 4:15 p.m.
Board of Directors' Meeting
April 29, 1994
Page - 6
b. Finance Committee
The committee held no meeting in April and had no formal report for the
Board.
c. Human Resource Committee
Mr. McEachin noted the following topics discussed at the committee's
April 14, 1994, meeting.
1. Selection of Marketing Director
2. Job Ranking Structure Changes
3. Personnel Policies
4. Benefits Research
5. Review of One Exit Interview Form
d. Credit Appeals Committee
Ms. Ross made reference to the committee's report on page 94 of the Board
package.
VII. PRESIDENT'S REPORT
a. Accountability Map
Mr. Cockburn reviewed the status of his Accountability Map with the Board.
The following items were noted:
- Management has hired a Vice President of Marketing (Tim Garner) to start
May 10, 1994.
- 30 Quality Projects have been completed at DCU and another 19 are
currently in process. DCU's Quality Vision Newsletter has been created and
will be updated quarterly.
- Peer Group Analysis shows very similar results to O'Rourke and Clark's
audit results.
- The Annual Meeting has been postponed and the Election will be re-done.
- Mr. Cockburn has been re-elected to the EasCorp Board of Directors and he
will also be attending a peer group meeting in Louisville from April 30 -
May 3, 1994.
- Net income is above budget by $102,004, the gross capital ratio is 7
basis points above the yearend figure (6.70), and the net capital ratio is
17 basis points above the yearend figure (6.01).
- Accountability Mapping has been expanded to include 20 Supervisors and
Managers.
- Total real estate loans sold and held is behind schedule at $159,338,000,
the delinquency rate is at .28%, and the charge off rate is at 1.08 (.43
without one loan).
- Non-branch delivery system promotion scheduled for August, a Debit Card
Quality Team is in progress, and software exploration is in process for
phone-a-loan.
- Member survey results are near completion and the savings growth goal has
been surpassed (14.10%).
Board of Directors' Meeting
April 29, 1994
Page - 7
Ms. Dawkins asked that management develop a program or recommendations to
the Board to help members that have been laid off.
VIII. UPDATES AND DISCUSSIONS
a. Health Benefits Changes
Ms. Madden reviewed changes to the DCU Employees Health Benefits Package.
These changes are scheduled to be implemented on July 1, 1994. The
Benefits Research Team made these recommendations to the Human Resource
Committee to provide DCU employees with a cost effective, quality product
that provides excellent customer service. The changes made will have no
impact on employees' premiums or DCU's cost.
Changes
1. Utilize Delta Dental for all employees (local and remote)
2. Research self-funded vision for out-of-state employees
3. Drop Blue Cross/Blue Shield Healthflex Blue and offer MA and NH
employees the choice of
a. Harvard Community Health Plan
b. Tufts Associated Health Plan
c. Fallon Community Health Plan
b. Marketing Update
Ms. Madden provided updated ROI figures to the Board for DCU's current
Marketing Promotions. It was noted that the Pre-approved Refinance Auto
Promotion was the most successful, with a response rate of 13.6% (projected
8%).
IX. RECOMMENDATIONS
b. Loan Policy
Mr. Prindle reviewed a loan policy recommendation to allow members to
finance taxes and filing fees with loan proceeds.
* It was moved by Ms. Dawkins and seconded by Mr. Milbury to approve the
addition of wording, in the Consumer and Business Consumer Loan Policies,
to allow taxes and filing fees to be financed. MOTION CARRIED UNANIMOUSLY.
Mr. Milbury left the room at this time.
c. Charge Offs
Mr. Prindle reviewed the Charge Off Report for the month of April, 1994.
Board of Directors' Meeting
April 29, 1994
Page - 8
* It was moved by Ms. Mann and seconded by Mr. McEachin to approve the
charge offs, in the amount of $72,453,39, for the month of April, 1994.
MOTION CARRIED UNANIMOUSLY.
a. Planning Conference Site
Mr. Cockburn reviewed the choices for the 1994 Strategic Planning
Conference Site. Mr. Milbury returned to the meeting at this time. The
Board reached a consensus to hold the meeting at the Waterville Valley
Resort and Conference Center in New Hampshire.
X. ADJOURNMENT
* It was moved by Mr. McEachin and seconded by Ms. Mann to adjourn the
meeting at 4:50 p.m. MOTION CARRIED UNANIMOUSLY.
________________________________ ____________________________________
Lisa M. DeMauro Ross Philip J. Gransewicz
Chairperson Secretary
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|
| 2.32 | May 24, 1994 BoD Minutes - Discussion in 848 | ROWLET::AINSLEY | Less than 150 kts. is TOO slow! | Mon Jul 11 1994 09:20 | 540 |
| From: US1RMC::"[email protected]" 9-JUL-1994 00:26:37.76
To: rowlet::ainsley
CC:
Subj: May 24, 1994 Board Minutes
DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Board of Directors' Meeting
May 24, 1994
The meeting, held in the second floor Training Room at Digital Credit
Union's (DCU's) headquarters facility, commenced at approximately 2:45
p.m.
Present: Tanya Dawkins, Treasurer
Paul Kinzelman (via conference call)
Gail Mann
Tom McEachin, Vice Chairperson
Paul Milbury
Lisa DeMauro Ross, Chairperson
Also Present: Joe Melchione, General Counsel
Mike Steuer, CUNA Mutual Insurance Group
Staff: Chuck Cockburn, President/CEO
Stephanie Duggan, Recording Secretary
Tim Garner, Vice President of Marketing
Mary Madden, Vice President of Operations
Betty Moran, Director of Finance
Allan Prindle, Vice President of Lending
Jim Regan, Internal Auditor
Absent: Phil Gransewicz, Secretary
I. ROLL CALL AND DETERMINATION OF QUORUM
Mr. Cockburn introduced Tim Garner, DCU's new Vice President of Marketing,
to the Board. He also introduced Mike Steuer, of CUNA Mutual Insurance
Group, and explained that Mr. Steuer would be making an insurance
presentation at this meeting.
Ms. Ross noted the following additions/clarifications to the agenda:
a. XXXXXXX
b. Updates and Discussions: "Legal Update" will be added as letter d.
c. Old Business will include "Letter to Members" and "Election Update".
II. INSURANCE PRESENTATION
Mr. Steuer provided a handout outlining DCU's CUMIS 581 Discovery Bond and
Endorsements Coverage Option through CUNA Mutual Insurance Group. He
explained that the CUMIS Bond held by DCU provides protection against loss
resulting from employee or Director dishonesty or fraud plus losses due to
lack of faithful performance of trust by employees. (Also burglary,
robbery, theft, extortion, unexplainable disappearance, forgery, and
counterfeit currency.) His presentation also included a premium
statement,
totaling $159,270 annually, as well as a claims history statement from
1989
to the present.
Board of Directors' Meeting
May 24, 1994
Page - 2
Mr. Cockburn clarified that all coverage limits are at a maximum, while
all
deductibles are at a minimum. He also indicated that future changes made
to this insurance coverage will be reviewed by the Board at the next Board
meeting. Mr. McEachin asked how this cost compared to last year's
premium.
Mr. Steuer explained that DCU's premium increased by 8.3% from 1993. The
Board thanked Mr. Steuer for his presentation and he left the meeting.
EXECUTIVE SESSION
X
X
X
X
X
X
X
ATTORNEY/CLIENT PRIVILEGE
X
X
X
X
X
X
X
X
X
X
Board of Directors' Meeting
May 24, 1994
Page - 3
X
X
X
X
X
X
X
X
GENERAL SESSION
III. REVIEW OF MINUTES
The Board reviewed the minutes of the April 20, 1994 Special Board of
Directors' Meeting, the April 29, 1994 Board of Directors' Meeting, and
the
May 9, 1994 Telephone Vote. The following amendments were requested:
a. April 20, 1994 Special Board of Directors' Meeting - none
b. April 29, 1994 Board of Directors' Meeting
1. Page 2, IV. REVIEW OF MINUTES, second vote: Mr. McEachin
abstained from the vote.
2. Page 5, ELECTION INVALIDATION: replace the word "disinterested"
with "non-candidate" in all occurrences.
3. Page 8, first vote: The vote was unanimous.
c. May 9, 1994 Telephone Vote Minutes - none
* It was moved by Mr. McEachin and seconded by Ms. Dawkins to approve the
minutes of the April 20, 1994 Special Board of Directors' Meeting, the
April 29, 1994 Board of Directors' Meeting, and the May 9, 1994 Telephone
Vote, as amended. MOTION CARRIED UNANIMOUSLY.
IV. FINANCIALS
April Financial Overview
Growth
Loans to members grew $4.9 million in April. Consumer loans outstanding
increased $2.0 million, while real estate loans increased $2.9 million.
Vehicle loans grew $1.3 million and are now growing at an annualized rate
of 15.1%.
Additionally, $785,000 in real estate loans were sold on the secondary
market in April bringing the year-to-date total of real estate loans sold
to 16.2 million. Our real estate servicing portfolio has now grown to
almost $78 million.
Board of Directors' Meeting
May 24, 1994
Page - 4
Total savings for the month decreased $5.9 million, partly due to
comparing
April to March which had ended on a payday and which included quarterly
dividends. Checking accounts are growing at an annualized rate of 9.9%,
compared to a negative 7.1% in 1993.
Total savings are growing at an annualized rate of 5%, compared to a
negative 7.3% last year.
Loan Quality
While the delinquency ratio rose slightly to .31% (up from .28% in March),
the charge-off ratio dropped even lower to ,88% (down from 1.08% last
month).
Profitability
Net income for the month was $446,907 which is $32,330 over budget. This
brought net income for the year to $1.8 million which is $134,000 better
than budget.
Loan income is less than expected because loan volume year-to-date has
been
less than budgeted. Investment income is somewhat better than expected,
since we have experienced more volume in investments than was budgeted.
On the expense side, both dividend expense and total operating expenses
remained favorable to budget.
Capital Ratio
The capital ratio grew to 6.92%.
V. PRESIDENT'S REPORT
a. DCU Turnaround
Mr. Cockburn reviewed selected charts illustrating DCU's turnaround during
the last two years. The charts showed the financial turnaround of the
credit union and the consistent improvement of members' rating of service
in the areas of reliability, responsiveness, tangibles, empathy and
assurance. The final chart showed how IDC, an independent firm that
evaluates the financial condition of credit unions and other financial
institutions, ranked DCU below average at yearend 1991 and superior as of
December 1, 1993.
b. Checking Account Analysis
Mr. Cockburn presented to the Board an Analysis of DCU's Checking Accounts
as of March 31, 1994. The data showed that only 16.3% of all households
were charged a checking account fee in March, 1994. The average balance
in
checking accounts increased significantly by $906 or 57.1%.
Ms. Dawkins requested that management run an analysis on the top 8 credit
unions in the Directory of Large Credit Union's report to determine the
differences between these credit unions and DCU. Mr. Kinzelman asked if
the members could have this information. Mr. Cockburn explained that he
plans to summarize this information for the members as soon as possible.
Board of Directors' Meeting
May 24, 1994
Page - 5
c. Closed Account Survey
The general conclusion concerning members that closed their checking
and/or
membership was that the vast majority;
1) no longer work for Digital,
2) had little deposit or loan relationship with DCU and,
3) were generally or completely satisfied with DCU.
d. Member Survey
Mr. Cockburn reviewed the Executive Summary of the 1994 Member Survey
results. The data showed DCU's major competitors by product and the
primary reasons members choose an institution for the various products.
Other areas of the survey showed that members rated DCU better or the same
in every category of the survey. Members stated that funds withdrawn from
DCU during 1993 were used as follows; special expenses, mutual funds,
transferred to another financial institution, living expenses and for the
purchase of stocks and bonds. When funds were transferred to another
financial institution, the members listed the major banks as the place
where the funds were transferred. DCU has better rates than these
institutions.
VII. COMMITTEE REPORTS
a. Supervisory Committee
The Supervisory Committee last met on May 19, 1994. The following is a
report of the meeting, submitted by committee member, Bob Ketz:
1. Betty Moran, Director of Finance, reviewed the financial trends,
noting
we are on target to all trends, or know the causes for any unusual
spikes.
2. We reviewed the 1993 NCUA action plan status report and are satisfied
with the actions taken by management to date.
3. We reviewed the O'Rourke and Clark Account verification results and
management letter, both accepted as given. We do plan on discussing
the depth of the management letter comments with the Auditor.
4. We were updated on several investigations by Jim Regan, and after a
review of the status felt that the follow up was satisfactory. One
situation revealed the need for more formal documentation of member
instructions by credit union personnel.
5. We reviewed some recent audits and are satisfied with their
conclusions.
Board of Directors' Meeting
May 24, 1994
Page - 6
6. We completed a conference call with Joe Melchione to discuss changes
to
the short form and long form legal letter that are to be available for
the members in regard to the election invalidation. We also discussed
the format of two other form letters to be sent to members who have
sent violation notices to the Supervisory Committee. Finally, we
agreed to hold off, for one month, on any action on our proposed
recommendation made to the Board at the last meeting.
b. Finance Committee
Ms. Dawkins explained that the Finance/Investment Committee will be
holding
a meeting on June 9, 1994.
c. Human Resource Committee
The committee held no meeting in May and had no report for the Board.
d. Credit Appeals Committee
The committee held no meeting in May and had no report for the Board.
VIII. UPDATES AND DISCUSSIONS
a. Debit Card
Mr. Regan informed the Board that the Debit Card Team has selected VISA as
a vendor for DCU's debit card. Debit card implementation is scheduled for
the middle of November, 1994.
b. Field of Membership
Mr. Regan reviewed with the Board NCUA's new Field of Membership (FOM)
policies, as well as DCU Management's Field of Membership Report. In
summary, management believes that credit union growth through a FOM
expansion is one alternative available to facilitate growth. Although a
FOM expansion is not necessary, potential and cost effectiveness should be
considered. DCU management is not currently pursuing FOM expansion.
c. Marketing Update
Mr. Garner presented two overheads, explaining the following promotional
information:
Ongoing: Mortgage Promotion (renters/new purchases)
Refinance Mortgage Promotion
IPI Auto Sale (MA, Washington DC, and VA)
Upcoming: Mortgages in new states (MD, VA, GA, CA, and IL)
VISA activation mailing
Home Equity Line of Credit activation mailing
Home Equity Junior introduction
Home buying seminars in GA and MD
Board of Directors' Meeting
May 24, 1994
Page - 7
d. XXXXXXXX
EXECUTIVE SESSION
ATTORNEY/CLIENT PRIVILEGE
X
X
X
X
X
X
X
X
X
X
X
X
GENERAL SESSION
IX. RECOMMENDATIONS
a. Policy for Laid-off Members
As requested, Mr. Prindle reviewed the following layoff assistance plan
with the Board:
1. POLICIES
- addressed today
2. SEMINARS
- Any DCU member and significant other
- End of June
- Two internal presenters
- Location: non-Digital facilities throughout U.S., sign-up
required.
- Marketed through NETWORK, branches, checking account
statements,
facility communications, and E-Mail
3. CREDIT COUNSELING
- Refer from collections or individual initiative, some by
appointment
- Consumer Credit Counseling Service
- Two internal employees sent to CUNA Financial Counseling School
- Move from external to internal
- Marketed through NETWORK, branches and seminars
Board of Directors' Meeting
May 24, 1994
Page - 8
Mr. Cockburn reviewed the proposed Layoff Assistance Plan with the Board.
The Board asked that the second sentence at the bottom be reworded. Mr.
McEachin asked if this policy would be retroactive. Mr. Cockburn agreed
that the policy will be retroactive to January 1, 1994. Ms. Ross asked
what the cost would be to hold the seminars. Mr. Cockburn explained that
the only charges would be for the meeting facilities and materials.
* It was moved by Ms. Dawkins and seconded by Ms. Mann to approve the
Layoff Assistance Policy, as amended. MOTION CARRIED UNANIMOUSLY.
b. Loan Policy
Mr. Prindle explained that, due to new loan products, personnel changes
and
process improvements, the Loan Policy is in need of the following
recommended revisions:
- Within the "Loan restructuring or modification" section of the
General Loan Policy, add wording that allows the Collections Manager
decision authority to extend a loan note up to six months once during the
life of the loan.
- Within the "Types of Business Loans:"section of the Business Loan
Policies, change maximum acceptable loan to value ratio for second
mortgages from 70% to 75%.
- Within the "Types of Available Loans" section of the Consumer Loan
Policy, add secured VISA to the list of "Other secured loans".
- Within the "Types of Available Loans" section of the Real Estate Loan
Policy, add Home Equity Jr. to "Second Mortgages".
- Within the "Repayment Plans" section of the Collection Policy, add
wording that refers to Collection Manager authority to extend notes.
- Within the "Loan Authority Limits by Officer" section, add Marie
Fleming,
remove Micheline Wold, remove Cathy Grenda.
* It was moved by Ms. Dawkins and seconded by Mr. Kinzelman to approve
the
Loan Policy, as amended. MOTION CARRIED UNANIMOUSLY.
c. Charge Offs
Mr. Prindle reviewed the charge off report for the month of May, 1994.
* It was moved by Ms. Mann and seconded by Mr. Milbury to approve the
charge off report, in the amount of $90,689.87, for the month of May,
1994.
MOTION CARRIED UNANIMOUSLY.
Board of Directors' Meeting
May 24, 1994
Page - 9
X. OLD BUSINESS
a. Election Invalidation Letters
Mr. Cockburn reviewed two proposed member letters which will be mailed out
to individual members if they request information about the election
invalidation. The first is from the non-candidate directors and the
Supervisory Committee, and the second is from the law offices of Bingham,
Dana and Gould.
* It was moved by Mr. McEachin and seconded by Mr. Milbury that the Board
approve the following:
1. The release of both letters to any interested members and on
VaxNotes. A short article would be included in the July newsletter
indicating that members may contact the credit union if they request
further information about the election invalidation. Both letters would
then be sent to these members.
2. Supervisory Committee and non-candidate Board approval for the
contents of the first (smaller) letter. The committee and non-candidate
Board member names appear on page two of this letter.
MOTION CARRIED UNANIMOUSLY.
b. Election Update
Mr. Cockburn explained that the Supervisory Committee is working with the
non-candidate Board members to finalize the new election rules.
XI. ADJOURNMENT
* It was moved by Mr. Milbury and seconded by Ms. Dawkins to adjourn the
meeting at 5:15 p.m. MOTION CARRIED UNANIMOUSLY.
___________________________________
Lisa M. DeMauro Ross,
Chairperson
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|
| 2.33 | June 8, 1994 BoD Meeting - Discussion in 849 | ROWLET::AINSLEY | Less than 150 kts. is TOO slow! | Mon Jul 11 1994 09:23 | 79 |
| From: US1RMC::"[email protected]" 9-JUL-1994 00:26:24.02
To: rowlet::ainsley
CC:
Subj: June 8, 1994 Minutes
DIGITAL EMPLOYEES FEDERAL CREDIT UNION
Telephone Vote Minutes
June 8, 1994
* It was moved by Ms. Ross and seconded by Mr. Milbury to approve the
proposed Election Schedule. MOTION CARRIED UNANIMOUSLY.
________________________________ ______________________________
Lisa M. DeMauro Ross Philip J. Gransewicz
Chairperson Secretary
attachment:
ELECTION SCHEDULE
June 28, 1994
Action Item Proposed
Completion Date
1. Contact Candidates Re: Statement Adjustments 7/01/94
2. Adjusted Candidate Statements Returned 7/05/94
3. Notification of Annual Meeting 7/07/94
4. Candidate Statement Adjustments to MIS 7/12/94
5. Member Eligibility Cut-Off Deadline 7/14/94
6. Ballot Tape to MIS 7/19/94
7. Ballots & Candidate Statements Finalized
and Approved 7/25/94
8. Election Posters Displayed at Branches 8/04/94
9. Ballots Mailed 8/05/94
10. Deadline for Complaints/"Quiet Time"
Begins (period of no campaigning) 8/25/94
11. Deadline for Supervisory Committee to Report
Violations and the Committee's Actions 9/01/94
12. Ballots Returned 9/15/94
13. Annual Meeting 9/20/94
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% Subject: June 8, 1994 Minutes
|
| 2.34 | June 28, 1994 BoD Meeting -- Discussion in 859 | WLDBIL::KILGORE | DCU 3Gs -- fired but not forgotten | Mon Aug 08 1994 09:22 | 584 |
| From: US2RMC::"[email protected]" 7-AUG-1994 12:39:31.29
To: wldbil::Kilgore
CC:
Subj: Board Minutes, Please post
DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Board of Directors' Meeting
June 28, 1994
The meeting, held in the Merrimack Conference Room of Digital Equipment
Corporation's Merrimack facility (Digital Drive, Merrimack, NH), commenced
at approximately 2:35 p.m.
Present: Tanya Dawkins, Treasurer (via conference call)
Phil Gransewicz, Secretary
Paul Kinzelman (via conference call)
Gail Mann
Tom McEachin, Vice Chairperson
Paul Milbury (via conference call - 3:05 p.m.)
Lisa DeMauro Ross, Chairperson (2:50 p.m.)
Staff: Chuck Cockburn, President/CEO
Stephanie Duggan, Recording Secretary
Tim Garner, Vice President of Marketing
Mary Madden, Vice President of Operations
Betty Moran, Director of Finance
Allan Prindle, Vice President of Lending
Jim Regan, Internal Auditor
I. ROLL CALL AND DETERMINATION OF QUORUM
The Board agreed to the following requested agenda changes:
- add "Phone Survey" under PRESIDENT'S REPORT
- add "Field of Membership" under RECOMMENDATIONS
- add "Charter" under OLD BUSINESS
Mr. Cockburn suggested that the Quality Team make its presentation at this
time. As Ms. Ross had not yet arrived, the Board agreed.
(At 2:40 p.m., Fred Holland, Supervisory Committee member joined the
meeting.)
II. TEAM PRESENTATION
Mr. Prindle introduced the members of the Quality Team for New First
Mortgage States:
Tom Gray - Real Estate Servicing Manager & Team Leader
Maureen Erb - Alpharetta Branch Manager (via conference call)
Tom Klett - Mortgage Processor
Marco Laferriere - Mortgage Processor
Debbie Vinciguerra - Real Estate Servicing Representative
The team was created on October 15, 1993, and was sponsored by Mr.
Prindle.
The scope of this project was to set up procedures for originating and
closing first mortgages in five new states: California, Illinois,
Maryland,
Virginia and Georgia. With the objective of providing superior quality
service to the members in these states, the team successfully completed
the
following tasks:
Board of Directors' Meeting
June 28, 1994
Page - 2
1. Investigated all applicable state laws and regulations concerning
first
mortgage lending in each state. Set up procedures to comply with all
state
requirements.
2. Contacted and approved both appraisers and title companies for use by
DCU. This involved making agreements with these vendors on a fee
schedule,
turnaround time, and areas of responsibilities and duties.
3. Obtained closing cost information for each state. Set up spreadsheet
for use by DCU's mortgage origination staff.
4. Investigated issues concerning the escrowing of real estate taxes in
each state.
5. Trained DCU branch personnel in Georgia and Maryland on originating
first mortgage products.
6. Trained Mortgage Origination Staff on specific requirements for each
new state.
7. Provided information to Training Manager on each state's requirements.
This was also passed on to the Information Center.
Follow-up tasks will be performed to closely monitor the level of service:
1. Prepare and distribute employee surveys.
2. Gather data on approval and closing time for loans in new
states.
3. Prepare and distribute member survey for applicants in new
states.
Mr. Gray noted that DCU's mortgage program was announced in the new states
with a coupon promotion and two mortgage seminars were offered in Georgia
and Maryland. These seminars were led by two DCU employees: Mr. Gray and
Eileen Galligan, Mortgage Operations Manager.
(At 2:50 p.m. Lisa DeMauro Ross, Chairperson, joined the meeting)
The Board thanked the team for their presentation and the team left the
meeting. Management also left the meeting at this time.
EXECUTIVE SESSION
ATTORNEY/CLIENT PRIVILEGE
X
X
X
Board of Directors' Meeting
June 28, 1994
Page - 3
GENERAL SESSION
END ATTORNEY/CLIENT PRIVILEGE
III. REVIEW OF MINUTES
* It was moved by Ms. Mann and seconded by Mr. McEachin to approve the
May
24, 1994, Board Meeting Minutes with three minor typo changes. MOTION
CARRIED UNANIMOUSLY.
IV. FINANCIALS
(At 3:05 p.m., Paul Milbury joined the meeting via conference call)
Ms. Moran reviewed the following Financial Overview for the month of May:
Growth
Loans to members grew $3.1 million in May. Consumer loans outstanding
increased $591,000, while Real Estate loans increased $2.5 million.
Vehicle loans grew $634,000 and are now growing at an annualized rate of
15.2%.
Additionally, $554,000 in real estate loans were sold on the secondary
market in May, bringing the year-to-date total of real estate loans sold
to
$16.7 million. Our real estate servicing portfolio remains at almost $78
million.
Total savings for the month decreased $7.2 million, partly due to the day
of the week on which the last two months have ended. Checking accounts
showed the biggest drop, while CDs increased for the third month in a row.
As of May, the annualized growth rate for total savings is a negative
1.4%.
Loan Quality
The delinquency ratio dropped in May to .29% (down from .31% last month)
and the charge-off ratio dropped to .77% (down from .88% in April).
Profitability
Net income for the month was $366,293, which is $27,863 under budget.
This
brought net income for the year to $2.2 million, which is $106,000 better
than budget.
Due to slower than budgeted loan growth, year-to-date loan income is less
than expected. Investment income was somewhat better than expected, since
we have experienced more volume in investments than budgeted.
On the expense side, both dividend expense and total operating expenses
remained below budget.
Board of Directors' Meeting
June 28, 1994
Page - 4
Capital Ratio
With assets of $348 million as of May 31st, the capital ratio grew to
7.16%.
V. PRESIDENT'S REPORT
a. Election Schedule
Mr. Cockburn presented the Board with an updated version of the Election
Schedule, which included the following additions:
Item Completion Date
#5. Member Eligibility Cut-Off Deadline 7/14/94
#10. Deadline for Complaints/"Quiet Time"
Begins (period of no campaigning) 8/25/94
#11. Deadline for Supervisory Committee to
Report Violations and the Committee's
Actions 9/01/94
The Board agreed to all additions and accepted the Election Schedule as a
final version. Ms. Mann asked what the terms of office would be for those
elected to the Board in this election. It was noted that those elected
would serve until the 1997 Annual Meeting.
b. Phone Survey
Mr. Cockburn provided the Board with copies of a telephone survey
concerning the members' understanding and acceptance level of DCU's
pricing
and relationship approach. In a recent phone conversation with Ms.
Dawkins, Mr. Kinzelman, Mr. McEachin and Ms. Ross, he indicated that this
survey would be beneficial to Management and the Board. He explained
that
Brad Senden & Associates of San Ramon, California, would contact 400
members from a random sampling of 10,000. The survey will be performed,
over the phone, in about 15-20 minutes. Gross tabulations of the results
by various segments will be provided to the Board by Friday, July 8, 1994,
and the survey's implications will be discussed at the next Board meeting.
He asked that the Board review the proposed survey and give any comments
to
him by Wednesday, June 29, 1994, to allow the firm to begin the survey by
the end of the week.
Mr. Kinzelman asked if a question could be added that asks the members if
they are satisfied with the way fees were introduced. Mr. Cockburn agreed
to add this question.
c. Liaison Meeting
Mr. Cockburn noted that this month's Liaison Meeting had been canceled and
will be rescheduled shortly.
Board of Directors' Meeting
June 28, 1994
Page - 5
VI. COMMITTEE REPORTS
a. Supervisory Committee
Election Rules
Mr. Holland explained that the Supervisory Committee had reviewed and
approved the Election Rules. Final copies of the rules were distributed
at
this time.
EXECUTIVE SESSION
X
X
X
GENERAL SESSION
b. Finance Committee
Ms. Dawkins reviewed the following report of the Finance Committee Meeting
held on June 9, 1994:
FIRST QUARTER FINANCIAL ANALYSIS
In reviewing the Financial Analysis prepared for DCU by SouthWest
Corporate
as of March, 1994, DCU's 6-month repriceable GAP was calculated to be
positive 1.3%. SouthWest noted that our gross spread has tightened up as
expected, while the continued growth in Capital is a positive trend.
CURRENT INVESTMENT STRATEGY
The current strategy was reviewed. It was noted that funds from a $10
million Treasury Note which matured on 5/31/94 would be kept liquid to
fund
anticipated loan growth.
INCOME SIMULATION
A simulation was done showing the effect on our gross spread of a 300
basis
point "shock" rise in interest rates. The simulation showed an 11 basis
point drop in our gross spread. This is another analysis we do quarterly
in reviewing DCU's financial position.
DURATION ANALYSIS
As of May 31, 1994 the duration of DCU's investment portfolio is .72 which
shows minimum exposure to interest rate risk.
Board of Directors' Meeting
June 28, 1994
Page - 6
CMO ANALYSIS
An analysis was presented showing how our current and paid-down CMOs have
performed. This analysis included a comparison of expected vs. actual
performance measures including weighted average life, yield, and
prepayment
assumption. The analysis showed that there had been no changes overall in
the anticipated performance of these CMOs.
INVESTMENT POLICY, CAPITAL EXPENDITURES, MAY FINANCIALS
The committee reviewed a recommendation to amend the current Investment
Policy to require notification of third party vendors of any changes in
management. This recommendation will be presented to the entire Board of
Directors at this Board meeting.
Year-to-date Actual Capital Expenditures were noted to be less than
budgeted for the first 5 months of the year.
The committee also reviewed May financial highlights. Ms. Dawkins noted
that the committee requested that Ms. Moran prepare a revised forecast for
the remainder of 1994 to be presented at their next meeting.
c. Human Resource Committee
It was noted that the committee did not meet in June; however, a July
meeting is being planned.
d. Credit Appeals Committee
It was noted that the committee did not meet in June.
At 3:45 p.m. the Board took a five-minute break.
VII. UPDATES AND DISCUSSIONS
a. Marketing Update
Mr. Garner reviewed the status of the following DCU promotions:
- Mortgage Refinance Promotion: 151.57% return on investment
- Mortgage Renter/New Promotion: 1671.15% return on investment
- DC Auto Promotion: 12238.34% return on investment
He also reviewed three upcoming promotions:
- Mortgages in new states: June - August, 1994 (DCU offering mortgages in
5 new states)
- VISA Activation: June - July, 1994 (Encourages members to use their
VISA
credit lines)
- Home Equity Activation: June - July, 1994 (Encourages members to use
their Home Equity credit lines)
Board of Directors' Meeting
June 28, 1994
Page - 7
b. Board/Management Relations
Ms. Ross explained that she attends the National Association of Credit
Union Chairpersons' Conference, annually. This year, she was asked to
write a piece on Board/Management Relations. A copy of this report was
included in the Board package as informational material.
c. Operations Update
Branch Actions
Ms. Madden reviewed an overhead outlining possible branch solutions to
rumored Digital facility closings.
Branch Reconfiguration
Due to rumored Digital facility closings, Ms. Madden reviewed an overhead
outlining new proposed locations for the branch Pilot Program. Mr.
Gransewicz asked if Digital's ZKO facility would be a potential selection.
Ms. Mann noted that it would be beneficial to utilize the MSO facility in
the program. It was noted that all suggestions would be investigated, the
Digital liaisons would be consulted, and Management would report to the
Board next month.
d. Audit Plan
Mr. Regan reviewed the status of the Management Letter Action Plan. He
noted that any incomplete items will be addressed by the next Board
meeting.
VIII. RECOMMENDATIONS
a. Field of Membership Expansion Procedures
Mr. Regan reviewed a recommendation to approve the following charter
amendment, subject to the final approval of the NCUA Regional Director.
This amendment would allow the credit union the opportunity to immediately
provide credit union services to small occupational groups as long as
established criteria are met. It was further noted that DCU has no
current
plans to expand its field of membership, but this amendment would hasten
the process in some instances if the Board approves such actions in the
future.
Groups of persons with occupational common bonds which are located within
25 miles of the credit union's service facilities, which have provided a
written request for service to the credit union, which do not presently
have credit union service available, and which have no more members in the
group than the maximum number established by the NCUA Board for additions
under this provision: Provided, however, that the National Credit Union
Administration may permanently or temporarily revoke the authority to add
groups under this provision upon a finding, in the Agency's discretion,
that permitting additions under this provision are not in the best
interest
of the credit union, its members, or the National Credit Union Share
Insurance Fund.
* It was moved by Ms. Mann and seconded by Mr. McEachin to approve the
charter amendment as submitted. MOTION CARRIED UNANIMOUSLY.
Board of Directors' Meeting
June 28, 1994
Page - 8
b. Revision to the Investment Policy
Ms. Moran reviewed a recommendation to approve the following change to the
current Investment Policy:
In the Authorized Individuals section, add: "Documented notification to
all investment firms and vendors associated with DCU's investment
activities is required whenever one or more of the individuals holding
these positions change."
* It was moved by Ms. Mann and seconded by Mr. McEachin to approve the
Investment Policy recommendation as submitted. MOTION CARRIED
UNANIMOUSLY.
c. Declaration of Dividends
Ms. Moran reviewed a recommendation that the Board declare and authorize
the payment of dividends for the second quarter of 1994 in the total
estimated amount of $2,063,039, at the rates, terms and conditions
appertaining to each account.
Management also recommends that the Board ratify the dividend rates dated
June 6, 1994.
* It was moved by Ms. Mann and seconded by Mr. McEachin to approve the
recommendations as submitted. MOTION CARRIED UNANIMOUSLY.
d. Changes in Insurance Coverage
Ms. Moran reviewed the following recommended changes to DCU's insurance
coverage:
- Add Deductible of $10,000 on the Basic Bond Coverage
- Lower the Coverage Limit on administration of IRA's from $6,000,000 to
$3,000,000
- Lower the Coverage Limit on Sharedraft Forgeries from $6,000,000 to
$2,000,000
- Lower the Coverage Limit on unauthorized use of Plastic Cards from
$1,000,000 to $500,000
* It was moved by Ms. Dawkins and seconded by Mr. Kinzelman to approve
the recommended changes with the exception of the Plastic Card
recommendation. MOTION CARRIED UNANIMOUSLY.
e. Election
Mr. Cockburn reviewed a recommendation to approve July 14, 1994 5:00 p.m.,
as the cut-off date for member eligibility to vote in the upcoming
election.
* It was moved by Mr. McEachin and seconded by Ms. Mann to approve the
recommendation as submitted. MOTION CARRIED UNANIMOUSLY.
Board of Directors' Meeting
June 28, 1994
Page - 9
f. Loan Policy
Mr. Prindle reviewed a recommendation to lower the second mortgage LTV in
the Business Loan Policy to 70% and to raise the maximum term for new
motorcycles to 48 months.
* It was moved by Mr. Kinzelman and seconded by Mr. Milbury to approve
the
recommendation as submitted. MOTION CARRIED UNANIMOUSLY.
g. Charge Offs
* It was moved by Ms. Mann and seconded by Ms. Dawkins to approve the
charge offs, in the amount of $78,825.29, for the month of June, 1994.
MOTION CARRIED UNANIMOUSLY.
IX. OLD BUSINESS
a. Charter
Mr. Regan explained that the NCUA has approved the BASYS Automations
subsidiary for DCU membership eligibility. The official wording has been
received and must be signed by Ms. Ross.
EXECUTIVE SESSION
ATTORNEY/CLIENT PRIVILEGE
X
X
X
GENERAL SESSION
END ATTORNEY/CLIENT PRIVILEGE
X. NEW BUSINESS
Survey Results
Mr. Kinzelman indicated that two members are interested in reviewing the
results of the last member survey and the closed account survey. Mr.
Cockburn explained that he consulted General Counsel on this matter as
well
as the telephone survey. General Counsel indicated that copies of these
confidential surveys, including the telephone survey, should be made
available to any interested members in connection with the 1994 election.
Litigation Foreclosure Allowance
Mr. Gransewicz requested that management run an analysis on the Allowance
Account for the next Board meeting. Ms. Ross requested that the Finance
Committee look at this figure at their next meeting and report their
findings to the Board.
Board of Directors' Meeting
June 28, 1994
Page - 10
XI. ADJOURNMENT
* It was moved by Ms. Mann and seconded by Mr. McEachin to adjourn the
meeting at 4:45 p.m. MOTION CARRIED UNANIMOUSLY.
_________________________________ __________________________________
Lisa DeMauro Ross, Chairperson Phil Gransewicz, Secretary
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% Subject: Board Minutes, Please post
|
| 2.35 | July 15, 1995 Telephone Vote -- Doscussion in 860 | WLDBIL::KILGORE | DCU 3Gs -- fired but not forgotten | Mon Aug 08 1994 09:28 | 61 |
| From: US2RMC::"[email protected]" 7-AUG-1994 12:40:25.66
To: wldbil::Kilgore
CC:
Subj: Board Minutes, Please post
DIGITAL EMPLOYEES FEDERAL CREDIT UNION
Executive Committee Telephone Vote
July 15, 1994
* It was moved by Mr. McEachin and seconded by Ms. Dawkins to approve
Chairperson, Lisa DeMauro Ross' attendance at two out-of-region
conferences
in 1994. These conferences are: DCU's Annual Strategic Planning
Conference, and the National Association of Credit Union Chairpersons'
Annual Conference. The Officials Travel and Conference Policy states that
if a Board member intends to attend more than one out-of-region conference
each year, it must be approved by the majority of the Executive Committee.
It was noted that all conference arrangements will be canceled in the
event
that Ms. Ross is not re-elected to the Board. MOTION CARRIED.
Committee Member Vote
Tom McEachin Yes
Tanya Dawkins Yes
Phil Gransewicz Unavailable
_______________________________ ______________________________
Lisa M. DeMauro Ross, Philip J. Gransewicz,
Chairperson Secretary
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% Date: Sun, 07 Aug 94 12:34:56 EDT
% Subject: Board Minutes, Please post
|
| 2.36 | July 26, 1994 BoD minutes- Discussion in 880 | ROWLET::AINSLEY | Less than 150 kts. is TOO slow! | Fri Sep 23 1994 14:57 | 449 |
| From: US1RMC::"[email protected]" 23-SEP-1994 09:40:18.84
To: rowlet::Ainsley
CC:
Subj: Board Minutes, July 26, 1994
DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Board of Directors' Meeting
Tuesday, July 26, 1994
The meeting, held in the second floor Training Room of Digital Employees'
Federal Credit Union's (DCU) headquarters facility (141 Parker Street,
Maynard, MA), commenced at approximately 2:35 p.m.
Present: Tanya Dawkins, Treasurer
Phil Gransewicz, Secretary
Paul Kinzelman (via conference call)
Gail Mann
Tom McEachin, Vice Chairperson
Paul Milbury
Also Present: Karen Kupferberg, Supervisory Committee Member
Steve Sherman, Supervisory Committee Member
Staff: Chuck Cockburn, CEO
Stephanie Duggan, Recording Secretary
Tim Garner, Vice President of Marketing
Mary Madden, Vice President of Operations
Betty Moran, Director of Finance
Allan Prindle, Vice President of Lending
Jim Regan, Internal Auditor
Absent: Lisa DeMauro Ross, Chairperson
I. ROLL CALL AND DETERMINATION OF QUORUM
Mr. McEachin noted the following agenda changes:
a. Mr. Melchione, DCU's General Counsel, will be joining the meeting
via conference call at 3:15 p.m.
b. Under RECOMMENDATIONS, add "c. Bylaws"
II. REVIEW OF MINUTES
The Board reviewed the June 28, 1994 Board of Directors' Meeting minutes
and submitted the following changes:
a. Page 1 - add Ms. Ross and Mr. Milbury's names to the list of present
Board members.
b. Page 3 - last sentence, replace "favorable to" with "below".
c. Page 6 - under CMO ANALYSIS, add the conclusion statement from the
Finance Committee Minutes after the last sentence.
* It was moved by Mr. Gransewicz and seconded by Mr. Kinzelman to
remove the Supervisory Committee Report from Executive Session. (Two in
favor: Mr. Gransewicz and Mr. Kinzelman; and four opposed: Mr. McEachin,
Ms. Dawkins, Ms. Mann, and Mr. Milbury) MOTION FAILED.
Board of Directors' Meeting
Tuesday, July 26, 1994
Page - 2
The Board agreed to ask General Counsel if Executive Sessions and
General Sessions may be changed.
* It was moved by Ms. Mann and seconded by Ms. Dawkins to approve the
June 28, 1994 Board of Directors' Meeting Minutes as amended. (Four in
favor: Ms. Mann, Mr. McEachin, Mr. Milbury, and Ms. Dawkins; one
opposed: Mr. Gransewicz; and one abstention: Mr. Kinzelman) MOTION
CARRIED.
Mr. Kinzelman explained that he abstained from the vote because he
needed an answer from General Counsel on the Executive/General Sessions
question.
Executive Committee
The Executive Committee approved the July 15, 1994 Executive Committee
Telephone Vote Minutes as written.
III. FINANCIALS
June Financial Overview
Growth
Loans to members grew $1.4 million in June. While consumer loans
outstanding remained flat, Real Estate loans held increased. Vehicle
loans grew $711,000 and are now growing at an annualized rate of 15.3%.
Additionally, $2.6 million in real estate loans were sold on the
secondary market in June bringing the year-to-date total of real estate
loans sold to $19.3 million. Our real estate servicing portfolio has
grown to almost $80 million.
Total savings for the month increased $15.4 million, partly due to the
month ending on a Thursday (payroll) and to the posting of quarterly
dividends. All shares except IRA's increased.
As of June, total savings annualized growth rate is 8.5%.
Loan Quality
The delinquency ratio rose in June to .36% (up from .29% last month),
but is still well below the budgeted .60%. The charge-off ratio dropped
to .73% (down from .77% in May).
Profitability
Net income for the month was $351,431 which is $117,501 over budget.
This brought net income for the year to $2.5 million which is $224,000
better than budget.
Due to slower than budgeted loan growth, year-to-date loan income is
less than expected. Investment income is somewhat better than expected,
since we have experienced more volume in investments than was budgeted.
On the expense side, both dividend expense and total operating expenses
remained below budget.
Board of Directors' Meeting
Tuesday, July 26, 1994
Page - 3
Capital Ratio
With assets of $362 million as of June 30th, the capital ratio stands at
6.97%.
IV. PRESIDENT'S REPORT
Accountability Map
Mr. Cockburn reviewed the status of his responsibilities and goals with
the Board. The following information was included:
1. Training of Senior Management
2. Quality Team Project List (ongoing and completed)
3. Quality Training Status Report
4. EasyTouch Enhancement Update
5. EasyCash Enhancement Update
6. Debit Card Team Update
7. Phone-a-Loan Update
Mr. Cockburn asked for feedback from the Board. The Board indicated
that they were very satisfied with the CEO Accountability Mapping
approach.
V. COMMITTEE REPORTS
a. Supervisory Committee
(Joe Melchione, DCU's General Counsel, joined the meeting via conference
call.)
EXECUTIVE SESSION
ATTORNEY/CLIENT PRIVILEGE
X
X
X
X
Board of Directors' Meeting
Tuesday, July 26, 1994
Page - 4
X
X
X
X
X
X
X
X
X
Board of Directors' Meeting
Tuesday, July 26, 1994
Page - 5
X
X
X
X
X
X
GENERAL SESSION
END ATTORNEY/CLIENT PRIVILEGE
Mr. Melchione ended his conference call and Management returned to the
meeting at this time.
b. Finance Committee
Ms. Dawkins reported that the committee met on July 21st and reviewed
the following information:
1. June financial highlights
2. Current real estate loan strategies
- credit risk (acceptable)
- collateral risk (acceptable)
- interest rate risk (Mr. Prindle will present alternatives at
the next Finance Committee meeting)
3. Allowance for loan losses
- determined that reserves are adequate and any excess allowance
would be absorbed by adjusting the allowance formula
c. Human Resource Committee
Mr. McEachin reported that the committee met on July 15th and reviewed
the following information:
1. Changes to Vacation Policy for employees regarding borrowing
extra hours
2. Changes to Family Leave Policy
3. Changes to Education Reimbursement Policy
4. 5 exit interview forms - no issues found
Board of Directors' Meeting
Tuesday, July 26, 1994
Page - 6
d. Credit Appeals Committee
Mr. McEachin referred to the report in the Board package which indicated
that the committee did not meet in July.
At 4:20, the Board took a five-minute break.
VI. UPDATES AND DISCUSSIONS
a. Phone Survey
Mr. Cockburn reviewed the Executive Summary of the Telephone Survey on
Member Attitudes and Opinion, prepared by Brad Senden & Associates of
San Ramon, California. The survey was summarized as follows:
1. The largest percentage (36.8%) of the membership see nothing that
they want changed with DCU. The second largest group (33.5%) want
access improved.
2. The members believe there is something special about a credit union.
3. A very large majority (77.8%) believe that the credit union should
base fees on the cost of providing services. A majority (61.6%) believe
that members should be required to pay for the services they use.
4. When asked about subsidizing other members, a large majority (92%)
believes that the members who bounced a check should cover the cost
while 67.8% of the membership agrees that the member with a low balance
checking account should be asked to cover the costs involved in the
account.
5. 73.3% of the members are not aware of the relationship pricing
program. The vast majority (72%) of those that were aware of the
relationship approach, however, believe the practice is appropriate.
The Board requested that Mr. Cockburn provide them with the open ended
comments. It was noted that full survey results have been made
available at DCU headquarters and branches.
b. Election Update
Mr. Cockburn explained that DCU will copy branch election material as
needed for the candidates.
Board of Directors' Meeting
Tuesday, July 26, 1994
Page - 7
c. Marketing Update
Mr. Garner reviewed the status of DCU's current promotions:
1. Mortgages in New States - $223,000 brought in as of July 25th (the
program will continue through August 31st)
2. VISA Activation - 680 applications received
d. Branch Renovation
Ms. Madden reviewed an overhead outlining DCU's planned action in the
event that rumored Digital plant closings take place. She then reviewed
a second overhead explaining the following benefits of renovating the
headquarters branch:
- Add offices for Alternative Investment and Financial Counseling
- Add "Greeter" to enhance queuing in branch
- Improve ATM and branch signage
- Improve accessibility of drive-up ATM
- Reduce reliance on Digital for additional space
- Offer convenient branch services to members located in the Maynard
area
e. Officials Travel and Conference
Ms. Moran reviewed the quarterly Officials Travel and Conference
Attendance Report. Data was compiled through June 30, 1994, totaling
$2,792.16 year-to-date.
f. Credit Scoring Override Report
Mr. Prindle reviewed the Credit Scoring Override Report for the month of
June, 1994. He explained that this report is run to test the model's
effectiveness. He further noted that he is very satisfied with the
model's performance to date. The Board requested that management
perform another analysis when the model has been in place for two years.
They also requested a future analysis of loans approved above the
suggested credit score amount.
g. Audit Action Plan
Mr. Regan explained that all action plan items have been completed and
have been reviewed by the Supervisory Committee.
Board of Directors' Meeting
Tuesday, July 26, 1994
Page - 8
VII. RECOMMENDATIONS
a. Bank Secrecy Act Policy
Mr. Regan reviewed management's recommendation to approve the current
Bank Secrecy Act Policy. It is identical to the previously approved
policy, with the exception of item (1) under the "Record Keeping"
section. The change to this item is based on a recent rule
interpretation by the Treasury Department.
* It was moved by Ms. Dawkins and seconded by Mr. Milbury to approve
the current Bank Secrecy Act Policy. MOTION CARRIED UNANIMOUSLY.
b. Charge Offs
* It was moved by Ms. Dawkins and seconded by Mr. Milbury to approve
the charge offs, in the amount of $99,012.49, for the month of July,
1994. MOTION CARRIED UNANIMOUSLY.
c. Bylaws
Mr. Cockburn explained that the Board must first waive the seven-day
notice of bylaw amendments. The Board unanimously agreed to waive the
seven-day notice of bylaw amendments. Mr. Garner reviewed management's
recommendation to approve the following amendment to Article XVIII,
Section 2(a) of the bylaws. This section defines the term "Members of
their immediate families" contained in the charter.
The recommendation's wording reads:
"Members of their immediate families" includes persons related to
any current member of this credit union by blood, marriage, or
adoption regardless of residence."
The current definition reads:
"Members of their immediate families" includes any relative related
by blood, marriage, or adoption to a DEC or DCU employee who is
presently a DCU member."
This amendment will allow the family of current members no longer in the
common bond to join and use the services of the credit union.
Currently, they can only join while the primary member is still in the
common bond. The current language also excludes family members of BASYS
employees, Digital pensioners and annuitants, and spouses of persons who
died while in the field of membership.
* It was moved by Ms. Mann and seconded by Mr. Kinzelman to approve the
proposed bylaw amendment as written. MOTION CARRIED UNANIMOUSLY.
Board of Directors' Meeting
Tuesday, July 26, 1994
Page - 9
VIII. OLD BUSINESS
Temporary Checks
Ms. Dawkins asked for an update on DCU's Temporary Check Policy. Ms.
Madden explained that, effective immediately, temporary checks would be
handled as follows:
1. Member requesting temporary checks, but has checks on order - no fee
for temporary checks.
2. Member requesting temporary checks with no checks on order -
$1.00/check (may be purchased individually).
IX. ADJOURNMENT
* It was moved by Ms. Mann and seconded by Ms. Dawkins to adjourn the
meeting at 5:15 p.m. MOTION CARRIED UNANIMOUSLY.
_________________________________ ________________________________
Thomas McEachin, Philip J. Gransewicz,
Vice Chairperson Secretary
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% Date: Fri, 23 Sep 94 09:38:40 EDT
% Subject: Board Minutes, July 26, 1994
|
| 2.37 | August 23, 1994 BoD Meeting -- Discussion in 892 | WLDBIL::KILGORE | Help! Stuck inside looking glass! | Tue Oct 11 1994 14:14 | 478 |
| From: US2RMC::"[email protected]" 11-OCT-1994 12:49:07.91
To: wldbil::kilgore
CC:
Subj: August 23rd DCU Board Minutes
DIGITAL EMPLOYEES FEDERAL CREDIT UNION
Board of Directors' Meeting
Tuesday, August 23, 1994
The meeting, held in the second floor Training Room of Digital Credit
Union's (DCU's) headquarters facility, PKO5 (141 Parker Street, Maynard,
MA), commenced at approximately 2:35 p.m.
Present: Tanya Dawkins, Treasurer (via conference call)
Phil Gransewicz, Secretary (via conference call)
Paul Kinzelman (via conference call)
Gail Mann
Tom McEachin, Vice Chairperson
Paul Milbury
Lisa DeMauro Ross, Chairperson (via conference call)
Staff: Chuck Cockburn, President/CEO
Stephanie Duggan, Recording Secretary
Tim Garner, Vice President of Marketing
Mary Madden, Vice President of Operations
Betty Moran, Director of Finance
Allan Prindle, Vice President of Lending
Jim Regan, Internal Auditor
I. ROLL CALL AND DETERMINATION OF QUORUM
Ms. Ross noted the following changes to the agenda:
1. Under PRESIDENT'S REPORT - no business
2. Under COMMITTEE REPORTS - no business
3. Under UPDATES AND DISCUSSIONS - add:
c. Branch Update
d. Operations Update
4. RECOMMENDATIONS will be discussed before UPDATES AND DISCUSSIONS
5. Under OLD BUSINESS - add:
a. XXXXXXXX
6. Under NEW BUSINESS - add:
b. Field of Membership with TRW in California
7. Under RECOMMENDATIONS - add:
b. Addition of Quantum to Field of Membership
II. REVIEW OF MINUTES
The following changes to the July 26, 1994 Board Meeting Minutes were
submitted:
1. Page 6, section VI, letter a, number 5 - Change the first sentence to
read: "73.3% of the members are not aware of the relationship pricing
program."
2. Page 6, section VI, last sentence - Add: "It was noted that full
survey results have been made available at DCU headquarters and branches.
Board of Directors' Meeting
August 23, 1994
Page 2
* It was moved by Mr. McEachin and seconded by Ms. Dawkins to approve the
July 26, 1994 Board Meeting Minutes as amended. MOTION CARRIED
UNANIMOUSLY.
III. FINANCIALS
Ms. Dawkins reviewed the July Financial Overview:
Growth
Loans to members grew $764,214 in July. Consumer loans outstanding grew
$1.3 million, with credit card loans showing the biggest increase.
Although credit cards have not shown positive growth year-to-date, we
still
anticipate annual growth to be in the double digits due to the seasonality
of this product. Real estate loans held in portfolio decreased $500,000
in
July. Real estate loans are now growing at an annualized rate of 6.8%.
Additionally, $1,7 million in real estate loans were sold on the secondary
market in July bringing the year-to-date total of real estate loans sold
to
$21 million. Our real estate servicing portfolio now stands at over $80
million.
Total savings for the month increased $1.9 million. The largest increase
was in checking accounts which grew $2.1 million in July and are growing
at
an annualized rate of 20%. Since the last business day of 1993 was the
same as the last business day of July (Friday), this annualized rate is
not
effected by the day on which July ended.
As of July, total savings annualized growth rate is 8.3%.
Loan Quality
The delinquency ratio dropped slightly in July to .35% (down from .36%
last month), and is still well below the budgeted .60%. The charge-off
ratio dropped to .70% (down from .73% in June).
Profitability
Net income for the month was $556,435 which is $233,738 over budget. This
brought net income for the year to $3.1 million which is $458,000 better
than budget.
Loans continue to grow more slowly than budgeted and as a result loan
income is less than expected. The opposite is true for investments, with
the investment portfolio larger than budgeted and investment income
greater
than expected.
On the expense side, total operating expenses remained below budget.
Capital Ratio
With assets of $365 million as of July 31st, the capital ratio has grown
to
7.04%.
Board of Directors' Meeting
August 23, 1994
Page 3
IV. TEAM PRESENTATION
DCU's VISA Card Team joined the meeting at this time. Team Leader,
Ira Sulzer, introduced the team members: Kelley DeWolf (Customer Service
Representative), Steve Doyle (Computer Operator), Dawn Garrigan
(EFT/Checking Representative), Dawn-Marie Lucius (Customer Service
Representative), and Anne Nelson (Consumer Loan Officer). Mr. Cockburn
was
the team's sponsor and Judy Wax (Branch Manager, Dascomb Road Branch) was
the facilitator.
Mr. Sulzer presented several overheads outlining the following
information:
1. Problem Statement: It takes too long for members to receive a new or
replacement VISA card.
2. Objective: Identify and eliminate delays in the VISA card order
process and reduce the number of days it takes to get a card.
3. Statistical Tools Used: Flow charts of the current process, pareto
charts measuring the number of days it takes to get a new or replacement
card, and surveys of DCU's major competitors regarding fees.
4. Quick Fixes: Change the card order day from Monday to Tuesday - this
immediately improves the average number of days a members must wait for a
replacement card.
Also, the team discovered that Equifax was overcharging, for each card
produced, by $.10 per card. As DCU orders 15,000 cards per year, this
would amount to $1,500 per year in overpayment by DCU.
5. Long-Term Recommendations: VISA card orders should be transmitted
daily, saving an average of 4.1 days and reducing the time by 65%.
Replacement card fees should be eliminated as DCU's major competitors do
not charge a fee for this service. The current policy to not charge a fee
to replace damaged cards should continue and a tag line should be added to
VISA statements to educate members about how to protect their cards from
damage. A senior manager should contact Equifax regarding the per card
overcharge in an effort to recover any overpayment by DCU.
The Board thanked the team for their presentation and the team members
left
the meeting at this time.
Board of Directors' Meeting
August 23, 1994
Page 4
V. RECOMMENDATIONS
a. Field of Membership Expansion
Mr. Garner reviewed a recommendation that the Board of Directors approve
an
amendment to section five of our charter to add Digital-related contract
workers. The amendment would read as follows:
"Employees of Digital Equipment Corporation contractors who work regularly
at Digital facilities in the United States or Puerto Rico."
During the April 27, 1993 Board meeting, management recommended expansion
of the field of membership to include Digital subsidiaries and contract
workers. Addition of subsidiaries was unanimously approved, while
addition
of contract workers was tabled for future discussion.
Since that meeting, Digital announced massive restructuring plans.
Management believes expansion of our field of membership to every
Digital-related group possible under NCUA regulations is a prudent,
proactive response.
An amendment was requested to replace the word "regularly" with "on a
routine basis throughout the year".
* It was moved by Ms. Mann and seconded by Mr. Kinzelman to approve the
recommendation as amended, subject to NCUA approval. (Six in favor: Ms.
Dawkins, Mr. Kinzelman, Ms. Mann, Mr. McEachin, Ms. Ross, and Mr. Milbury;
one opposed: Mr. Gransewicz.) MOTION CARRIED.
b. Addition of Quantum to Field of Membership
As a result of a meeting management attended with Quantum Corporation of
Milpitas, California, regarding their purchase of the Digital operations
in
Shrewsbury and Colorado Springs, management recommended the following:
1. Approval of an amendment to Section 5 of our charter to add "Employees
of Quantum Corporation working in Shrewsbury, Massachusetts, and Colorado
Springs, Colorado". Quantum has sent management a letter requesting
service in these locations. Charter expansion in this area gives
management the option to keep these branches open and ensure continued
convenient access for our members.
X
X
X
Board of Directors' Meeting
August 23, 1994
Page 5
* It was moved by Mr. McEachin and seconded by Mr. Milbury to approve a
charter amendment to add Quantum employees of former Digital facilities to
DCU's field of membership. MOTION CARRIED UNANIMOUSLY.
X
X
X
c. Main Branch Reconfiguration
Ms. Madden reviewed several handouts outlining a proposed headquarters
branch renovation plan:
1. Blueprints outlining existing and proposed conditions:
Offices will be added for Alternative Investments and Financial
Counseling.
A "greeter" will be added to enhance queuing in the branch. An interior
ATM will be installed with 24-hour access. The accessibility of the
drive-up ATM will be improved.
2. Preliminary Project Construction Budget Estimate of $179,420 from
Vitas, Reno and Associates of Chicago.
3. Chart outlining growth needed to breakeven in two years.
Ms. Madden explained that management recommends that the Board approve an
additional capital expenditure of $179,420 to renovate the headquarters
branch.
* It was moved by Mr. McEachin and seconded by Mr. Milbury to approve the
proposed capital expenditure with the intent that management will provide
a
detailed project plan and security analysis as soon as possible. (Six in
favor: Ms. Dawkins, Mr. Kinzelman, Ms. Mann, Mr. McEachin, Mr. Milbury,
and
Ms. Ross; one abstention: Mr. Gransewicz) MOTION CARRIED.
d. Share Policy
Ms. Madden reviewed a recommendation that the Board of Directors approve
the following revision of Section V (Products and Services to DCU
Employees) of our previously approved Share Deposit Account Policy:
The following fees are waived or reduced for Credit Union employees and
were inadvertently omitted from the initial proposal:
1) American Express Gift Cheques for Two: $.50 per $100 (rate reduction)
2) IRA Administration Fee
3) Certified Check
Board of Directors' Meeting
August 23, 1994
Page 6
* It was moved by Mr. Gransewicz and seconded by Mr. Kinzelman that there
be no waived or reduced fees for DCU employees and that they pay the same
fees and service charges as the rest of the membership. (Two in favor:
Mr.
Kinzelman and Mr. Gransewicz; three opposed: Mr. McEachin, Mr. Milbury,
and
Ms. Ross; and one abstention: Ms. Dawkins) MOTION FAILED.
* It was moved by Mr. Milbury and seconded by Mr. McEachin to approve the
recommendation as presented; however, this topic must be included as a
Planning Conference item in terms of a total review of its compensation
issues as well as its philosophical issues. (Four in favor: Ms. Dawkins,
Mr. McEachin, Mr. Milbury, and Ms. Ross; two opposed: Mr. Gransewicz and
Mr. Kinzelman) MOTION CARRIED.
e. EasCorp Agreement
Ms. Moran reviewed a recommendation that the Board adopt a consolidated
version of the following documents:
1) Membership Agreement
2) Settlement Agreement
3) Loan Agreement
4) Security Agreement
She explained that EasCorp has initiated this consolidation and further
noted that it is merely a summary of the existing agreements. No changes
have been made to the content of the agreements.
* It was moved by Mr. McEachin and seconded by Mr. Milbury to approve the
recommendation as presented; however, this topic will be included as a
Finance Committee item for review at their next meeting. MOTION CARRIED
UNANIMOUSLY.
f. Loan Policy
Mr. Prindle reviewed a recommendation that the Board approve enhancements
to DCU's consumer loan products. He explained that the updates will allow
DCU to be more competitive in the recreational vehicle category by easing
up on LTV standards.
* It was moved by Mr. Kinzelman and seconded by Mr. Milbury to approve
the
consumer loan product enhancements for recreational vehicles in the Loan
Policy. MOTION CARRIED UNANIMOUSLY.
g. Charge Offs
* It was moved by Mr. McEachin and seconded by Mr. Milbury to approve the
charge offs, in the amount of $81,619.98, for the month of August, 1994.
MOTION CARRIED UNANIMOUSLY.
The Board agreed that they should look at the $1,428 VISAGOLD item in more
detail at the next Board meeting.
Board of Directors' Meeting
August 23, 1994
Page 7
VI. UPDATES AND DISCUSSIONS
a. Marketing Promotions
Mr. Garner reviewed the following DCU promotion information:
1) VISA Activation Promotion - final results:
o Combined Net Income $51,500
o Combined Loan Volume $1,576,127
o Total Checks Cleared $1,199
2) Current Promotions:
o Home Equity Line Activation ends September 30, 1994
o Mortgages in New States ends August 31, 1994
3) Upcoming Promotions:
o IPI Car Sale in NH and MA - September 15-17, 1994
o Easy Touch Sweepstakes - October 15 through November 30, 1994
4) Changes to Certificate Terms (August 8, 1994): 12-month
products are priced more competitively for members
The Board requested that management look into the possibility of a car
sale
for the entire membership within the next ten days.
b. Conferences
Mr. Cockburn noted that Board conference information was included in the
Board package as reference material.
c. Branch Update
Ms. Madden reviewed an overhead containing updated information, as well as
DCU's plans, regarding the potential closings of several Digital
facilities. The Board agreed to give management the authority to close
DCU's Albuquerque and MRO4 branches assuming that there are no field of
membership expansion opportunities.
d. Operations Update
The Board agreed to table this discussion until the next meeting to enable
management to present the information in writing.
Board of Directors' Meeting
August 23, 1994
Page 8
VII. OLD BUSINESS
a. XXXXXXX
X
X
X
X
VIII. NEW BUSINESS
a. Credit Appeals Committee
Mr. Cockburn reminded the Board that they should bring recommendations for
credit appeals committee candidates to the next Board meeting.
b. Field of Membership with TRW in California
The Board agreed to table this discussion until the next Board meeting.
c. Miscellaneous
Mr. Cockburn provided a handout outlining the upcoming Planning Conference
agenda. He instructed the Board to contact him this week with any
additional Planning Conference items.
He then reviewed the following items discussed at the last Liaison
Meeting:
1) Financials
2) July Branch Update
3) Layoff Assistance Policy
4) Imaging
5) Election Schedule
IX. ADJOURNMENT
* It was moved by Mr. McEachin and seconded by Mr. Milbury to adjourn the
meeting at 5:15 p.m. MOTION CARRIED UNANIMOUSLY.
__________________________________
__________________________________
Lisa DeMauro Ross, Philip J. Gransewicz
Chairperson Secretary
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% Subject: August 23rd DCU Board Minutes
|
| 2.38 | September 27, 1994 BoD Meeting -- Discussion in 902 | WLDBIL::KILGORE | Help! Stuck inside looking glass! | Thu Nov 03 1994 07:48 | 515 |
|
From: US2RMC::"[email protected]" 3-NOV-1994 04:51:26.39
To: send::kilgore, rowlet::ainsley
CC:
Subj: Sept 27th minutes for notesfile
DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Board of Directors' Meeting
September 27, 1994
The meeting, held in the second floor Training Room of Digital Credit
Union's (DCU's) Headquarters Facility (PKO5), 141 Parker Street, Maynard,
MA, commenced at approximately 2:40 p.m.
Present: Tanya Dawkins, Treasurer
David Garrod
Christopher Fillmore-Gillett
Phil Gransewicz, Secretary
Paul Kinzelman (via conference call)
Gail Mann
Tom McEachin, Vice Chairperson
Also Present: Bob Ketz, Supervisory Committee Member
Steve Sherman, Supervisory Committee Member
Joe Melchione, DCU's General Counsel
Staff: Chuck Cockburn, President/CEO
Brian Ducharme, Collections Manager
Stephanie Duggan, Recording Secretary
Tim Garner, Vice President of Marketing
Mary Madden, Vice President of Operations
Betty Moran, Director of Finance
Jim Regan, Internal Auditor
GENERAL SESSION
I. ROLL CALL AND DETERMINATION OF QUORUM
The following changes were made to the agenda:
Prior to the meeting: ORGANIZATIONAL MEETING
a. New Officers
b. Acting President/CEO
c. Search Committee
d. Indemnification of New Board Members
e. Board Meeting Time and Place
f. Next Board Election
g. Planning Conference
Agenda additions:
a. Under UPDATES AND DISCUSSIONS add: g. Legal Update
b. Under OLD BUSINESS add: a. Credit Appeals Committee
c. Under NEW BUSINESS add: b. Check Account Pricing
c. Gainsharing Discussion
d. Letter to Members
Board of Directors' Meeting
September 27, 1994
Page - 2
II. ORGANIZATIONAL MEETING
Only the Board, Mr. Cockburn, and the Recording Secretary remained in the
room.
a. New Officers
* It was moved by Mr. Gillett and seconded by Mr. Garrod to elect
Phil Gransewicz as Chairperson. (Four in favor: Mr. Garrod, Mr. Gillett,
Mr. Gransewicz, and Mr. Kinzelman; three opposed: Ms. Dawkins, Ms. Mann,
and Mr. McEachin.) MOTION CARRIED.
* It was moved by Mr. Garrod and seconded by Mr. Gransewicz to elect
Christopher Fillmore-Gillett as Vice Chairperson. (Four in favor:
Mr. Garrod, Mr. Gillett, Mr. Gransewicz, and Mr. Kinzelman; three opposed:
Ms. Dawkins, Ms. Mann, and Mr. McEachin.) MOTION CARRIED.
* It was moved by Mr. Garrod and seconded by Mr. Gillett to elect
Tanya Dawkins as Treasurer. MOTION CARRIED UNANIMOUSLY.
* It was moved by Mr. Gillett and seconded by Mr. Gransewicz to elect
David Garrod as Secretary. (Six in favor: Ms. Dawkins, Mr. Garrod,
Mr. Gillett, Mr. Gransewicz, Mr. Kinzelman, and Mr. McEachin; one
abstention: Ms. Mann.) MOTION CARRIED.
The following officers were announced and congratulated:
Chairperson: Phil Gransewicz
Vice Chairperson: Christopher Fillmore-Gillett
Treasurer: Tanya Dawkins
Secretary: David Garrod
b. Acting President/CEO
Mr. Cockburn recommended that the Board appoint Ms. Madden and Mr. Prindle
to jointly assume the position of Acting President/CEO. They would
continue in this position from the time Mr. Cockburn leaves DCU until a new
President/CEO is hired. They should receive XXX pay increases during this
time.
* It was moved by Ms. Dawkins and seconded by Mr. Kinzelman to appoint
Mary Madden and Allan Prindle to jointly assume the position of Acting
President/CEO from the time Mr. Cockburn leaves DCU until a new
President/CEO is hired, to approve a XXX pay increase for them during this
time, and to instruct the Human Resource Committee (when formed) to devise
an incentive plan/retention proposal for Ms. Madden and Mr. Prindle.
MOTION CARRIED UNANIMOUSLY.
Board of Directors' Meeting
September 27, 1994
Page - 3
c. Search Committee
Mr. Cockburn recommended that the Board form a President/CEO Search
Committee that will choose and work with a recruiting firm to find DCU's
next President/CEO. The Board agreed and volunteers were solicited. The
following Board members were elected to the Search Committee:
Tanya Dawkins
Christopher Fillmore-Gillett
Phil Gransewicz
Tom McEachin
* It was moved by Mr. Gillett and seconded by Ms. Mann to accept, with
regret, the voluntary resignation of Chuck Cockburn as President/CEO of
Digital Employees' Federal Credit Union. MOTION CARRIED UNANIMOUSLY.
The Board thanked Mr. Cockburn for his dedication over the past three years
and wished him success for the future. It was decided that an official
press release should be put forth regarding this matter as soon as
possible. The Board requested that Mr. Garner prepare a short paragraph,
announcing the results of the election and Mr. Cockburn's resignation, for
immediate release.
d. Board Meeting Time and Place
The management team and both Supervisory Committee members joined the
meeting at this time.
The Board agreed, due to conflicting schedules, that future Board meetings
will be held on the fourth Monday of each month at DCU's Headquarters
Facility, beginning at 4:00 p.m.
e. Planning Conference
The Board agreed to hold DCU's 1994 Strategic Planning Conference on
October 13 & 14, 1994, at Waterville Valley Resort and Conference Center in
New Hampshire.
f. Next Board of Directors' Election
The Board decided to hold the next Annual Meeting on Tuesday, June 20,
1995. The Board requested that management provide them with the entire
1995 Election Schedule at the next Board meeting.
g. Indemnification of New Board Members
In accordance with the DCU Bylaws, Mr. Gillett left the room at this time.
* It was moved by Ms. Mann and seconded by Ms. Dawkins to approve the
indemnification of new Board member, Christopher Fillmore-Gillett. MOTION
CARRIED UNANIMOUSLY.
Mr. Gillett entered the room and Mr. Garrod left the room at this time.
* It was moved by Ms. Mann and seconded by Mr. McEachin to approve the
indemnification of new Board member, David Garrod. MOTION CARRIED
UNANIMOUSLY.
Board of Directors' Meeting
September 27, 1994
Page - 4
III. REVIEW OF MINUTES
Mr. Garrod returned to the meeting at this time.
* It was moved by Mr. McEachin and seconded by Ms. Dawkins to approve the
August 22, 1994, Board Meeting Minutes as written. MOTION CARRIED
UNANIMOUSLY.
* It was moved by Ms. Mann and seconded by Mr. McEachin to approve the
minutes of the September 12, 1994, Phone Vote Minutes as written. MOTION
CARRIED UNANIMOUSLY.
IV. FINANCIALS
Ms. Dawkins thoroughly reviewed the Income Statement, Ratio Table, and
Balance Sheet, for the benefit of the new Board members. The following
report was reviewed:
August Financial Overview
Growth
Loans to members grew $4.8 million in August. Consumer loans grew $2.1
million, and real estate loans held in portfolio grew $2.7 million. The
annualized growth rates are now 6.6% for consumer loans and 10% for real
estate loans.
Additionally, $638,000 in real estate loans was sold on the secondary
market in August bringing the year-to-date total of real estate loans sold
to $21.6 million. Our real estate servicing portfolio stands at over $80
million.
Total savings for the month decreased $15.1 million with August ending on a
Wednesday, the day before payroll is deposited. The largest decrease was
in checking accounts which dropped $10 million in August. The annualized
growth rate for these accounts is relatively flat at negative .5%.
Certificates of deposit continue to grow in this rate environment (14.7%
annualized).
As of August, the annualized growth rate for total savings is .2%.
Loan Quality
The delinquency ratio was .36% (up from .35% last month), still well below
the budgeted .60%. The charge-off ratio dropped to .66% (down from .70% in
July) and is slightly above the budgeted .60%.
Board of Directors' Meeting
September 27, 1994
Page - 5
Profitability
Net income for the month was $1.6 million, mainly due to the receipt of
litigation settlements. Net operating income for August ($436,000) was
$94,000 over budget. Net income for the year is $4.7 million which is $1.7
million better than budget.
Loans continue to grow more slowly than budgeted and as a result, loan
income is less than expected. The opposite is true for investments, with
the investment portfolio larger than budgeted and investment income greater
than expected.
On the expense side, total operating expenses remained below budget.
Capital Ratio
With assets of $352 million as of August 31st, the capital ratio has grown
to 7.76%, an all-time high.
V. PRESIDENT'S REPORT
Mr. Cockburn thanked all credit union officials, management, committees,
General Counsel, and the staff for their hard work and support over the
past three years.
VI. COMMITTEE REPORTS
a. Supervisory Committee Report
Mr. Sherman explained that the committee held a meeting this morning,
during which the following topics were discussed:
1. Legal update by General Counsel
2. August Financials
3. Auditing Firm Proposals
4. Branch Closings
5. Investigations
6. Recommendations to change the Election Rules to be presented at
the November Board meeting.
b. Finance Committee
Ms. Dawkins noted that the committee did not meet and had no report for the
Board.
c. Human Resource Committee
Mr. McEachin noted that the committee did not meet and had no report for
the Board.
d. Credit Appeals Committee
Mr. Gillett noted that the committee did not meet and had no report for the
Board.
Board of Directors' Meeting
September 27, 1994
Page - 6
VII. UPDATES AND DISCUSSIONS
Mr. Ketz left the meeting at this time.
a. Closed Account Survey
Mr. Garner reviewed the results of the Closed Account Survey (March through
June, 1994). The following information was reviewed:
1. Response rate of 18.8% was received (498 responses of the 2,646
questionnaires mailed)
2. Respondent breakdown: 241 didn't have DCU checking and closed
only their memberships, 135 closed only their checking accounts
and remained members, and 122 closed both their checking and
memberships.
3. The vast majority who closed their memberships:
a. no longer work for Digital,
b. have little deposit or loan relationship with DCU, and
c. were generally or completely satisfied with DCU.
It was noted that the full results of this survey would be made available
to the membership at DCU headquarters and branches.
b. Marketing Promotions
Mr. Garner review the following promotional information:
Completed Promotions:
- Mortgages in New States: Combined First Year Net Income = $9,175
Total Loans Generated = $877,861
Current Promotions:
- IPI Car Sale: ends 9/30/94
- HEL Check Promotion: ends 9/30/94
Upcoming Promotions:
- Easy Touch contest in October
- Debit/Check Card promotion in November
- VISA Acquisition promotion during the holidays
c. Quantum Field of Membership Update
X
X
X
X
X
Board of Directors' Meeting
September 27, 1994
Page - 7
d. Board Feedback on Planning Conference Issues
Mr. Cockburn reviewed a list of additional Planning Conference issues
submitted by Mr. Kinzelman. The Board had no other requests for additions
to the Planning Conference agenda.
The Board took a five-minute break at this time and Mr. Sherman left the
meeting. Upon return from break, Mr. Cockburn requested that the Charge
Offs be reviewed at this time, as Brian Ducharme, Collections Manager, is
filling in for Mr. Prindle at this meeting.
Charge Offs
Mr. Ducharme reviewed the charge-off report for the month of
September, 1994.
* It was moved by Mr. McEachin and seconded by Ms. Mann to approve the
charge offs, in the amount of $84,050.92, for the month of September, 1994.
MOTION CARRIED UNANIMOUSLY.
e. Branch Update
Ms. Madden reviewed the following branch recommendations with the Board:
Facility Digital Action DCU Action
Albuquerque Close by year end Close 11/22/94
Mill Vacating by 12/30/94 Close branch 11/22/94
except Building 5
Remove ATM on Main Street
Maintain ATM in Building 5
Boxboro Close 01/31/95 Remove ATM by 01/31/95
* It was moved by Ms. Dawkins and seconded by Mr. McEachin to approve the
above recommendation with the exception of removing the Main Street ATM.
Management will attempt to negotiate with the buyer of the building to
allow the ATM to remain in the Main Street building. MOTION CARRIED
UNANIMOUSLY.
f. Roles/Responsibilities/Policies
Mr. Cockburn provided the board with binders containing information
relevant to the Board of Directors. This information includes bylaws,
policies, and the roles and responsibilities of the Board of Directors and
its committees. This information will be updated as necessary.
Board of Directors' Meeting
September 27, 1994
Page - 8
g. Legal Update
EXECUTIVE SESSION
ATTORNEY/CLIENT PRIVILEGE
X
X
X
X
X
GENERAL SESSION
END ATTORNEY/CLIENT PRIVILEGE
VIII. RECOMMENDATIONS
a. Declaration of Dividends and Rate Ratification
* It was moved by Ms. Mann and seconded by Mr. McEachin to declare and
authorize the payment of dividends for the third quarter of 1994 in the
total estimated amount of $2,084,481, at the rates, terms and conditions
appertaining to each account. This motion also includes the ratification
of the dividend rates dated September 12, 1994. MOTION CARRIED
UNANIMOUSLY.
b. Main Branch Reconfiguration
Ms. Madden noted that the firm responsible for the structural design of the
reconfiguration has assured management that all security aspects of the job
will be in compliance. She also explained that all drawings would be
reviewed by CUNA Mutual Insurance Society (CUMIS) for input. A
presentation regarding this information will be made at the Planning
Conference.
IX. OLD BUSINESS
a. Credit Appeals Committee
Mr. Gransewicz explained that the Credit Appeals Committee members' terms
have expired and the Board must appoint a new committee. Mr. Gillett
submitted the names of two people interested in serving on the committee:
Dan Long and Janet Levy. He explained that he would be unable to further
serve on the committee, due to his election to the Board of Directors.
It was agreed to table this discussion until the next Board meeting. It
was requested that in the meantime, Ms. Dawkins post a VaxNote asking for
any volunteers. The Board unanimously agreed to re-appoint the three DCU
employees to the committee for another term.
Board of Directors' Meeting
September 27, 1994
Page - 9
X. NEW BUSINESS
a. Conference Information
It was noted that volunteer conference information was included in the
Board package as reference material.
b. Checking Account Pricing
* It was moved by Mr. Gillett and seconded by Mr. Garrod to rescind the
assessment and collection of the monthly maintenance fee on DCU share draft
accounts. Commencing September 1, 1994, this fee will not be assessed or
collected on any DCU share draft account, without regard for account
balance or member relationship status. (Five in favor: Ms. Dawkins,
Mr. Garrod, Mr. Gillett, Mr. Gransewicz, and Mr. Kinzelman; two opposed:
Ms. Mann and Mr. McEachin) MOTION CARRIED.
c. Gainsharing Discussion
* It was moved by Mr. Garrod and seconded by Mr. McEachin to re-affirm the
1994 Gainsharing Plan and to carry it out, as documented. MOTION CARRIED
UNANIMOUSLY.
d. Letter to Members
It was agreed that Mr. Garrod would draft a letter to the membership, to be
discussed at the Planning Conference, that includes the following
information:
1. Chuck's Resignation
2. Checking Account Fee Rescission
3. Changes planned pending the Planning Conference
4. Offer for members to return their business to DCU
5. Litigation Update
It was requested that Ms. Dawkins post VaxNotes regarding the following
subjects:
1. Peat Marwick Suit
2. Chuck's Resignation
3. Checking Account Fee Rescission
XI. ADJOURNMENT
* It was moved by Mr. McEachin and seconded by Ms. Mann to adjourn the
meeting at 5:20 p.m. MOTION CARRIED UNANIMOUSLY.
_______________________________ ________________________________
Philip J. Gransewicz David J. Garrod
Chairperson Secretary
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| 2.39 | October 13, 1994 BoD Meeting -- Discussion in 906 | WLDBIL::KILGORE | Survive outsourcing? We'll manage... | Tue Dec 13 1994 10:08 | 246 |
|
DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Board of Directors' Meeting
Thursday, October 13, 1994
The meeting, held in the Nations II Conference Room of the Waterville
Valley Resort and Conference Center, Waterville Valley, NH, commenced at
approximately 7:30 p.m.
Present: Tanya Dawkins, Treasurer
David Garrod, Secretary
Chris Fillmore-Gillett, Vice Chairperson
Phil Gransewicz, Chairperson
Paul Kinzelman
Gail Mann
Tom McEachin
Staff: Chuck Cockburn, President/CEO
Stephanie Duggan, Recording Secretary
Tim Garner, Vice President of Marketing
Mary Madden, Vice President of Operations
Betty Moran, Director of Finance
Allan Prindle, Vice President of Lending
Jim Regan, Internal Auditor
I. ROLL CALL AND DETERMINATION OF QUORUM
Mr. Gransewicz noted the following addition to the agenda:
- Under OLD BUSINESS: a. Gainsharing
II. REVIEW OF MINUTES
The following changes were made to the September 27, 1994, Board Meeting
Minutes:
- Page 8: Move "g. Legal Update" (heading only), out of Executive
Session
- Page 9: Under letter c. Gainsharing, delete "with all
non-operating income to be included in the formula."
It was moved by Ms. Mann and seconded by Mr. McEachin to approve the
September 27, 1994, Board Meeting Minutes as amended. MOTION CARRIED
UNANIMOUSLY.
III. FINANCIALS
Ms. Moran reviewed the following report with the Board:
SEPTEMBER FINANCIAL OVERVIEW
Growth
Loans to members continue to show strong growth with a $4.1 million
increase in September. Consumer loans grew $2.8 million (mainly vehicle
loans), and real estate loans held in portfolio grew $1.3 million. The
annualized growth rates are now 9.5% for consumer loans and 10.7% for real
estate loans.
Board of Directors' Meeting
Thursday, October 13, 1994
Page - 2
Also in September, $725,000 in real estate loans were sold on the
secondary
market bringing the year-to-date total of real estate loans sold to $22.4
million. Our real estate servicing portfolio now stands at over $81
million.
Total savings for the month increased $1.4 million. This growth can be
attributed to quarterly dividends being paid and the month ending on a day
when deposits are at a high level. The largest increase was in checking
accounts which grew $3.5 million in September. The annualized growth rate
for these accounts is now 5%. Certificates of deposit continue to grow
in
this rate environment (12.5% annualized).
As of September, the annualized growth rate for total savings is 1.9%.
Loan Quality
The delinquency ratio is .31% (down from .36% last month), and still well
below the budgeted .60%. The charge-off ratio dropped to .64% (down from
.66% in August), and is slightly above the budgeted .60%.
Profitability
Net income for the month was $491,307 surpassing the budgeted amount of
$261,002. Net income for the year has now topped $5 million reaching $5.2
million which is $1.9 million over budget year-to-date.
Investment income, total operating expenses, and dividend expense continue
to post large positive variances.
Capital Ratio
With assets of $356 million as of September 30th, the capital ratio has
grown to 7.83% which is the highest it has ever been.
The Board requested that non-operating income be separated from net income
to assets and other income to assets on the ratio table for future Board
packages.
IV. COMMITTEE REPORTS
Mr. Gransewicz announced the following Board committee members:
a. Human Resource Committee: Tom McEachin, Phil Gransewicz, and Chris
Fillmore-Gillett
b. Finance/Investment Committee: Tanya Dawkins, Dave Garrod, Chris
Fillmore-Gillett, and Phil Gransewicz
c. Credit Appeals Committee: Topic tabled until next Board meeting. The
Board requested that Mr. Hutchinson be contacted to determine his interest
in serving on the committee for another term.
Board of Directors' Meeting
Thursday, October 13, 1994
Page - 3
V. UPDATES AND DISCUSSIONS
a. Home Equity Loan Promotion
Mr. Garner presented two overheads which provided an update on DCU's Home
Equity Loan Promotion. The results showed a 4.65% response rate with 44
loans generated (totaling $167,349).
VI. RECOMMENDATIONS
a. Signature Authority Resolution
Mr. Prindle explained that, due to Mr. Cockburn's resignation, DCU's
Mortgage Signature Authority Certificate should be updated. In addition
to
Mr. Prindle and Ms. Galligan, Ms. Madden's name should be included in the
certificate as she will be co-Acting President/CEO with Mr. Prindle when
Mr. Cockburn leaves.
* It was moved by Ms. Mann and seconded by Mr. Fillmore-Gillett to
approve
Mortgage signature authority for Mr. Prindle, Ms. Madden, and Mortgage
Operations Manager, Eileen Galligan. MOTION CARRIED UNANIMOUSLY.
b. Charge Offs
* It was moved by Mr. McEachin and seconded by Ms. Dawkins to approve the
charge offs, in the amount of $88,604.92, for the month of October, 1994.
MOTION CARRIED UNANIMOUSLY.
c. Pension Trustee Recommendation
* It was moved by Ms. Mann and seconded by Mr. Garrod to appoint
Mary Madden and Allan Prindle, Acting President/CEOs as trustees of the
Defined Benefit Plan, as one of the previous trustees,
Charles J. Cockburn, President/CEO, has resigned. MOTION CARRIED
UNANIMOUSLY.
VII. OLD BUSINESS
a. Gainsharing
Mr. Gransewicz explained that this topic has been added to the agenda to
provide discussion regarding the subject of including non-operating income
in the 1994 Gainsharing Plan.
Mr. McEachin noted that consistency is important in this decision and
asked
if non-operating income was excluded from the Gainsharing formula in 1993.
Mr. Cockburn noted that non-operating income was not excluded from the
formula in 1993. Mr. McEachin concluded that the integrity of the formula
must be maintained; therefore, non-operating income must be included in
the
1994 plan. Ms. Dawkins added that the Human Resource Committee should
discuss this issue for the 1995 Gainsharing Plan, but it should not be
changed for 1994; non-operating income should be included in the 1994
formula. Ms. Mann agreed.
Board of Directors' Meeting
Thursday, October 13, 1994
Page - 4
Mr. Gransewicz explained that DCU experienced a large windfall, due to the
fraud, which is included in non-operating income. He added that no one
should benefit from fraud and concluded that it would be difficult to
explain the Gainsharing Plan to the membership in that respect. Mr.
Garrod
indicated that he believes it is wrong for non-operating income to be
included in the Gainsharing Plan, but he is also sensitive to policy and
the impact it would have on the employees to change the plan at this
point.
Mr. Kinzelman concluded that he feels non-operating income should be
included in the formula this year only because the employees have the
expectation of receiving the funds included in non-operating income, and
it
should be looked at for next year.
Mr. Cockburn explained that the employees have also suffered from the
fraud. The fraud caused a great decrease in employee moral; however, the
employees have worked hard to improve DCU and have rallied around their
role in improving it. All year, management has taught employees how to
calculate their Gainsharing funds - the formula is simple and easy to
understand. If the Board does not include non-operating income in the
1994
Gainsharing formula, employee moral will definitely decrease and a
substantial amount of trust will be lost. Employees are anticipating that
non-operating income will be included in the formula, as it was last year.
* It was moved by Ms. Dawkins and seconded by Ms. Mann to reaffirm DCU's
Gainsharing Plan for 1994 to include all non-operating income and expenses
and that the Human Resource Committee re-evaluate the formula for 1995 to
ensure it is aligned with the objectives of Gainsharing. (Five in favor,
Ms. Dawkins, Mr. Garrod, Mr. Kinzelman, Ms. Mann, and Mr. McEachin; two
opposed: Mr. Fillmore-Gillett and Mr. Gransewicz) MOTION CARRIED.
VIII. ADJOURNMENT
The Board agreed to adjourn at 8:15 p.m.
___________________________ ___________________________
Philip J. Gransewicz David J. Garrod
Chairperson Secretary
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| 2.40 | October 24, 1994 BoD Meeting -- Discussion in 907 | WLDBIL::KILGORE | Survive outsourcing? We'll manage... | Tue Dec 13 1994 10:09 | 250 |
|
DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Special Board of Directors' Meeting
Monday, October 24, 1994
The meeting, held in the second floor Training Room of Digital Employees'
Federal Credit Union's (DCU's) Headquarters facility (141 Parker Street,
Maynard, MA), commenced at approximately 4:00 p.m.
Present: Tanya Dawkins, Treasurer
David Garrod, Secretary
Christopher Fillmore-Gillett, Vice Chairperson
Philip Gransewicz, Chairperson
Paul Kinzelman (via conference call)
Gail Mann (via conference call)
Tom McEachin
Also Present: Jeffrey Bedigian, NCUA Auditor
Mark Cantor, Acting Supervising Examiner (Boston area)
Robert Trott, NCUA District Manager
Staff: Stephanie Duggan, Recording Secretary
Mary Madden, Vice President of Operations/Acting
President/CEO
Betty Moran, Director of Finance
Allan Prindle, Vice President of Lending/ Acting
President/CEO
Jim Regan, Internal Auditor
I. NCUA
Mr. Trott expressed his appreciation to the Board for holding this special
meeting to discuss the NCUA's concerns regarding the direction of DCU. He
introduced Mark Cantor, the NCUA's Acting Supervising Examiner for the
Boston area (also Mr. Trott's supervisor) and Jeffrey Bedigian, NCUA
Auditor (aided in auditing DCU in the past).
Mr. Trott explained that the NCUA's reason for requesting this meeting was
due to recent publicity concerning the past election. He further noted
that he, Mr. Cantor, and Mr. Bedigian had met with the management of DCU
prior to this meeting. He explained that the NCUA has supported DCU's
direction over the past two years; however, the apparent intent of the new
Board to reduce the pace of capital growth in the future is of concern and
will be addressed at this meeting.
He clarified that he has no problem with the Board somewhat reducing the
pace of capital growth; however, if it is reduced so much that DCU does
not
reach the peer capital levels over the next few years, he feels it will be
detrimental to DCU's future. He noted that there are several concerns
that
he has with DCU's capital needs in the future: sponsor downsizing,
reduction in sponsor subsidy, taxation, internal/external rates, and any
unexpected negative circumstances.
The sponsor, Digital Equipment Corporation, reported a $150 million loss
during its last quarter which may cause the need for further layoffs and
cost cuts. If there is a reduction in sponsor subsidy, DCU's operating
costs will greatly increase. Internal and external rates will negatively
effect the bottom line as they rise and taxation may become a financial
factor for credit unions. Another capital consideration is the unknown -
there must be enough capital to act as a cushion in the event of
unexpected
circumstances.
Special Board of Directors' Meeting
Monday, October 24, 1994
Page - 2
He noted that, as of June, 1994, DCU has $9 million less in capital than
its peers. Although a recent financial windfall has greatly affected
DCU's
capital position, the annualized growth rate is slowing at a more rapid
pace than its peers. He concluded that the Board must continue to work
toward building capital at a rapid pace to enable DCU to remain strong in
the face of its competition and to survive possible external factors in
the
future.
Mr. Gransewicz clarified that it is true that there is an intent to reduce
the level of capital growth, but it is realized that capital must continue
to grow - the growth should not stop. There is an intent to reinvest the
decrease in capital growth to the members in an attempt to stimulate
membership growth. He indicated that the Board has many challenges ahead,
including the stimulation of credit union business, the return to the
roots
of a credit union (bonus dividends/interest rate refunds and the
stimulation of loyalty, business, and expectations), ensuring that the
members' needs are met, and addressing the fact that members consider
doing
business with other institutions.
He further noted that the capital ratio is important, but if there are no
members, capital ratio no longer matters. DCU has completely overhauled
its internal controls since the fraud and the Board realizes that it is
extremely important to maintain them. He explained that the Board
determined that the loan loss provisions were overbudgeted. They have
since been lowered and continue to be adequate. With the downsizing of
Digital, delinquency and charge off rates have inched up, but are still
below peer figures.
Mr. Cantor asked if DCU is actively losing members. Mr. Gransewicz
explained that member runoff is being experienced. Ms. Dawkins explained
that, although member numbers are decreasing, assets are not. Mr. Cantor
asked how many members have been lost. Ms. Madden explained that 7,600
membership closings in 1993 were due to a massive account clean up in
September. At that time, all members with less than $5.00 in their
savings
accounts and no other services were encouraged to activate their
memberships. Some members chose not to bring their accounts up to the
$5.00 required minimum; therefore, their memberships were closed. Also,
members with dormant and escheat accounts were given the opportunity to
activate their DCU memberships. If these members did not respond to this
request, their memberships were also closed. No account closures were
made
without an attempt to contact the member to inform them of their option to
remain in the field of membership.
Mr. Cantor then asked if DCU is planning to either solicit other groups to
join its field of membership or to convert to a community charter. Mr.
Gransewicz explained that field of membership expansion is being
discussed,
but he feels that current membership must be solidified before a major
expansion can be considered. He noted that there are no plans to convert
to a community charter. He further noted that Digital liaisons have made
no indication of any
decrease in subsidy or sponsorship.
Special Board of Directors' Meeting
Monday, October 24, 1994
Page - 3
Mr. Kinzelman indicated that DCU branch access is inconvenient. In this
regard, if members leave their Digital employment, most would tend to
close
their memberships. He noted that a large contributor to this perception
is
the fact that all branches (with the exception of headquarters) are
located
on Digital property. He went on to explain that educating the members
about alternative delivery systems is the key to changing this perception.
He also noted that DCU is moving toward a sales environment in the
branches. Mr. Gransewicz added that 50% of the membership have no branch
access; therefore, DCU's phone system was enhanced as a way to better
serve
these members. Mr. Gillett added that although DCU has closed branches as
Digital downsizes, DCU continues to find creative way to provide service
at
a low cost.
Mr. Cantor explained that he is concerned with the implementation of a
bonus dividend/interest rate refund and asked how much capital the Board
plans to allot for this plan. Mr. McEachin explained that no amount has
been decided. He went on to explain that the membership has elected a
diverse Board which will allow for a thorough discussion prior to any
major
decisions on this subject.
Mr. Cantor explained that the NCUA holds the Board accountable for the
credit union's financial stability and the NCUA must ensure that a firm
financial condition is maintained. He noted that he understands the
desire
to bring members into DCU, but the costs associated with a bonus
dividend/interest rate refund must be carefully considered. The Board
must
do what is good for the financial stability of the entire credit union as
well as focus on what the members desire. He explained that a benefit to
the entire institution is far better than a benefit to a select group of
members. He reminded the Board that an increase in assets and shares as a
result of a sudden and significant increase in membership could dilute
capital much further than the bonus dividend/interest rate refund figure.
Mr. Garrod reiterated that capital growth is important and asked Mr.
Cantor
what he considers to be a bad capital position. Mr. Cantor explained that
the burden of that decision is on the Board - the NCUA makes a judgement
call based on available information thereafter. Mr. Gillett indicated
that
the Board's intention is to move forward and that going backward is
unacceptable. He also noted that there is a concern with having a
gainsharing program for employees and no bonus dividend/interest rate
refund for the membership. He further noted that decisions would not be
made strictly to fulfill political promises. Ms. Dawkins clarified that a
bonus dividend/interest rate refund would be tied to ensuring that DCU
meets its capital goals for the year. Then and only then would a bonus
dividend/interest rate refund be considered.
Mr. Cantor asked about the status of the Board's CEO search. Mr. Gillett
explained that Mark Elliott of Lamalie Amrop International has been hired
to recruit the next CEO. He added that the Board hopes to have a new CEO
at DCU by February or March as it is not positive to go more than a few
months without a CEO. He indicated that he is pleased with the
appointment
of Ms. Madden and Mr. Prindle as co-acting CEOs in the interim. Mr.
Elliott is conducting a national search and will be visiting DCU in the
early part of November.
Special Board of Directors' Meeting
Monday, October 24, 1994
Page - 4
Mr. Gransewicz concluded that DCU's continued profitability should be
attributed to management. He further noted that because of this
profitability, DCU is exposed to less risk and is at a reasonable "comfort
zone" financially. He feels that DCU needs to redirect funds to attract
potential business. Mr. Cantor explained that there is no problem with a
redirection of funds as long as it is properly planned. Mr. Trott
explained that the Board's responsibility is to ensure DCU's future.
There
are 180 employees counting on the Board to ensure that they have jobs to
go
to every day - without employees and a stable credit union, there will be
no services for members.
Mr. Kinzelman asked Mr. Cantor about the level of voter participation in
other credit unions. Mr. Cantor indicated that the participation level
varies; however, the majority of credit unions do not experience a level
as
high as that of DCU. Mr. Trott added that when a credit union is
experiencing problems, voter turnout is much higher. Mr. Kinzelman
explained that he feels the Board's responsibility is to communicate with
the members, thereby leveling the playing field. He indicated that a
large
number of members are interested in DCU's plans, but the Board realizes
that confidential information cannot be shared with the membership.
Mr. Cantor thanked the Board for taking the time to hold this meeting and
the Board thanked Mr. Cantor and his staff for their concern. The meeting
was adjourned at 4:50 p.m.
_____________________________ _____________________________
Philip J. Gransewicz David J. Garrod
Chairperson Secretary
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| 2.41 | November 28, 1994 BoD Meeting -- Discussion in 908 | WLDBIL::KILGORE | Missed Woodstock -- *twice*! | Tue Jan 10 1995 09:25 | 567 |
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DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Board Of Directors' Meeting
Monday, November 28, 1994
The meeting, held in the second floor Training Room of Digital Employees'
Federal Credit Union's (DCU's) Headquarters facility, 141 Parker Street,
Maynard, MA (PKO5), commenced at approximately 4:04 p.m.
Present: Tanya Dawkins, Treasurer (via conference call)
Dave Garrod, Secretary
Chris Fillmore-Gillett, Vice Chairperson
Phil Gransewicz, Chairperson
Paul Kinzelman (via conference call)
Gail Mann
Tom McEachin
Staff: Stephanie Duggan, Recording Secretary
Tim Garner, Vice President of Marketing
Mary Madden, Vice President of Operations & Co-Acting President/CEO
Betty Moran, Director of Finance
Allan Prindle, Vice President of Lending & Co-Acting President/CEO
Jim Regan, Internal Auditor
I. Roll Call and Determination of Quorum
It was noted that Letter "A" under Updates and Discussions would be held in
Executive Session.
II. Review of Minutes
a. October 24, 1994 Special Board of Directors' Meeting
The following amendment was recommended:
* Page 3: change the first sentence to read: "Mr. Kinzelman indicated that
DCU branch access is inconvenient. In this regard, if members leave their
Digital employment, most would tend to close their memberships."
* It was moved by Mr. Fillmore-Gillett and seconded by Mr. McEachin to
approve the October 24, 1994 Special Board of Directors' Meeting Minutes as
amended. MOTION CARRIED UNANIMOUSLY.
b. October 13, 1994 Board of Directors' Meeting
The following amendment was recommended:
* Page 4, last sentence: Replace "as the" with "only because" and replace
"however" with "and".
* It was moved by Ms. Mann and seconded by Mr. McEachin to approve the
October 13, 1994 Board of Directors' Meeting Minutes as amended. MOTION
CARRIED UNANIMOUSLY.
II. Financials
Ms. Moran reviewed the following report with the Board:
October Financial Overview
Growth
Loans to members continue to show strong growth with a $4.1 million increase
in October. Consumer loans grew $1.6 million (mainly vehicle loans), and
real estate loans held in portfolio grew $2.5 million (mainly adjustable-rate
first mortgages). The annualized growth rates are now 10.4% for consumer
loans and 12.5% for real estate loans.
Also in September, $720,000 in real estate loans were sold on the secondary
market, bringing the year-to-date total of real estate loans sold to $23.1
million. This is less than was budgeted for 1994, but real estate loans held
has surpassed budget for the year. Our real estate servicing portfolio
stands at over $81 million.
Total savings for the month decreased $11 million. This decline is partly
due to comparing a Monday (October) with a Friday (September) and also to
quarterly dividends having been posted in September. The largest decrease
was in checking accounts which dropped $5.1 million in October. Certificates
of deposit continue to grow in this rate environment (12.6% annualized).
As of October, the annualized growth rate for total savings is negative 2.5%.
Loan Quality
The delinquency ratio is .35% (up from .31% last month), still well below the
budgeted .60%. The charge-off ratio dropped to .60% (down from .64% in
September), and is equal to the budgeted .60%.
Profitability
Net income for the month was $510,919 surpassing the budgeted amount of $394,
649. Net income for the year totals $5.7 million which is $2 million over
budget year-to-date.
Investment income, total operating expenses, dividend expense, and
non-operating income continue to post large positive variances to budget.
Capital Ratio
With assets dropping to $346 million as of October 31st, the capital ratio
has grown to 8.21%.
III. Field of Membership Presentation
EXECUTIVE SESSION
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GENERAL SESSION
Ms. Dawkins joined the meeting, via conference call, at this time.
IV. Recommendations
a. Supervisory Committee Vacancy
Mr. Gransewicz explained that candidate information for the current vacancy
was included in the Board package for the Board's review prior to this
meeting. Mr. Gillett explained that there are two topics to be discussed
regarding this agenda item: 1) the current vacancy; and 2) the fact that all
committee member terms expire at the same time in April of 1995.
Mr McEachin explained that, considering the fact that all committee member
terms expire in April, he had forwarded a memo to all Board members, prior to
this meeting, asking them to consider asking one or two of the current
committee members to continue beyond April of 1995. This would hopefully
encourage them to volunteer and, if elected, would provide continuity as well
as prevent an entire rollover of the committee. Mr. Gransewicz explained
that it is not necessary to ask the current members if they are willing to
serve now because we will be faced with that decision in April.
Ms. Mann explained that several committee members were treated
disrespectfully by members of this Board and there is a chance that the four
current committee members won't want to volunteer because of this. She
suggested that some rebuilding be attempted by inviting one or two members to
stay on the committee beyond April of 1995. Mr. Gillett asked if they would
be considered preferred candidates. Ms. Mann explained that they would be
considered preferred candidates because continuity is needed to keep the
committee running.
Ms. Dawkins explained that some committee members have expressed feelings
that the Board will not re-appoint them to their positions. She added that
continuity is needed and this message must be sent to the committee members
by the Chairperson and the Vice Chairperson of the Board. Mr. Kinzelman
explained that he does not want to see a full-scale change in April, but he
does not agree with the preferred candidate idea. He feels that Mr. Gillett
and Mr. Gransewicz should contact the current committee members to see if
they are willing to serve again and to encourage them not to make the
assumption that the Board will not re-appoint them to their positions. He
suggested that the Board appoint one person to the committee today, and that
Mr. Gransewicz and Mr. Gillett attend the next committee meeting to talk to
the current committee members, in person, in an attempt to build bridges. He
further noted that he previously recommended a bylaw change to cause the
committee terms to be staggered, which was rejected. He suggested that a
change be made to avoid this situation in the future.
Mr. Gransewicz explained that a long-term solution is needed, but the problem
can't be solved today. Mr. Garrod explained that he wants to see some level
of continuity on the committee and would not be happy if all current
committee members left. He agrees that the committee needs new members, but
there must be some level of continuity. Mr. Gransewicz added that it is up
to each director to take this into consideration when appointments are
necessary. Mr. Gillett agreed to attempt to correspond with the committee
members electronically this week. Mr. Kinzelman urged him to meet with the
members in person, rather than electronically. Mr. Gillett and Mr. Garrod
also agreed to attend the next Supervisory Committee meeting, if time permits
it. Mr. Gransewicz further noted that there has been no Supervisory
Committee representative at any recent Board meetings and that the committee
has met between Board meetings, yet no committee report has been submitted to
the Board. (Ms. Mann left the meeting at this time.)
The following candidates for the current Supervisory Committee vacancy were
noted:
a. Allan Heintz
b. Bill Kilgore
c. Bobbie Pratts
d. Larry Seiler
Mr. McEachin noted that he reviewed the candidate information and has a
question about independence that is difficult to answer strictly from the
statements. He noted that he would prefer the opportunity to interview the
candidates at a Board meeting, as this has been standard practice for past
Supervisory Committee vacancies. Ms. Dawkins also mentioned that a standard
set of questions to be asked of all candidates was agreed upon during a
previous vacancy decision. Mr. Garrod explained that an abbreviated process
has been utilized for this vacancy because the new member would only be
serving for five months - a fuller process will be used in April.
Mr. Gransewicz asked about the status of Steve Behrens as a Supervisory
Committee member. Mr. Regan agreed to look into this matter.
The Board discussed the qualifications of the candidates at this time
* It was moved by Mr. Gillett and seconded by Mr. Garrod that Larry Seiler
be selected to fill the unexpired Supervisory Committee term of Steve Sherman
ending April of 1995. (Five in favor: Ms. Dawkins, Mr. Garrod, Mr. Gillett,
Mr. Gransewicz, and Mr. Kinzelman; one opposed: Mr. McEachin.) MOTION
CARRIED.
V. Committee Reports
a. Supervisory Committee
Mr. Regan explained that the committee discussed the following topics at
their last meeting:
* Reviewed the election guidelines and put together recommendations for
changes to improve them. These recommendations were submitted to General
Counsel for input.
* Reviewed proposals for 1995 auditing firms. This process has been started
earlier than usual to avoid time constraints.
Mr. Gransewicz requested copies of the information sent to General Counsel.
Mr. Regan explained that the Supervisory Committee would present
recommendations to the Board when they are finalized. Copies would be
provided at that time.
b. Finance Committee
Ms. Dawkins reviewed the following report with the Board:
Third Quarter Financial Analysis
In reviewing the Financial Analysis prepared for DCU by SouthWest Corporate
as of September, 1994, DCU's 6-month repriceable GAP was calculated to be
negative 7.5%. SouthWest noted that loans are increasing, with money moving
from investments (lower yield) to loans (higher yield). Since many of our
investments repriced with rates rising, our investment yield has increased.
While our cost of funds is low, we are vulnerable to non-financial
institution competition.
It was also noted that the balance sheet is extending, with loan maturity
increasing from 30 months to 41.3 months. The committee discussed the need
to look at long-term funding and management explained that a CD promotion was
being researched.
With our gross spread widening, our operating expenses remaining flat, and
our other income decreasing (less fee income due to the decline in mortgage
refinancings), the increase in our ROA reflects the large non-operating
income received this year.
The continued growth in Capital was also noted as a positive trend.
Investment Education Session
Louis Page from EasCorp reviewed our investment portfolio, the current
investment strategy (no executions being done right now with loan volume on
the rise), liquidity, and the various reports available to analyze our
existing portfolio.
Cindy Nelson from EasCorp gave an explanation of the services provided by
EasCorp and South West as well as information on CMOs in general, "stress
tests", PSA speeds, and reverse repo transactions.
Treasurer/Committee Roles, Capital Expenditure Policy, Budget
The committee reviewed the roles of the Treasurer and the Finance/Investment
Committee and the Capital Expenditure Policy previously approved by the
committee.
A schedule for the 1995 budget was reviewed and the committee set the
following dates for meetings:
* Monday, 12/12 at 4:00 p.m. to review Rate Assumptions, 5-year Growth
Projections, and the Preliminary Marketing Plan
* Monday, 1/9 to review the Budget
* Friday, 1/13 to approve the final Budget
c. Human Resource Committee
Mr. Gransewicz explained that the committee discussed the following topics at
their last two meetings:
1. Reviewed exit interview forms - no substantial issues found.
2. Reviewed a 401K Plan Summary - update only.
3. Wage/Compensation Team - started researching consultants for 1995.
4. Reviewed proposals/suggestions to the Gainsharing Plan - recommendations
from the committee to the Board in December.
d. Credit Appeals Committee
No meetings were held
e. Search Committee
Mr Gillett explained that the committee's meeting with Mark Elliott on
November 14th was productive and his feedback was positive. He mailed Mr.
Gillett a package outlining his compensation which he forwarded to management
for review and payment. He indicated that Mr. Elliott will forward the
President/CEO position specifications soon. Mr. Gransewicz requested that
Mr. Gillett acquire a timeframe from Mr. Elliott .
VI. Recommendations (continued)
b. Credit Appeals Committee Vacancy
* It was moved by Ms. Dawkins and seconded by Mr. Kinzelman to select Dan
Long and Jack Hutchinson to serve on the Credit Appeals Committee this year.
(Five in favor: Ms. Dawkins, Mr. Garrod, Mr. Gransewicz, Mr. Kinzelman, and
Mr. McEachin; one abstention: Mr. Gillett) MOTION CARRIED.
c. Planning Conference Strategies
* It was moved by Mr. McEachin and seconded by Mr. Dawkins to approve the
Mission, Values, Goals, and Strategies, as amended at the 1994 Strategic
Planning Conference, pending the net and gross capital figures from the
budgeting process. MOTION CARRIED UNANIMOUSLY.
d. Par Value of Shares
Mr. Regan presented an overhead of a histogram of share 1 account balances.
This graph indicated that there have not been many low balance accounts and
that the escheat and autoclose processes have taken care of them in the past.
Therefore, management recommends that the par value of share 1 accounts
remain at $5.00. BOARD CONSENSUS REACHED.
e. Election Schedule
Mr. Regan explained that the Annual Meeting date for 1995 has been changed
from June 20, 1995 to July 18, 1995. This change was made in an effort to
save approximately $30,000 by utilizing DCU's Network newsletter as a
communication tool, rather than implementing a separate mailing to the
membership for election information. BOARD CONSENSUS REACHED.
f. VISA Pricing
Ms. Moran presented overheads outlining DCU's major VISA competitors as of
November 2, 1994, as well as the transaction volume necessary to justify
waiving the annual fee. The information indicated that there must be a
transaction volume of $7,222 per account to justify waiving the annual fee
and showed no competitive pressure to change the pricing. Therefore,
management recommended that VISA pricing remain the same. The Board
requested that management attempt to find a solution to charging a fee to
members who create interchange income by charging large VISA balances, but
pay off those balances each month. BOARD CONSENSUS REACHED.
Ms. Dawkins asked if a Frequent Flyer Program would be implemented in the
future. Ms. Moran explained that Equifax, DCU's VISA carrier, will be
offering this program soon. Management will present this information to the
Board when it becomes available.
g. ATM Fees
Mr. Prindle presented a handout outlining DCU's analysis of ATM fees. The
information indicated that there is a competitive need to waive transaction
fees as it will attract checking accounts and increase deposits. This must
be marketed as a deposit or credit-driven package in accordance with Raddon
financial group survey results and DCU's current position. His
recommendations were to either wait for a new CEO to implement any changes or
to utilize packages that are deposit driven or credit driven and waive 4
transaction per month for those members who hold a minimum of $5,000 in
deposit balances. The Board requested that all options be considered after a
new CEO is hired. They also requested that these options be mentioned during
the CEO interviewing process. BOARD CONSENSUS REACHED.
Ms. Dawkins ended her conference call at this time.
h. DCU Company Vehicle
* It was moved by Mr. McEachin and seconded by Mr. Gillett that DCU hold the
company vehicle, until the new CEO is hired, and use it as a trade-in.
MOTION CARRRIED UNANIMOUSLY.
i. Charge Offs
It was noted that, as requested by the Board at the Planning Conference,
bankruptcies as a percentage of charge offs, for both month and year-to-date,
has been added to the Charge Off Report this month. The Board requested
that, going forward, an indicater should be added to show whether or not
credit scoring was utilized for each loan listed on the report.
* It was moved by Mr. McEachin and seconded by Mr. Gillett to approve the
charge offs, in the amount of $83,198.31, for the month of November, 1994.
MOTION CARRIED UNANIMOUSLY.
VII. Updates and Discussions
b. Planning Conference Action Plan
Ms. Madden reviewed the status of the Planning Conference Action Plan. It
was noted that all items have been addressed and the following information
was included by request of the Board:
* A pie chart showing the membership percentages of Digital and ex-Digital
employees - The percentages were each 50%.
* Alternative Investment Data from member surveys - Reasons for DCU to offer
these investments were: Members are using these services elsewhere, they have
already moved deposits to mutual funds and stocks, it is the new service they
want most from DCU, and investment dollars managed by banks and credit unions
are growing.
* A chart cross tabbing headquarters versus branches on the staff survey
question, "Management does not hold back information" [1 = strongly agree / 5
= strongly disagree] - the results showed that senior management gave an
average rating of 1.5, while the branch staff gave an average rating of 2.93,
as anticipated.
c. Branch Update
Ms. Madden updated the Board regarding DCU's branch situation:
Location Digital Action DCU Action Date
Mill Building Sold Branch closed 11/22/94
- Main Street ATM removed 11/22/94
- Cafeteria ATM moved to lobby 11/22/94
Albuquerque Closed facility Branch closed 11/22/94
ATM removed 11/21/94
Boxboro Building sold Removing ATM 01/10/95
Westfield Building sold Removing ATM 01/31/95
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d. Promotions Update
Mr. Garner presented overheads outlining the following information:
Current Promotions:
* Check Card - November 1 - 7, 1994 (received a handful of cancellation
requests and many requests have come in to issue cards in response to the DCU
solicitation mailing)
* Easy Touch - October - November, 1994 (Activity has greatly increased and
the contest ends this month. O'Rourke and Clark Accountancy Corp. will
decide the winner.)
* VISA Gold Acquisition - October - December, 1994 (491 members accepted
pre-approvals totaling $4.3 million in approved balances with transfer
balances totaling $1.6 million)
* VISA/ACL Holiday Checks - November - December, 1994 (positive feedback
from the members - convenient)
Upcoming Promotions:
* Fall Harvest CD Promotion - November 21 - December 15, 1994 (6.05% Annual
Percentage Yield, 24-month term, $2,500 minimum, mailed to 3,500 members)
VIII. New Business
a. Chairperson's Letter
Mr. Gransewicz provided copies of a Chairperson's Letter he had drafted and
asked for input from the Board within the next few days. Mr. McEachin
requested that a copy of the letter be sent to General Counsel for input as
well. This letter would be a separate mailing to the membership.
IX. Adjournment
* It was moved by Mr. McEachin and seconded by Mr. Gillett to adjourn the
meeting at 8:25 p.m. MOTION CARRIED UNANIMOUSLY.
Philip J. Gransewicz David J. Garrod
Chairperson Secretary
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| 2.42 | December 19, 1994 BoD Meeting -- Discussion in 911 | WLDBIL::KILGORE | Missed Woodstock -- *twice*! | Thu Jan 26 1995 09:01 | 439 |
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DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Board of Directors' Meeting
Monday, December 19, 1994
The meeting, held in the second floor Training Room of Digital Credit Union's
Headquarters facility, (141 Parker Street, Maynard, MA), commenced at
approximately 4:05 p.m.
Present: Tanya Dawkins, Treasurer
David Garrod, Secretary
Christopher Fillmore-Gillett, Vice Chairman
Philip Gransewicz, Chairman
Paul Kinzelman (via conference call)
Gail Mann
Also Present: Larry Seiler, Supervisory Committee Member
Staff: Stephanie Duggan, Recording Secretary
Tim Garner, Vice President of Marketing
Mary Madden, Vice President of Operations & CoActing President/CEO
Betty Moran, Vice President of Finance
Allan Prindle, Vice President of Lending & CoActing President/CEO
Jim Regan, Internal Auditor
Absent: Tom McEachin
I. Review of Minutes
The following changes to the November 28, 1994 Board Meeting Minutes were
submitted:
* Page 3, first paragraph, fifth sentence: Insert "if" after "asked".
* Page 4: Make a note that Ms. Dawkins joined the meeting via conference
call after GENERAL SESSION began.
* Page 4, last paragraph, third sentence: Replace "again" with "now" and
replace "they" with "we".
* Page 4, last paragraph: Strike the last sentence.
* Page 5, first paragraph: Strike the last sentence.
* Page 5, bottom: Add a paragraph referencing Mr. Gransewicz's question
regarding the status of Steve Behrens as a Supervisory Committee member.
* Page 6, First four paragraphs: Redact before issuing minutes to the
membership.
* Page 7, letter b: Change "Ms. Moran" to "Ms. Dawkins".
* Page 8, letter b: Change "opposed" to "abstained".
* Page 10, letter d, under Check Card: add "in response to the DCU
solicitation mailing" to the statement in parentheses.
* It was moved by Mr. Gillett and seconded by Mr. Garrod to approve the
November 28, 1994 Board Meeting Minutes, as amended. MOTION CARRIED
UNANIMOUSLY.
II. Financials
Ms. Dawkins reviewed the following report with the Board:
November Financial Overview
Growth
Loans to members increased $7.7 million in November. Consumer loans grew
$3.5 million (mainly VISA loans), and real estate loans held in portfolio
grew $4.2 million (mainly adjustable-rate, first mortgages). The annualized
growth rates are now 13.2% for consumer loans and 16% for real estate loans.
With no activity in real estate loans sold on the secondary market, the
year-to-date total of $23.1 million was unchanged. This is significantly
less than was budgeted for 1994, but real estate loans held has surpassed
budget for the year. Our real estate servicing portfolio remains at
approximately $81 million.
Total savings for the month decreased $12 million. In comparing November
with October we are comparing a Wednesday (lowest day for savings) with a
Monday. Certificates of deposit continue to grow, now at a 12.4% annualized
rate.
As of November, the annualized growth rate for total savings is negative
6.4%.
Loan Quality
The delinquency ratio is .45% (up from .35% last month), still below the
budgeted .60%. The charge-off ratio dropped to .58% (down from .60% in
October), and is also below the budgeted .60%.
Profitability
Net income for the month was $188,135, which is $180,556 below budget. This
is due to an increase in the provision for loan losses needed as a result of
the rapid growth experienced over the past months. Net income for the year
totals $5.9 million which is $1.9 million over budget year to date.
Investment income, total operating expenses, dividend expense, and
non-operating income continue to post large positive variances to budget.
Capital Ratio
With assets dropping to $339 million as of November 30th, the capital ratio
has grown to 8.48%.
The Board requested that management provide them with an analysis of savings
decline based on recent branch closings. It was also requested that the
Finance Committee discuss the addition of an "Original Purchase Price" column
to the Securities portion of the Investment Portfolio Summary.
III. Committee Reports
a. Supervisory Committee
Mr. Seiler indicated that the following topics were discussed at the last
Supervisory Committee Meeting:
* Supervisory Committee Continuity - The committee agreed to notify the Board
of their agreement that continuity planning is necessary.
* Minutes - Going forward, Supervisory Committee Meeting Minutes will be
submitted to the Board under Executive Session.
* Financial Performance Review - Mr. Regan provided the committee with an
overview. Stock Collateral Inventory Audit results were also made available
to the committee at this time.
* Yearly Agenda - The committee created a yearly agenda for the benefit of
any new Supervisory Committee members.
* Election Rules - The committee agreed that their level of involvement in
the creation and enforcement of election rules and in future Board elections
would be determined by the Board.
* Branch Update - The committee was notified of recent branch closings.
* FaxBack System Update
EXECUTIVE SESSION
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GENERAL SESSION
Mr. Gransewicz asked if Steve Behrens continues to be an active member of the
committee. Mr. Seiler explained that, according to the minutes, Mr. Behrens
has not attended the past six meetings; however, additional meetings have
been held in Executive Session for which no minutes were taken; therefore,
Mr. Seiler could not accurately determine Mr. Behrens' attendance record.
The Board agreed that it is inappropriate that minutes are not recorded for
Executive Session Meetings. Ms. Mann added that detail is an issue; however,
minutes must be taken. Mr. Gransewicz requested that Mr. Melchione be
consulted regarding Supervisory Committee minutes requirements. He further
noted that if Mr. Behrens is not an active committee member, he should
resign. It was agreed that Mr. Gransewicz would draft an official letter to
Mr. Behrens requesting a response concerning this issue.
Mr. Garrod asked if it was procedurally correct that the Supervisory
Committee Minutes could be kept from the Board. Mr. Regan explained that
Supervisory Committee Minutes can be withheld from management, officers, and
the membership. Ms. Dawkins added that the Supervisory Committee oversees
the Board and are not required to share their minutes with the Board. Ms.
Madden explained that an understanding of the roles and responsibilities of
the Supervisory Committee is needed. Mr. Regan agreed to make a
presentation, regarding the roles and responsibilities of the Supervisory
Committee, at the next Board meeting.
Mr. Gillett and Mr. Garrod expressed their apologies to the committee for not
attending their last meeting, as it was perceived at the previous Board
meeting that the two would definitely attend. Mr. Gransewicz indicated that
he has an expectation that all Board members are welcome at all Supervisory
Committee meetings. Mr. Gillett indicated that the independence issue must
be kept clear and that any Board members who choose to attend Supervisory
Committee meetings must do so as guests.
Mr. Gransewicz indicated that the Board would work on a solution to the
continuity planning issue between today and April, 1995.
b. Finance Committee
Ms. Dawkins explained that the committee reviewed the following information
at their last two meetings:
* Marketing Plan Review/Feedback
* Interest Rate Assumptions for the Budget
* Capital spending to date vs. last year's budget
* Investment Policy changes - will be reviewed later in the Board meeting
* Management recommendation for available for sale or holding to maturity
* Next meetings will be January 9 and 13, 1995, to finalize the 1995 Budget
c. Human Resource Committee
Mr. Gransewicz explained that the committee held no formal meeting in
December; however, the committee promoted Betty Moran to Vice President of
Finance.
d. Search Committee
Mr. Gillett explained that the committee has reviewed the President/CEO
Position Statement from Mr. Elliott. The committee has resubmitted the
statement to Mr. Elliott with their changes, all of which should will be
incorporated into the final draft. The committee is currently awaiting
candidate information from Mr. Elliott.
Mr. Kinzelman asked if the President/CEO specifications would be available to
the membership. Mr. Gransewicz indicated that the specifications would not
be published to the membership.
e. Credit Appeals Committee
No December meeting was held.
f. Liaison Meeting
Mr. Gransewicz explained that a DCU Liaison Meeting was held prior to today's
Board meeting, during which the following items were discussed:
* Financials
* Branch Update
* DCU PC loans for non-Digital and non-Apple PCs
* Membership drive via Digital communication vehicles
* Supervisory Committee
Those in attendance were Mr. Gransewicz, Mr. Gillett, Ms. Madden, Mr.
Prindle, Ilene Jacobs, Julie Bova (replaced former liaison, Rob Ayres), and
Molly Brennan (replaced former liaison, Tom Siekman). Mr. Gransewicz
indicated that they would attempt to meet again in March or April of 1995.
IV. Updates and Discussions
a. VISA Pricing
Mr. Prindle reviewed a handout outlining management's research on Patelco's
VISA Preferred Program. Highlights of the program are:
* Let Patelco pay off your other credit card balances
* Have direct deposit and automatic transfer payment to your VISA
* Agree to use only your Patelco VISA in the future
* VISA Gold rate reduced to 11.4% from 14.9%
* VISA Classic rate reduced to 12.4% from 15.9%
Based on the results of this program, DCU's General Counsel feels this
product appears to be very anti-competitive and recommends against this type
of pricing. Also, it is a violation of Regulation Z if members are not
notified prior to a detrimental change in terms, as was the case with
Patelco.
Ms. Madden reviewed an overhead of VISA transaction volume over the past
year. The data showed that repricing our VISA product, based on the amount
or number of charges incurred monthly, would have almost no effect on the
annual fee charged to the membership. Those that would be affected by a
repricing are already having their annual fee waived based on other factors.
b. Branch Update
Ms. Madden reviewed and overhead outlining the following branch action:
Location Digital Action DCU Action Date
Boxboro Building sold Removing ATM 01/10/95
Westfield Building sold Removing ATM 01/31/95
Marlboro 3 Building sold to Removing ATM 03/31/95
Fidelity
Tewksbury Closing facility Removing ATM 01/30/95
X
X
X
X
X
X
X
X
X
X
X
Mr. Garrod asked if there was any update on the Quantum field of membership
question. Mr. Garner explained that he sent a letter to the President of
Technology FCU and received no response. Therefore, a letter has been sent
to the NCUA requesting a ruling on this matter.
c. Promotions Update
Mr. Garner reviewed overheads of the following information:
* Completed Promotions: Easy Touch Sweepstakes ended November 30, 1994:
Edward Wood of Watertown, MA was announced as $500 grand prize winner. The
average number of transactions per month is normally 1,500; this number rose
to 8,000 during the promotion. Also, there were a total of 351,000
transactions performed totaling $14 million.
* Current Promotions:
a) Fall Harvest CD Promotion ends December 15, 1994: To date, the promotion
has generated a total of $1.4 million in CDs
b) DCU Check Card: 52% of all credit union checking accounts now have a
check card. We have experienced 1450 requests for cards in response to the
solicitation mailing. This number represents 12.5% of the number of
solicitations mailed.
c) VISA Gold Acquisition ends December 15, 1994: To date, 633 new accounts
have been opened totaling $2.1 million.
d) VISA/ACL Holiday Checks Promotions end January 15, 1995: Receiving
positive feedback from members.
* Upcoming Promotions:
a) LOC Balance Transfer Promotion - January 3 to February 28, 1995
b) Boat/RV/Motorcycle Loan Sale - February 1 to February 28, 1995 (statement
stuffer)
V. Recommendations
a. Gainsharing
The Board reviewed the 1995 Gainsharing Plan. The following changes were
requested:
* Change the title to read " 1995 Employee Gainsharing Plan" in both
instances.
* Change the first bullet item to read "* Net Income, after paying
Gainsharing expenses, must be greater than 0 to receive Gainsharing."
* Clarify "Short-Term Disability" #5 of the actual plan.
Ms. Dawkins noted that, due to the changes made to the plan, a greater amount
of money will be paid out for Gainsharing for 1995 compared to last year,
provided there is no income loss experienced. Mr. Gillett noted that paying
out more money was the intent of the Human Resource Committee when this new
plan was devised. He further noted that Gainsharing funds would have been
very insignificant in 1994 without the fraud settlement windfall that was
experienced.
Mr. Kinzelman asked how DCU's salaries compare to those of other credit
unions. Ms. Madden explained that management will be working with a
consultant later this year to determine this comparison. She further noted
that DCU strives to be above average in salary offerings.
Mr. Kinzelman asked if a Bonus Dividend/Interest Refund Plan would be
announced with the Gainsharing Plan. Mr. Gillett explained that a Bonus
Dividend/Interest Refund Plan could be approved at a later date; however, the
Gainsharing Plan must be approved before the end of 1994. Mr. Garrod asked
when the Bonus Dividend/Interest Refund Plan will be addressed. It was noted
that development of this plan would commence in January, 1995.
* It was moved by Ms. Dawkins and seconded by Mr. Gillett to approve the
1995 Employee Gainsharing Plan, as amended. MOTION CARRIED UNANIMOUSLY.
b. 1995 Board Meeting Calendar
The Board requested that the Annual Strategic Planning Conference dates be
held in September, rather than the proposed October dates.
* It was moved by Mr. Gillett and seconded by Mr. Garrod to approve the 1995
Board Meeting Calendar, as amended. MOTION CARRIED UNANIMOUSLY.
c. Field of Membership Expansion
EXECUTIVE SESSION
X
X
X
X
X
X
X
GENERAL SESSION
d. Committee Indemnifications
* It was moved by Ms. Mann and seconded by Ms. Dawkins to approve the
indemnification of Dan Long, Credit Appeals Committee Member, and Larry
Seiler, Supervisory Committee Member. MOTION CARRIED UNANIMOUSLY.
e. Investment Policy
Management recommended that the Board approve the Investment Policy with the
following amendments:
* Under Purpose, page 1: add reference to Portfolio Classification section
* Under Purpose, page 2: after Investment Objectives section, add:
While it is the intent of DCU to hold investments to maturity, certain
investments may be classified under FAS 115 as Available for Sale because of
potential liquidity needs, regulatory restrictions imposed by NCUA, and other
factors occurring from time to time. As it is not DCU's intention to buy and
sell investments for profit, DCU is restricted from activities viewed as
trading.
* It was moved by Ms. Mann and seconded by Ms. Dawkins to approve the
Investment Policy, as amended. MOTION CARRIED UNANIMOUSLY.
f. Dividend Declaration/Rate Ratification
* It was moved by Ms. Dawkins and seconded by Ms. Mann to declare and
authorize the payment of dividends for the fourth quarter of 1994 in the
total estimated amount of $1,983,922, at the rates, terms, and conditions
appertaining to each account. It was further moved to ratify the dividend
rates as shown on the current rate sheet, dated December 12, 1994. MOTION
CARRIED UNANIMOUSLY.
The Board requested that a peer group analysis regarding cost of funds be
performed within the next quarter.
g. Charge Offs
It was noted that a credit scoring indicator has been added to the report, as
requested by the Board.
* It was moved by Mr. Gillett and seconded by Mr. Garrod to approve the
charge offs, in the amount of $100,636.30, for the month of December, 1994.
MOTION CARRIED UNANIMOUSLY.
VI. Old Business
EXECUTIVE SESSION
X
X
X
X
X
X
X
X
X
X
X
GENERAL SESSION
VII . Adjournment
* It was moved by Mr. Gillett and seconded by Ms. Mann to adjourn the
meeting at
6:20 p.m. MOTION CARRIED UNANIMOUSLY.
___________________________________________
_________________________________________
Philip J. Gransewicz David J. Garrod
Chairman Secretary
|
| 2.43 | January 12, 1995 BoD Meeting -- Discussion in 912 | WLDBIL::KILGORE | Missed Woodstock -- *twice*! | Thu Jan 26 1995 09:06 | 66 |
|
DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Board of Directors' Meeting
Thursday, January 12, 1995
The meeting, held via conference call, commenced at approximately 3:05 p.m.
Present: Tanya Dawkins, Treasurer
Dave Garrod, Secretary
Chris Fillmore-Gillett, Vice Chairman
Phil Gransewicz, Chairman
Paul Kinzelman
Gail Mann
Also Present: Joseph Melchione, DCU General Counsel
Larry Seiler, Supervisory Committee Member
Staff: Stephanie Duggan, Recording Secretary
Absent: Tom McEachin
I. Waiving of 7-day Notice of Meeting
The Board unanimously agreed to waive the 7-day notice.
II. Callahan & Associates Proposal
The Board agreed that the following issues should be addressed:
* Full evaluation of the credit union, as outlined in the proposal, is not
needed.
* Decide which associate to hire - one person, not a team, for asset
management consulting only (not an acting CEO)
* CEO Search - no need to speed up the process further for fear of a rushed
decision
* DCU Middle Management is excited about this opportunity to work with the
Board - if a team is brought in from Callahan, morale among these managers
will diminish.
* Time frame is too much - 4-6 weeks, full-time minimum is more acceptable
with part-time opportunities beyond the 6 weeks (DCU's discretion)
* Out-of-Pocket Expenses - too open-ended, must be firmed up
* Total Cost - expensive, must be brought down somewhat
* Credit Union League of Massachusetts re: DCU under conservatorship rumor -
politically motivated and must be stopped - Mr. Melchione to contact NCUA and
League
Ms. Mann ended her conference call at this time.
The Board instructed Mr. Gillett to work with Mr. Melchione to revise the
proposal based on the above feedback. When completed, the Board will give
their final approval on the proposal via telephone vote.
* It was moved by Mr. Gillett and seconded by Ms. Dawkins to retain Mike
Riley, of Callahan & Associates, at a price to be negotiated, subject to
telephone approval by the Board. Motion Carried Unanimously.
III. Adjournment
* It was moved by Mr. Gillett and seconded by Mr. Kinzelman to end the
conference call at 3:45 p.m. Motion Carried Unanimously.
__________________________________
__________________________________
Philip J. Gransewicz David J. Garrod
Chairman Secretary
|
| 2.44 | January 7, 1995 BoD Meeting -- Discussion in 919 | WLDBIL::KILGORE | Missed Woodstock -- *twice*! | Tue Mar 14 1995 09:38 | 111 |
| From: US2RMC::"[email protected]" 13-MAR-1995 21:58:25.71
To: wldbil::kilgore
CC:
Subj: Jan 7th DCU minutes - pls post
DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Board of Directors' Meeting
Saturday, January 7, 1995
The meeting, held in the second floor Training Room of Digital Credit Union's
(DCU's) Headquarters facility, 141 Parker Street, Maynard, MA (PKO5),
commenced at approximately 11:00 a.m.
Present: David Garrod, Secretary
Chris Fillmore-Gillett, Vice Chairman
Phil Gransewicz, Chairman
Paul Kinzelman (via conference call)
Gail Mann (via conference call)
Tom McEachin
Also Present: Bob Ketz, Supervisory Committee Member
Karen Kupferberg, Supervisory Committee Chairperson
Staff: Stephanie Duggan, Recording Secretary
Absent: Tanya Dawkins, Treasurer
I. Waiving of 7-day Notice of Meeting
* It was moved by Mr. Gillett and seconded by Mr. McEachin to waive the
7-day notice. Motion Carried Unanimously.
* It was moved by Mr. Gillett and seconded by Mr. Garrod to hold the rest of
the meeting under Executive Session (Four in favor: Mr. Garrod, Mr. Gillett,
Mr. Gransewicz, and Mr. Kinzelman; one opposed: Mr. McEachin). Motion
Carried.
(Ms. Mann joined the meeting at this time.)
EXECUTIVE SESSION (Senior Management Resignations)
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
GENERAL SESSION
IV. Adjournment
At 1:00 p.m., the Board agreed to adjourn the meeting.
_________________________________________
___________________________________________
Philip J. Gransewicz David J. Garrod
Chairman Secretary
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% To: wldbil::kilgore
% Subject: Jan 7th DCU minutes - pls post
|
| 2.45 | January 23, 1995 BoD Meeting -- Discussion in 919 | WLDBIL::KILGORE | Missed Woodstock -- *twice*! | Tue Mar 14 1995 09:41 | 587 |
| From: US2RMC::"[email protected]" 13-MAR-1995 22:16:19.22
To: wldbil::kilgore
CC:
Subj: Jan 23rd DCU minutes - pls post
DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Board of Directors' Meeting
Monday, January 23, 1995
The meeting, held in the second floor Training Room of Digital Employees'
Federal Credit Union's (DCU's) Headquarters facility, PKO5 (141 Parker
Street, Maynard, MA), commenced at approximately 4:00 p.m.
Present: Tanya Dawkins, Treasurer
David Garrod, Secretary
Christopher Fillmore-Gillett, Vice Chairman
Philip Gransewicz, Chairman
Paul Kinzelman (via conference call)
Gail Mann (via conference call)
Tom McEachin
Also Present: Mike Riley, Executive Vice President, Callahan & Associates
Larry Seiler, Supervisory Committee Member
Staff: Stephanie Duggan, Recording Secretary
Tim Garner, Vice President of Marketing
Tom Gray, Real Estate Servicing Manager
Jim Regan, Internal Auditor
Tom Ryan, Operations Manager
I. Roll Call and Determination of Quorum
The following changes were made to the agenda:
* Add: IV. Mike Riley Introduction
* Add to Recommendations: E. DCU General Banking Resolutions, I. Real
Estate Mortgage Sale of Delinquent Note, J. Signature Authority for Student
Loan Contract, and K. Investment Pledge Agreements
* Add to New Business: B. Executive Session
* It was noted that all banking resolutions would be discussed after
Executive Session
II. Review of Minutes
The Board reviewed the December 19, 1994 Board Meeting Minutes and submitted
the following changes:
* Page 1: Indicate that Mr. Kinzelman was on conference call during the
meeting.
* Page 2, under Growth, second paragraph: Add the word "significantly" after
the word "is" in the second sentence.
* Page 3, under GENERAL SESSION, second paragraph: Change the first sentence
to read, "Mr. Garrod asked if it was procedurally correct that the
Supervisory Committee Minutes could be kept from the Board."
* Page 4, under Finance Committee: Change the last bullet to read, "Next
meetings will be January 9 and 13, 1995, to finalize the 1995 budget".
* Page 5, under Liaison Meeting: change the last bullet from "VaxNotes" to
"Supervisory Committee"
* Page 5, under Liaison Meeting: Before the next sentence add, "Those in
attendance were Mr. Gransewicz, Mr. Gillett, Ms. Madden, Mr. Prindle, Ilene
Jacobs, Julie Bova, and Molly Brennan."
* It was moved by Mr. Gillett and seconded by Mr. Garrod to approve the
December 19, 1994 Board Meeting Minutes, as amended (five in favor, one
abstention: Mr. McEachin). Motion Carried.
* It was moved by Mr. Garrod and seconded by Mr. Gillett to approve the
January 12, 1995 Board Meeting Minutes and the January 16, 1995 Telephone
Vote Minutes, as written (five in favor, one abstention: Mr. McEachin).
Motion Carried.
Mr. McEachin abstained from both votes as he was not present at the December
19 meeting or the January 12 meeting. It was noted that the January 16, 1995
Telephone Vote Minutes would not be made available to the membership.
III. Financials
Ms. Dawkins reviewed the December Financial Overview:
Growth
Loans to members increased $3.4 million in December. Consumer loans grew
$1.7 million (mainly VISA loans), and real estate loans held in portfolio
grew $1.7 million (mainly adjustable-rate, first mortgages). The annualized
growth rates are now 13.7% for consumer loans and 16.40% for real estate
loans.
With $306,000 in real estate loans sold on the secondary market, the
year-to-date total increased to $23.4 million. This is significantly less
than was budgeted for 1994, but real estate loans held has surpassed budget
for the year. Our real estate servicing portfolio remains at approximately
$80 million.
Total savings for the month increased $11 million. In comparing December
with November we are comparing a Saturday with a Wednesday. Certificates of
deposit continue to grow, now at a 13.9% annualized rate.
As of December, the annualized growth rate for total savings is negative
2.3%.
Loan Quality
The delinquency ratio is .26% (down from .45% last month), still below the
budgeted .60%. The charge-off ratio increased slightly to .60% (up from .58%
in November).
Profitability
Net income for the month was $231,092, which is $45,096 below budget. This
is due to an increase in the provision for loan losses needed as a result of
the rapid growth experienced over the past months.
Net income for 1994 totals $6.1 million which is $1.8 million over budget.
As compared to budget figures, greater investment income, lower total
operating expenses, lower dividend expenses, and greater non-operating income
was experienced.
Capital Ratio
With assets of $345 million as of December 31st, the capital ratio has
declined to 8.35%.
The decline was also associated with the implementation of FAS 115.
Interest Rates
The Board requested that a rate/volume analysis be performed to determine
where DCU stands relative to competition in this area.
IV. Committee Reports
a. Supervisory Committee
Mr. Seiler indicated that the committee had not met since the last Board
meeting. The committee's next meeting is scheduled for Wednesday, January
25, 1995, at 8:30 a.m.
b. Finance Committee
Ms. Dawkins explained that the committee met on January 9 and 13, 1995. The
following information was included:
* Revised the Marketing Plan
* Reviewed budget assumptions and approved the preliminary 1995 Budget
* Reviewed the proposed Capital Expenditures Budget for 1995
* Reviewed the categorization of $14 million in securities as "Available for
Sale", based on EasCorp recommendations
V. Mike Riley Introduction
Mr. Gransewicz asked Mike Riley, of Callahan & Associates, to join the
meeting. He indicated that Mr. Riley has been at DCU during the past week
and has a report for the Board. Mr. Riley explained that he, along with
three of his partners, has reviewed DCU's investments and investment
structure, cash flows, asset liability, budget, and regulatory issues. He
noted that the staff has been very helpful in providing requested
information. (Ms. Mann joined the meeting, via conference call, at this
time.)
He made the following recommendations to the Board:
1. Investments - DCU has a sophisticated, high quality/low risk portfolio
made up primarily of mortgage-backed securities. There are major staffing
limitations in dealing with the investments at DCU; however, EasCorp is
providing assistance. DCU should consider retaining a second firm, in
addition to EasCorp's Investment Advisory Firm, to provide training for DCU
staff. Costs for this type of service would total $2,500 - $4,000.
2. Available For Sale (FAS 115) - DCU needs to bring more of its portfolio
into the "Available for Sale" category, while utilizing less mortgage-backed
securities.
3. Modest changes need to be made regarding loan and deposit repricing in
part to improve liquidity. He will work with DCU staff over the next week to
make any quick changes.
4. Budget - Some growth rate assumptions should be re-reviewed based on
current interest rate environment requirements and liquidity needs. It will
be difficult to hold the return on assets above 1% with the current pricing
structure. The Board will review the budget today; however, final approval
will not be sought until it has been reworked.
5. Partner - He would like to bring in a partner to aid in an operational
audit regarding ATM clearings, real estate servicing, and loan processing
issues. This will give him a better idea of what the focus of the actual
O'Rourke & Clark audit should be.
6. CEO - It is important that a President/CEO be hired as soon as possible.
He realizes the need for patience in this decision and added that his advice
is available, if needed.
The Board agreed that they would meet with Mr. Riley next week to further
discuss his recommendations. It will be a Finance/Investment Meeting;
however, all Board members will be welcome to attend.
c. Human Resource Committee
Mr. Gransewicz indicated that no January meeting was held.
d. Search Committee
Mr. Gillett gave the following update regarding the President/CEO Search:
The committee held a conference call meeting with Mark Elliott on Friday,
January 20, 1995. They were given a very impressive, 8-person candidate
list. After reviewing their credentials, three candidates were rejected.
Mr. Elliott will schedule face-to-face interviews in February.
e. Credit Appeals Committee
Mr. Gransewicz made note of the end-of-year summary, included in the Board
package.
VII. Updates and Discussions
a. Supervisory Committee Roles and Responsibilities
Mr. Regan provided an overview to the Board. Due to the length of this
meeting, it was agreed that any questions should be forwarded to Mr. Regan.
b. Closed Account Survey
Mr. Garner reviewed the Closed Account Survey Executive Summary with the
Board.
1. General Conclusions - The vast majority of people who closed their
memberships:
* no longer work for Digital
* had little or no deposit relationship with DCU, and
* were generally or completely satisfied with DCU.
2. Primary reasons for closing accounts:
* closed membership only ("leaving Digital" and "DCU inconvenient")
* closed checking only ("no longer worked for Digital", "DCU inconvenient",
and "cost of DCU checking")
* closed checking and membership ("no longer work for Digital", "DCU
inconvenient", and "moved away from
DCU"
3. Relationship Members - Members who closed a checking account were more
likely to meet the "relationship" definition (59%) than those who only closed
a membership (35%). On prior surveys, about 25% of both groups were
"relationship".
4. Median deposit balances - $148 for those that only closed checking, up
237% from he last survey, and $433 for both checking and membership, up 130%.
5. Loan relationships - In the month before closing their accounts, 0% of
members closing only checking had loans (no change), 4% of those closing
memberships only (own from 16% last quarter), and 2% of those closing both
(down from 6%). Members having outstanding loan balances are not likely to
close their memberships until the loans are paid off.
6. Member satisfaction - About 74% of all members closing accounts were
completely or generally satisfied with DCU.
7. Checking elsewhere - 60% of members that closed only checking already had
accounts elsewhere. 34% opened or plan to open new checking accounts.
8. Awareness of "lifetime membership" - 85% of people who closed memberships
were aware they could remain members.
The following requests were made by the Board for future survey reports:
* Show the average balance over the previous 6 months, rather than the
balance at closing.
* Break out the specific credit unions members switch to, as well as the
banks (current information, if available).
c. Promotion Results
Mr. Garner reviewed several overheads with the Board:
* Easy Touch Users Bar Chart: Pre-promotion = 1,544 users, Easy Touch
Promotion = 8,006 users, and Post-promotion = 13,376 users. The information
showed an increase in Easy Touch users since the promotion ended; however,
total transactions went down, slightly, due to the completion of the contest.
* Completed Promotions: Fall Harvest CD Promotion ($2.1 million generated
in deposits; net income = $12,004)
VISA Gold Acquisition ($2.8 million generated in loans; net income =
$71,951)
VISA Holiday Check ($369,652 generated in loans; net income = $13,340)
ACL Holiday Check ($55,691 generated in loans; net income = $1,862)
January CD Offer ($4.2 million generated in deposits; net income =
$22,327)
* Current Promotions: LOC Balance Transfer Promotion (ends February 28,
1995)
* Upcoming Promotions: Boat/RV/Motorcycle Loan Sale (2/1 - 2/28)
IPI Private Auto Sale (3/23 - 3/25 in MA, NH, & CO; other sales in April for
Chicago, DC, San Francisco, Los Angeles, and New York)
Mortgage Acquisition Promotion (3/6 - 6/30)
d. Branch Update
Mr. Ryan reviewed the following branch update:
Location Digital Action DCU Action Date
Tewksbury Closing facility Removing ATM 01/27/95
Westfield Building sold Removing ATM 01/31/95
Headquarters N/A Renovating branch 02/06/95
Marlboro 3 Building sold Removing ATM 03/31/95
New York Down to 270 em Close branch 03/31/95
ployees, continuing
to downsize
X
X
X
X
X
X
X
X
X
X
Mr. Ryan explained that management has received the architectural designs for
the Headquarters branch renovation. A general contractor should be selected
by the end of January and the renovation will begin during the first week of
February. The project will take 6-8 weeks to complete, during which the
branch will remain in operation.
Mr. Garrod asked if offering free ATM access to New York members would be a
possibility in attempting to keep memberships there after the branch is
closed. It was explained that this would not be a possibility because DCU
cannot offer free ATM access to a select group of members. It was noted that
management needed a formal vote to close the New York branch.
* It was moved by Mr. Gillett and seconded by Mr. McEachin to close DCU's
New York branch by March 31, 1995. Motion Carried Unanimously.
e. Consumer Loan Override Report
Mr. Gray distributed updated copies of the report. The Board noted that
nothing significant had been identified.
f. Nominating Committee
Mr. Gransewicz announced the members of the 1995 Nominating Committee:
Alfred Thompson (served last year), Mary Ellen Joyce, and Bill Kilgore. He
indicated that Pat Coyle, Election Coordinator, has contacted each committee
member and the nomination process is underway.
At 6:10 p.m., the Board took a 10-minute break and Ms. Mann ended her
conference call.
g. Discussion of Bonus Dividend/Interest Rate Refund Plan
Ms. Dawkins explained that it was decided at the Planning Conference that a
Bonus Dividend/Interest Rate Refund would be considered based on meeting our
capital goals. At the last Finance/Investment Committee meeting, a
discussion took place as to whether a Bonus Dividend/Interest Rate Refund
should be a budget item to determine its impact on our capital. She further
explained that the Board must decide whether a Bonus Dividend/Interest Rate
Refund will be based on excess earnings or if it will be a budget item.
Mr. McEachin explained that the Board would need to know the financial impact
of a Bonus Dividend/Interest Rate Refund before this decision can be made.
Mr. Gillett noted that a pre-distribution target can be set before receiving
this data.
Mr. Garrod explained that he believes the budget is a statement of goals for
net income. Mr. McEachin disagreed and explained that it is a statement of
capital goals as well. Mr. Garrod disagreed and he further explained that
the Board may consider setting less aggressive capital growth goals in its
strategic plan over the next few years. Mr. Gillett indicated that the Board
cannot dismiss its 5-year strategic plan; however, they need to determine how
aggressive the focus on capital growth should be.
Ms. Dawkins referenced the capital growth goals included in the budget: 8.43%
in 1994 to a projected 9.19% in 1995. She explained that the Board needs to
decide on the basis point increase in capital, keeping in mind that we will
still be below peer at 9%. Mr. McEachin explained that a financial analysis
is needed before the Board can decide what consistent, acceptable capital
growth should be. Mr. Gransewicz disagreed and added that the Board must
establish consistent, measurable growth, attainable in the minds of the
members, and work that growth into the budget.
Mr. McEachin explained that the NCUA has warned DCU about its capital growth.
He added that the Board should be focusing on .4 to .5-point growth in net
capital. Ms. Dawkins indicated that a 45 basis point increase in net capital
would be acceptable to her, keeping in mind that we will still be below peer
and there continues to be risk relative to the sponsor. If the capital goal
is met, 45 basis points would be retained as capital and the remainder would
go to a Bonus Dividend/Interest Rate Refund. Mr. McEachin agreed that .45
would be an acceptable goal, as .2 would be too low. Mr. Gransewicz
indicated that he would be more comfortable in the .3 - .35 range, with the
excess going back to the members in the form of a Bonus Dividend/Interest
Rate Refund.
Mr. Riley explained that the capital goals need to be reset; however, this
cannot be done until other aspects of the budget have been adjusted. He
added that he believes 1995 will be a difficult year to grow capital. Mr.
Garrod explained that the message given to the membership has been: if it is
affordable, a Bonus Dividend/Interest Rate Refund will be given. Mr.
Kinzelman felt the topic should be tabled until actual data can be closely
analyzed. Ms. Dawkins added that a Bonus Dividend/Interest Rate Refund
should not be announced until we are certain that it will be given. Mr.
Gransewicz and Mr. Gillett agreed. Mr. Gillett added that the Board appears
to be in agreement with the particulars of the plan; however, the precise
numbers are still in question. The Board agreed. Mr. Gransewicz added that
the issue of including the plan as a budget item is also still in question.
He added that it would not be a commitment, but only a target, subject to
November data. Mr. McEachin requested that a financial analysis of the Bonus
Dividend/Interest Rate Refund plan be performed and analyzed by the Board as
a part of the budget development.
VIII. Recommendations
(Mr. Seiler left the meeting at this time.)
a. Budget
Ms. Dawkins reviewed the budget, reminding the Board that the numbers would
be reworked according to Mr. Riley's recommendation. A final version of the
budget will be presented to the Board at that time.
b. Pension Plan Trustees
Due to the resignation of the former trustees to our Integrated Defined
Benefit Plan and Trust, Charles Cockburn and Betty Moran, management
recommends that the following individuals be named as pension plan trustees:
Donna Russo, Human Resource Manager and Philip J. Gransewicz, Chairman of the
Board of Directors.
* It was moved by Mr. McEachin and seconded by Ms. Dawkins to name Donna
Russo and Philip J. Gransewicz as pension plan trustees (five in favor; one
abstention: Mr. Gransewicz). Motion Carried.
c. CUSO Officers
Mr. Regan explained that DCU currently has two CUSOs: Capewind Service Corp.
and DCU Land Development Corp. Currently, the only land included in these
CUSOs are lots in Cape Cod, totaling a balance of $0 in DCU's portfolio.
Since future alternative investment offerings would go through a CUSO,
management recommends that they be renewed for a $100/year annual filing fee.
He added that, if the CUSOs are not renewed now, it will be very expensive to
apply for alternative investment CUSOs, when needed.
The current CUSO officers are Mr. McEachin and Mr. Gransewicz. It was
unanimously decided, by the current CUSO officers, to appoint Mr. Garrod as a
replacement for former CUSO officer, Lisa DeMauro Ross.
d. Charter/Bylaw Amendment
Mr. Garner reviewed management's recommendation to approve the adoption of
Section V, within DCU's Charter/Bylaws, in accordance with Article XXI,
Section 1 of the Bylaws. This is required by NCUA to complete the FOM
expansion to include Quantum employees located in Colorado Springs, CO and
Shrewsbury, MA.
Section 5 of the amended charter reads as follows:
" The field of membership shall be limited to those having the following
common bond:
1. Directors and employees of the Digital Equipment Corporation who work in
the United States or Puerto Rico, or who are paid from Maynard,
Massachusetts, except foreign nationals at foreign locations;
2. Employees of BASYS Automation Systems, Inc., a wholly-owned subsidiary of
Digital Equipment Corporation who work in or who are paid from Yonkers, New
York; 1
3. Employees of Quantum Corporation who work in Shrewsbury, Massachusetts,
or Colorado Springs, Colorado; 2
and, also included are spouses of persons who died while within the field of
membership of this credit union, employees of this credit union, persons
retired as pensioners or annuitants from the above employment, members of
their immediate families, organizations of such persons and Digital Equipment
Corporation."
* It was moved by Ms. Dawkins and seconded by Mr. Gillett to approve the
above amendment to DCU's Charter/Bylaws. Motion Carried Unanimously.
Mr. McEachin noted that, due to Digital's recent sale of BASYS Automation
Systems, Inc., section 5, # 2 would need to be updated.
e. Loan Policy Amendment (Computer Loans)
Mr. Gray reviewed an amendment to the Computer Loan section of the Loan
Policy, reflecting the Board's decision that DCU should offer computer loans
for all personal computers. Prior to this amendment, computer loans were
offered for Apple and Digital computers only.
* It was moved by Mr. McEachin and seconded by Mr. Garrod to approve the
loan policy amendment, reflecting the Board's decision that DCU should offer
computer loans for all personal computers. Motion Carried Unanimously.
f. Designation of Voting Representative for NAFCU
* It was moved by Mr. McEachin and seconded by Ms. Dawkins to appoint Mr.
Gransewicz as DCU's voting representative for the National Association of
Federal Credit Unions (NAFCU) (Five in favor; one abstention: Mr.
Gransewicz). Motion Carried.
g. Charge Offs
* It was moved by Mr. McEachin and seconded by Ms. Dawkins to approve the
charge offs, in the amount of $79,907.02, for the month of January, 1995.
Motion Carried Unanimously.
i. Real Estate Mortgage Sale of Delinquent Note
Mr. Gray distributed a recommendation regarding the sale of a mortgage to an
outside company. The borrower has been delinquent since August, 1994, the
property has suffered a 66% loss of value due to location, lead paint is
present in the building, and income information verification of the borrower
is not available.
* It was moved by Ms. Dawkins and seconded by Mr. Gillett to approve the
sale of the above mortgage to an outside company. Motion Carried
Unanimously.
j. Signature Authority for Student Loan Contract
Management recommended that the Board authorize the execution, delivery and
performance of the Nellie Mae Education Loan Purchase Agreement dated January
23, 1995, and documents required or contemplated thereby, and that DCU's Real
Estate Servicing Manager, Thomas Gray, be authorized and directed to approve
and execute on behalf of and as the act of this Credit Union, the New England
Education Loan Marketing Loan Sale Agreement and the necessary and
appropriate documents required thereunder.
* It was moved by Mr. Gillett and seconded by Mr. McEachin to approve the
above Student Loan Contract recommendation. Motion Carried Unanimously.
k. EasCorp Investment Pledge Agreements
Mr. Regan distributed a recommendation regarding the execution of EasCorp
pledge agreements. These agreements are the first step in enabling DCU to
borrow against certain pledged investments, if and when the need arises.
These agreements do not initiate any action by EasCorp; however, these
agreements must be executed well in advance of any borrowing situation to
allow for a smooth process later.
* It was moved by Mr. Garrod and seconded by Ms. Dawkins to approve the
execution of the EasCorp Pledge Agreements. Motion Carried Unanimously.
At 8:10 p.m., the Board asked Mr. Riley, management, and the recording
secretary to leave the room during Executive Session.
EXECUTIVE SESSION
GENERAL SESSION
At 8:25 p.m., Mr. Riley, management, and the recording secretary returned to
the meeting. Mr. Gransewicz announced that the Board had unanimously agreed
to promote Mr. Regan to Director of Finance. He further noted that all
banking resolutions had been approved and signed.
IX. Adjournment
At 8:30 p.m., the Board agreed to adjourn the meeting.
Philip J. Gransewicz
Chairman
David J. Garrod
Secretary
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|
| 2.46 | Discussion in 929 | ROWLET::AINSLEY | Less than 150kts is TOO slow! | Thu Apr 20 1995 09:00 | 553 |
| Digital Employees' Federal Credit Union
Board of Directors' Meeting
Monday, February 27, 1995
The meeting, held in the second floor Training Room of Digital Employees'
Federal Credit Union's (DCU's) Headquarters facility, commenced at
approximately 4:05 p.m.
Present: Tanya Dawkins, Treasurer (via conference call)
Dave Garrod, Secretary
Chris Fillmore-Gillett, Vice Chairman
Phil Gransewicz, Chairman
Paul Kinzelman (via conference call)
Gail Mann
Tom McEachin
Also Present: Larry Seiler, Supervisory Committee Member
Staff: Stephanie Duggan, Recording Secretary
Tim Garner, Vice president of Marketing
Tom Gray, Real Estate Servicing Manager
Jim Regan, Director of Finance
Tom Ryan, Operations Manager
I. Review of Minutes
The Board reviewed the January 23, 1995 Board Meeting Minutes. The following
changes were submitted:
* Page 2, Financials, Growth, second paragraph, second sentence: add the
word "significantly" before the word "less".
* Page 2, Financials, Profitability, first paragraph, last sentence: make
this sentence the first of the next paragraph. It now reads: "Net income for
1994 totals $6.1 million, which is $1.8 million over budget".
* Page 2, Financials, Profitability, second paragraph, last sentence: change
to read "As compared to budget figures, greater investment income, lower
total operating expenses, lower dividend expenses, and greater non-operating
income was experienced."
* Page 2, Financials, Capital Ratio: before the last paragraph, add a
heading of "Interest Rates".
* Page 3, under Mike Riley Introduction, #3, first sentence: add "in part to
improve liquidity" to the end of the sentence.
* Page 3, under Mike Riley Introduction, #4, first sentence: replace "don't
make sense" with "should be re-reviewed based on current interest rate
environment requirements and liquidity needs".
* Page 7, third paragraph, last sentence: replace "prior to its consideration
as a budget item" with "as a part of the budget development".
* It was moved by Mr. Gillett and seconded by Mr. McEachin to approve the
January 23, 1995 Board Meeting Minutes, as amended. Motion carried
unanimously.
The Board reviewed the January 7, 1995 Board Meeting Minutes and submitted
the following change:
X
X
X
It was noted that minutes will be submitted to the Board for changes one week
prior to each Board package mailing. All changes will be incorporated and
highlighted in the Board package version.
* It was moved by Mr. McEachin and seconded by Mr. Garrod to approve the
January 7, 1995 Board Meeting Minutes, as amended. (One abstention: Ms.
Dawkins) Motion Carried.
Ms. Dawkins abstained from the vote as she was not present at the January 27
meeting.
II. Financials
An updated version of the January Financial Overview was provided to the
Board. Ms. Dawkins reviewed the following with the Board:
Growth
Loans to members increased $3.3 million in January. Consumer loans remained
relatively stable (declined $.2 million) primarily due to the retention of
the credit card growth experienced in December. Typically, the seasonality
of this product results in significant balance reductions in the first few
months of the year.
Real estate loans held in portfolio grew $3.5 million. This growth was all
in the adjustable-rate mortgage portfolio. The fixed and home equity
portfolios remained unchanged.
Total savings for the month declined $12.5 million. Shares, money market,
and checking accounts declined a combined $16.1 million, with the largest
portion attributed to checking ($9.6 million). Certificate balances continue
to grow ($4.0 million), now at a 196% annualized rate.
Based upon the increase in loans and decline in deposits, the credit union's
liquidity position has tightened. Management will continue to monitor this
on an ongoing basis.
Asset Quality
The delinquency ratio is .30% (up from ,26% last month), still below the
budgeted .60%. The charge-off ratio decreased to .36% (down from .60% in
December). The unrealized loss on Available for Sale investments was
$377,452 as of month end. This represented a decline of $56,120, as compared
to the balance as of year end.
Profitability
Net income for the month was $476,733, which is $58,660 above budget. Our
net spread for the month was 449 basis points, as compared to 414 basis
points for all of 1994. This was due to the higher than anticipated loan
volume and lower than anticipated deposit volume. As a result, loan interest
income was higher than budget and dividend expense variances were lower than
budget.
Ratios
With assets of $334,453 million as of January 31st, the capital ratio has
increased to 8.73%.
Net Capital
It was noted that net capital figures should be noted on the overview, going
forward.
III. Committee Reports
a. Supervisory Committee
Mr. Seiler gave the following update to the Board regarding the committee's
January 25 meeting:
* The committee is concerned with certain budget assumptions. Ms. Kupferberg
may be contacted for clarification of these concerns.
* Mike Riley gave a presentation to the committee, similar to his
presentation to the Board.
* The committee hopes that the issues surrounding Board members attending
Supervisory Committee meetings have been resolved.
* Meeting Minutes - Mr. Seiler indicated that the committee feels that
minutes need not be taken for Attorney/Client Privilege issues. He further
noted that Joe Melchione, DCU's General Counsel, informed the committee that
there is no law requiring the Supervisory Committee to take minutes for
Attorney/Client Privilege issues. It was also mentioned that the committee
will be holding no Attorney/Client Privilege meetings before April of 1995;
therefore, because all committee member terms expire in April, this topic may
be tabled until the new committee is formed.
Mr. Gransewicz indicated that a ruling on this subject is needed from the
NCUA. Mr. Regan explained that the NCUA also has no access to
Attorney/Client Privilege minutes. Mr. Seiler explained that there are no
records of any of the Supervisory Committee's Attorney/Client Privilege
meetings or of the decisions made therein. Ms. Mann asked if these were
actual meetings, or merely conversations between committee members. Mr.
Seiler clarified that these were actual meetings during which decisions were
made. He added that there are simpler ways to acquire a ruling on this
subject than asking the NCUA. Ms. Mann agreed and added that she would have
to speak with Ms. Kupferberg before she could make a decision on this issue.
She added that, personally, she would record that an Attorney/Client
Privilege meeting took place; however, the subject might not be disclosed
based on the situation.
* The Committee has had no response from Mr. Behrens regarding his status as
a committee member.
* The committee feels that, in the future, a CPA is needed to fill the
Internal Auditor position. Mr. Regan explained that the employee temporarily
filling the Internal Auditor position has an excellent understanding of the
credit union as well as a reasonable understanding of internal controls. He
further noted that the Supervisory Committee informed him that the new
committee would conduct a search for a candidate to permanently fill the
position. Mr. Seiler indicated that the committee is comfortable with the
temporary employee at this time.
* Annual Report - the Supervisory Committee Report contained within the
Annual Report contains only the facts of the committee's official role in the
credit union.
* Next meeting - March 23rd at 8:30 a.m. to discuss the external audit
procedures.
* Special Board Meetings - Mr. Seiler asked if the Supervisory Committee
should be informed of Special Board meetings. The Board agreed that the
committee should definitely be informed of all Special Board meetings.
* Term Expirations - Mr. Seiler asked if the current committee members' terms
expire on April 1, or April 30, 1995. Mr. Gransewicz noted April 30, 1995 as
the expiration date.
Ms. Dawkins asked about the status of staggering the committee member terms.
It was noted that terms can be staggered, but not according to the
traditional method. The Board would have to appoint a minimum of 3 members
this year, another member in 1996, and another in 1997.
EXECUTIVE SESSION
X
GENERAL SESSION
b. Finance Committee
Ms. Dawkins explained that the committee has met twice since the last Board
meeting. She gave the following update on the two meetings:
January 20, 1995:
Mike Riley of Callahan & Associates gave the committee an economic overview
of the financial industry. He indicated that DCU is not alone in its reduced
liquidity and increased loan demand situation. He reviewed cash flows and
noted a $23 million outflow at DCU over the past 6 months. The committee
reviewed options to improve liquidity and came to the consensus that stemming
the outflow of deposits is the cheapest alternative. The committee then
reviewed management's recommendations on deposit rate increases and loan rate
increases as well as the impact these changes would have on the budget.
February 10, 1995:
EasCorp representatives Emily Hollis and Cindy Nelson were present and
presented EasCorp's review of DCU's current financial situation.
c. Human Resource Committee
Mr. Gransewicz explained that the committee met prior to today's Board
meeting and discussed the following topics.
* Exit Interview forms - nothing significant found
* Two employee terminations
* Salary survey and review performed by the Human Resource Department
* Staffing
* Open legal personnel issues
d. Search Committee
EXECUTIVE SESSION
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
GENERAL SESSION
4. Credit Appeals Committee
The minutes of the January 25 Credit Appeals Committee meeting were
distributed to the Board. One credit appeal request was reviewed and the
committee decided to uphold the decision of the loan officer.
IV. Updates and Discussions
a. Rate/Volume Analysis
Mr. Regan reviewed an overhead outlining the reasons that DCU was over budget
on loan income for the year and under budget for dividend expense for the
year.
The Board requested that a graph of the competition's average rates, as a
compared to DCU ,be included in the Board package going forward.
b. Promotion Results
Mr. Garner reviewed the following information with the Board:
Completed Promotions:
* February 5-month Certificate Offer: $4.1 million generated in deposits;
$17,224 generated in net income
Current Promotions:
* LOC Balance Transfer Promotion: ends February 28
* Boat/RV/Motorcycle Loan Sale: February 1 to February 28
* Savings Letter Promotion: February 10 to February 24
* Mass Savings Promotion: February 20-23 to March 19
Upcoming Promotions:
* 9-Month Certificate Promotion: tentative for March 6 to 17
* Certificate Rollover Bonus Offer: dates to be determined
* IPI Private Auto Sales: March 23 to 25 in MA, NH, and CO. Other sales in
April for Chicago, DC, San Francisco, Los Angeles, and New York
* Membership Drive: April and May
c. Branch Update
Mr. Ryan reviewed the following information with the Board:
The Headquarters Branch Renovation Easel was brought into the meeting to
illustrate the changes taking place in the headquarters branch. This easel
will be displayed in the branch for the members' information throughout the
renovation process. The Board requested that management look into
modernizing the new headquarters ATM.
Location Digital Action DCU Action Date
Headquarters N/A Renovating Branch 2/21/95
New York Downsizing staff - Closing Branch 3/16/95
lack of usage at
branch
Marlboro 3 Building sold to Removing ATM 3/31/95
Fidelity
Merrimack 2 Closing facility Remove ATM 6/30/95
X
X
X
X
X
X
X
X
X
X
X
X
X
V. Recommendations
a. Budget
Mr. Regan explained that management continues to work through the budget.
When it is completed to their satisfaction, the Finance/Investment Committee
will review it at their March meeting. The budget will be presented to the
Board at the March 27 meeting.
At 6:00 p.m., the Board took a 5-minute dinner break.
l. Investment Signature Authority
It was explained that currently, the Investment Signature Authority
guidelines requires that two authorized signatures must be acquired before a
transaction can take place. Currently, there are only two authorized
signers. By adding a third signer, a cushion will be in place for instances
where one signer is unavailable.
* It was moved by Mr. McEachin and seconded by Ms. Mann to expand the
Investment Signature Authority to include Mr. Gillett as being allowed to
enter into investment transactions within credit union guidelines. (Six in
favor, one abstention: Mr. Gillett.) Motion Carried.
b. Marketing/Education of Remote Members
Remote Access Promotion Efforts:
Mass Savings Promotion: Mailed February 22
Membership Drive: Starts in April
Remote Access Brochure: March/April Completion
Remote Access Promotion: Starts in May
ACH Letters: Start in March
c. Expanding Hours of Operation
Management had planned to test either the Merrimack branch or the Hudson
branch with new, extended hours on Thursday evening and/or Saturday morning.
This decision was made based on household concentration in these areas. The
Board requested that the headquarters branch be utilized as a test site for
the extended hours. The test could coincide with the re-grand opening of the
renovated branch and access would be much greater in this location.
The costs associated with the expansion would be minimal - approximately
$8,500 annually for three tellers to work 6 hours of overtime each week.
After the testing period, three permanent, part-time tellers would be hired
to fill these positions. The Board requested that management look internally
to fill these positions to continue to provide the same quality service.
d. Expand Delivery Systems
Information Center - Management decided not to expand Information Center
hours as the total number of calls drastically drops after 4:00 p.m. and 80%
of DCU's members live in the Eastern time zone.
e. Check Hold Policy
Management has determined that no changes to the Check Hold Policy are
necessary at this time. It was noted that recently, the maximum business
check amount allowable before a hold is necessary was modified from $2,000 to
$3,000 (effective 1/1/95). Also, the non-local check hold time window had
previously been reduced to four days. A sampling showed the vast majority of
checks deposited in June of 1994 required no hold (97.45% personal and 99.77%
business).
f. Electronic Delivery System Enhancements
Internet Access:
Management has decided to utilize Intuitive Information Inc. (iii) to provide
24-hour electronic access to DCU information through World Wide Web.
Information included: rate information, promotional information, DCU news,
applications (loans, deposits, memberships). The costs for this service are
relatively small and the service start-up target time frame is April, 1995.
This time frame will allow for thorough negotiations with iii and the
adequate education of the staff.
FAX-on-Demand:
This service will allow members to retrieve DCU information through a
touch-tone telephone and FAX machine. Information included: rates,
promotional material, and applications (loan, deposit, membership). Sprint
would be utilized for the initial start-up of the service; however,
management would eventually incorporate it into DCU's audio response system.
The time frame for this service is similar to that of the Internet service
and would be rolled out as a package with the Internet service.
Phone-a-Loan:
This service would enable members to apply for a loan using a touch-tone
telephone. Creative Solutions would be utilized for the initial start-up of
this service; however, management would eventually incorporate it into DCU's
audio response system. The time frame for this service is a few months from
notification.
Home-Banking:
This service will enable members to perform inquiries and transaction from a
terminal or PC/Workstation - bill payment may be included in this access.
CFI and Re:member Data Services would be utilized to provide this service.
Xerox Credit Union is implementing this service in February or March -
management plans to consult them before plans to implement this service move
forward.
g. Pricing
Mr. Garner reviewed management's recommended changes to DCU's current pricing
structure:
Product Current Pricing Proposed Pricing
Member-Described $2.00 - free if balance is FREE
Savings: >/=$100 or relationship
member
Primary Savings: $3.00 - free if relationship FREE
member (limit 3/month)
(limit 3/month due to
Regulation D)
Holiday Club Early $5.00 FREE
Closing: (withdrawals anytime -
account closed may not
be reopened until 11/1)
IRA Administrative $15.00 with first account FREE
Fee: (one-time fee)
Demand Statement: $2.00 1 FREE/month
$2.00 each additional
Copy of DCU Check: $1.00 2 FREE/month
$1.00 each additional
--------------------------------------------------------X
X
X
X
X
X
X
X
(Ms. Mann left the meeting and Ms. Dawkins ended her conference call at this
time.)
X
X
X
X
X
X
X
g. Operational Review
Mr. Ryan explained that management consulted with O'Rourke, Clark, & Sacher
about the possibility of performing an operational review for DCU.
Management believes that buy-in from the new CEO is crucial to the process;
however, they have acquired proposals from various vendors. Mike Riley, of
Callahan & Associates, and Mike Sacher, of O'Rourke, Clark & Sacher,
recommended the MOEBS Corporation for this type of review. The approximate
cost for this process would be $5,000 - $6,000 for a one-day consultation.
The Board instructed management to gather consultant data for the new CEO's
review; however, no decision will be made to hire a consultant until the CEO
is hired.
h. Election Rules/Dates
Due to time constraints at this meeting, the Board decided to table this
subject until the next meeting.
i. Nominating Committee
Mr. Gransewicz informed the Board that the Nominating Committee has asked the
Board to forward any names of members interested in serving on the Board.
The application deadline was Friday, February 24 at 5:00 p.m. The committee
has received only one application; however, the committee must nominate two
candidates - one for each open position.
j. EasCorp Annual Meeting Voting Resolution
* It was moved by Mr. McEachin and seconded by Mr. Gillett to appoint James
Regan as DCU's representative to EasCorp. He shall be empowered to attend
the annual meeting, vote, and stand for election. Motion Carried
Unanimously.
k. Charge Offs
* It was moved by Mr. McEachin and seconded by Mr. Gillett to approve the
charge offs, in the amount of $74,611.74, for the month of February, 1995.
Motion Carried Unanimously.
VI. Adjournment
* It was moved by Mr. Gillett and seconded by Mr. McEachin to adjourn the
meeting at 8:05 p.m. Motion Carried Unanimously.
Philip J. Gransewicz David J. Garrod
Chairman Secretary
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|
| 2.47 | March 27, 1995 BoD Meeting -- Discussion in 932 | WLDBIL::KILGORE | Missed Woodstock -- *twice*! | Fri May 05 1995 08:41 | 477 |
|
Digital Employees' Federal Credit Union
Board of Directors' Meeting
Monday, March 27, 1995
The meeting, held in the second floor Training Room of Digital Employees'
Federal Credit Union's (DCU's) Headquarters facility, commenced at
approximately 4:10 p.m.
Present: Tanya Dawkins, Treasurer
Dave Garrod, Secretary
Chris Fillmore-Gillett, Vice Chairman
Phil Gransewicz, Chairman
Paul Kinzelman (via conference call)
Gail Mann
Tom McEachin
Also Present: Mike Riley (consultant), Callahan & Associates
Larry Seiler, Supervisory Committee Member
Staff: Stephanie Duggan, Recording Secretary
Tim Garner, Vice President of Marketing
Tom Gray, Real Estate Servicing Manager/Acting Vice
President of Lending
Jim Regan, Director of Finance,
Tom Ryan, Operations Manager/Acting Vice President
of Operations
I. Review of Minutes
The Board reviewed the February 27, 1995 Board Meeting Minutes and submitted
the following changes:
* Page 2: Make the last sentence before II. Financials part of the
abstention above. Also, change the meeting date to January 7.
* Page 2: Under Asset Quality, replace the word "decline" with the word
"improvement".
* Page 4: Add "including anticipated cash flows from investments as well as
a review of our current investment strategy" to the end of the last sentence.
* Page 7: Spell out "Field of Membership" rather than using the FOM acronym.
* Page 9: Move the third sentence of the bottom paragraph to the beginning
of the paragraph. Also, the entire paragraph, with the exception of the
wording in parentheses, should be redacted upon distribution to the
membership.
* Page 10: Under Nominating Committee, change the wording of the last
sentence to read "The committee has received only one application; however,
the committee must nominate at least two candidates."
* It was moved by Mr. Gillett and seconded by Ms. Mann to approve the March
27, 1995 Board Meeting Minutes as amended. Motion carried unanimously.
II. Financials
Ms. Dawkins reviewed the following report with the Board:
February Financial Overview
Growth
Loans to members declined $1.5 million in February. Consumer loans declined
$2 million, primarily due to the paydown of the credit card loans and auto
loans. This decline is consistent with our budgeted projections.
Real estate loans held in portfolio remained relatively stable. Growth in
the adjustable-rate mortgage portfolio and home equity portfolios offset a
slight decline in the fixed portfolio.
Total savings for the month declined $.5 million. Shares, money market and
checking accounts declined a combined $6.8 million, with the largest portion
attributed to money market accounts ($3.5 million). Certificate balances
continue to grow ($6.8 million), now at a 263% annualized rate.
The credit union's liquidity position remains tight While, as anticipated,
short-term borrowings have been necessary, it has been for 1 or 2 days at
most. Management will continue to monitor this on an ongoing basis.
Asset Quality
The delinquency ratio is .32% (up from .30% last month), still below the
budgeted .50%. The charge-off ratio remained stable at .35%. The unrealized
loss on Available for Sale investments was $319,006 as of month end. This
represented an improvement of $58,446, as compared to the balance as of the
end of January.
Profitability
Net income for the month was $447,716, which is $95,417 above budget. Our
gross spread for the month was 446 basis points, as compared to 414 basis
points for all of 1994. This was due to the higher than anticipated loan
volume and lower than anticipated deposit volume. As a result, loan interest
income was above budget and dividend expense variances were below budget.
Ratios
With assets of $333,551,000 as of January 31st, the net capital ratio is
8.07% and the gross capital ratio has increased to 8.92%.
III. Committee Reports
a. Supervisory Committee
EXECUTIVE SESSION
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GENERAL SESSION
Mr. Seiler indicated that the committee met on March 23, 1995 and discussed
the following issues:
External Audit Preliminary Results: O'Rourke, Clark & Sacher reviewed the
results with the committee and indicated that their recommendations will be
reviewed by the Board at the April Board meeting. It was noted that no
significant issues had been found and their suggestions to the committee were
beneficial.
Appointment of new Supervisory Committee: The committee members agree that a
5-person committee is desired and they urge the Board to pursue a bylaw
change to facilitate the staggering of committee member terms. It was noted
that diversity of member backgrounds and financial continuity are the key
points that the committee is asking the Board to consider when making
decisions on this issue.
Financial Performance: The committee expressed a desire to see employee
headcount tracked in the budget. The committee also reviewed the consumer
loan origination process.
Supervisory Committee Liaison: Mr. Seiler indicated that he was under the
impression that a Board member was appointed as the Liaison to the
Supervisory Committee. The Board agreed that there is no need for a
committee liaison as all Board members are invited to attend committee
meetings as they wish.
b. Finance Committee
Ms. Dawkins indicated that the committee held a meeting on March 17, 1995 and
approved a revised 1995 budget. She noted that all discussion surrounding
this topic would be tabled until the recommendations portion of this meeting.
c. Human Resource Committee
Mr. Gransewicz explained that the committee held a meeting today, before the
Board meeting, to discuss the following topics:
* Personnel announcement
* Update on pending legal issues
* Summary of open positions
* Compensation Team update
Mr. Garrod asked about the pending legal issues. Mr. Gransewicz informed him
that the committee has nothing specific to be brought to the Board on that
subject at this time.
d. Search Committee
Mr. Gillett indicated that this topic would be held in Executive Session
before the recommendations portion of this meeting.
e. Credit Appeals Committee
No update was given.
IV. Updates and Discussions
a. Promotions Update
Mr. Garner presented three overheads which included the following
information:
Completed Promotions
* February Savings Letter Promotion
Deposit Lost Group - 1,171 households
* 34% increased household savings balances a total of $1.4 million
* Deposit drop slowed substantially to 3% in February from 21% in January
* $990,743 in new certificates opened
Top Deposit Group
* 44% increased household savings balances a total of $5.3 million
* Deposits dropped 2% in February for this group versus a 3% rise in January
* Boat/RV/Motorcycle Promotion
Loans generated: $131,359; Net income: ($1,319) 13 loans, 160% increase in
number of loans
* Line of Credit Promotion
Slowed or reversed seasonal balance drop in HELOC, VISA and ADVANTAGE Line
of Credit. Estimated impact, $3.3 million
Current Promotions
* Mass Savings Promotion: February 20-23 to March 19
* 9-Month Certificate Promotion: March 13 to March 24
* IPI Private Auto Sales: March 23-25 in MA, NH, and CO. Other sales in
April for Chicago, DC, San Francisco, Los Angeles, and New York.
* Certificate Rollover Bonus Offer: Started March 1
Upcoming Promotions
* Membership Drive: April and May (Topic has been discussed with the
liaisons - they have agreed to allow DCU to set up tables in Digital
cafeterias, during lunch, for informational purposes only. Signage will be
posted prior to each visit.)
* VISA Line Increase/Activation: April and May
* HQ Branch Grand Re-Opening: April and May (Extended branch hours will be
promoted at this time)
* Enterprise Used Car Sale: May 6
* Remote Delivery Systems: Late May (Phone-a-Loan, Internet, and Fax-back
will be introduced at this time)
b. Branch Update
Mr. Ryan presented the following information to the Board:
Location Digital Action DCU Action Date
Headquarters N/A Renovating Branch Ongoing
Augusta Building sold Close branch or expand TBD
effective 4/1/95 field of membership
Merrimack 2 Closing facility Remove ATM 6/30/95
Landover Consolidating to Close branch - 6/30/95
Greenbelt possibly relocating
at Greenbelt
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Burlington Closing facility Removing ATM 7/1/95
The Board reached a consensus to allow management to close the Augusta branch
by the end of June, 1995, while pursuing SEG expansion.
c. Pricing Follow-Up
VISA Update: Mr. Regan referenced additional VISA information included in
the Board Package as a follow-up to last month's discussion. Mr. Garrod
indicated that he is opposed to fee-based credit cards. Mr. Gillett
reiterated that all VISA decisions were tabled at the last meeting - any
decisions on this topic will be made with the new CEO.
ATM and Branch Expenses: Mr. Ryan referenced additional ATM/Branch Expense
information included in the Board Package as a follow-up to last month's
discussion.
V. Committee Reports (continued)
d. Search Committee
The Board asked that only Board members remain in the room at this time.
EXECUTIVE SESSION
CEO Search Update
GENERAL SESSION
The Board took a short dinner break at this time.
V. Recommendations
a. Budget
Ms. Dawkins and Mr. Regan presented the following information to the Board:
In January, the Board was provided a proposed 1995 budget (original budget).
Based on discussions at the January Board meeting, it was agreed to revisit
the proposed budget and look at actions necessary to address liquidity and
declining savings trends.
The following is an overview of the changes that have been reflected in the
current version of the budget. These changes take into account the actual
results for January and February.
Growth Adjustments
As discussed during the past two Board meetings, assets have declined during
the first two months of the year. As a result, the likelihood of achieving
the original growth projections for assets and savings appears remote. While
the original growth projections (change from month to month) appear
reasonable for the remaining 10 months of the year, the recovery of savings
lost in January and February will be extremely difficult. Therefore,
budgeted month-end balance projections were adjusted to reflect actual
experience for the first 2 months of 1995. An example would be if the
balance of an account was projected to be $10 million as of the end of
February, but was actually $8 million. For the remaining ten months of the
year, the projected balance would be reduced by $2 million.
As a result, the following growth changes resulted:
Assets - adjusted downward to 1.70% (decline of 3.7%)
Savings Products - adjusted downward to .6% (decline of 2.90%)
Consumer Loan Products - adjusted upward to 9.70% (increase of .40%)
Real Estate Loan Products - adjusted upward to 11.70% (increase of 6.10%)
The increase in the real estate area is reflective of the better than
expected Adjustable Rate Mortgage origination activity during January and
February.
Average Asset Analysis
As a result of the savings/asset decline experienced in the first 2 months of
1995, total assets will be approximately 13 million less than originally
projected. Consequently, the projection of average assets balance for 1995
has declined from approximately $350 million to approximately $341 million.
Spread Analysis
Overall, our net spread has declined from an original projection of 117 basis
points to 96 basis points. This is not as significant of a decline as
anticipated (93 basis points), primarily because of the decline in
savings/assets. Because of the decline, the impact of the dividend rate
adjustments implemented in late January has had less of an impact.
From an operating expense perspective, the amount remains relatively
unchanged at approximately $13,360,000, although the operating expense ratio
increased to 3.58% (from 3.45%). This increase was a direct result of the
saving/asset decline experienced in January as discussed above.
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* It was moved by Mr. Gillett and seconded by Mr. McEachin to approve the
budget assumptions as presented. Motion Carried Unanimously. (Ms. Mann left
the meeting at this time.)
b. Supervisory Committee Vacancy
Mr. Gransewicz explained that Mr. Seiler and Mr. Ketz have indicated that
they wish to continue to serve on the committee for another term. As all
Supervisory Committee member terms expire on April 30, the Board agreed again
to table their decision on this subject until the April 24 Board meeting. It
was also agreed that a full candidate search process be utilized for these
positions. Candidate interviews will be scheduled from 2:30 - 4:00 on the
day of the Board meeting. Posters announcing the vacancies will be posted in
the branches and the list of candidate questions from the previous vacancy
will be included in the Board package.
* It was moved by Mr. Gillett and seconded by Mr. McEachin to elect 5 people
to the committee in April, while pursuing a bylaw change to stagger
Supervisory Committee member terms. Motion Carried Unanimously. The Board
appointed Mr. Kinzelman to pursue the bylaw change.
c. Loan Policy
Mr. Gray reviewed a recommendation to approve a wording amendment to the
Delinquency Loans section of DCU's Loan Policy. The amended wording bases
the criteria for delinquent loans on the number of past due payments, rather
than the number of days a specific payment is past due. (The criteria for
non accrual loans remains unchanged and is not part of this recommendation.)
* It was moved by Mr. Gillett and seconded by Mr. McEachin to approve the
amendment to the Delinquency Loans section of DCU's Loan Policy (Five in
favor, one opposed: Ms. Dawkins). Motion carried.
Mr. Gray reviewed a second recommendation to replace DCU's current
Variable-Rate Home Equity Loan Program with two new fixed-rate programs
called Fixed Home Equity Loan and Fixed Home Equity Jr. Loan. These new
programs will mirror the underwriting criteria of DCU's Home Equity Line of
Credit programs. Ms. Dawkins suggested that these new programs be added to
DCU's loan products without replacing the variable-rate products. As the
variable-rate products are not currently attractive to the membership,
management has the option not to offer those products at this time and need
not remove them from the policy.
* It was moved by Ms. Dawkins and seconded by Mr. McEachin to approve the
addition of two new fixed-rate programs to DCU's Loan Policy: Fixed Home
Equity Loan and Fixed Home Equity Jr. Loan (Five in favor, one opposed: Mr.
Garrod). Motion carried.
d. Home Equity Line Modification
Mr. Gray reviewed a recommendation to modify the terms of the DCU Home Equity
Line of Credit Loans listed as loan type 45s (HELOCS made between 1984 and
October 30, 1989) to adjust on a monthly basis to the Wall Street Journal
Prime Interest Rate plus 1.0% starting on June 1, 1995. This will put these
lines at .5% below DCU's currently offered Equity Line. All other terms and
conditions of these notes will remain unchanged.
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* It was moved by Mr. Gillett and seconded by Ms. Dawkins to approve the
modification of the terms of the DCU Home Equity Line of Credit Loans listed
as loan type 45s as written. Motion carried unanimously.
e. Charge Offs
* It was moved by Mr. McEachin and seconded by Ms. Dawkins to approve the
charge offs, in the amount of $77,408.75, for the month of March, 1995.
Motion carried unanimously.
f. Declaration of Dividends and Rate Ratification
* It was moved by Mr. McEachin and seconded by Mr. Gillett to declare and
authorize the payment of dividends for the first quarter of 1995 in the total
estimated amount of $1,903,553,51, at the rates, terms and conditions
appertaining to each account, as well as to ratify the dividend rates as
shown on the March 27, 1995 rate sheet. Motion carried unanimously.
g. EasCorp
* It was moved by Mr. Gillett and seconded by Mr. Kinzelman to authorize
James. F. Regan, Director of Finance, to enter into an agreement designating
"Trading Authorization for Purchases and Sales of Securities" to ALM First
Investment Advisors, Inc. (The agreement is currently with Southwest
Corporate Credit Union). All transactions shall be performed in accordance
with DCU's existing Investment Policy approved by the Board of Directors.
Motion carried unanimously.
h. Foreclosure Recommendation (Collections Manager)
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VI. Adjournment
* It was moved by Mr. McEachin and seconded by Mr. Gillett to adjourn the
meeting at 7:00 p.m. Motion Carried Unanimously.
Philip J. Gransewicz David J. Garrod
Chairman Secretary
|
| 2.48 | April 24 BoD minutes - Discussion in 938 | ROWLET::AINSLEY | Less than 150kts is TOO slow! | Wed Jun 14 1995 08:43 | 425 |
| From: US2RMC::"[email protected]" 13-JUN-1995 20:04:44.74
To: rowlet::ainsley, wldbil::kilgore
CC:
Subj: 24th April minutes - please post
Digital Employees' Federal Credit Union
Board of Directors' Meeting
Monday, April 24, 1995
The meeting, held in the second floor Training Room of Digital Employees'
Federal Credit Union's (DCU's) Headquarters facility, commenced at
approximately 4:00 p.m.
Present: Tanya Dawkins, Treasurer
Dave Garrod, Secretary
Chris Fillmore-Gillett, Vice Chairman
Phil Gransewicz, Chairman
Paul Kinzelman (via conference call)
Gail Mann
Tom McEachin (via conference call)
Also Present: John Leonard, O'Rourke, Clark & Sacher Accountancy Corporation
Karen Kupferberg, Supervisory Committee Chairperson
Staff: Carlo Cestra, President/CEO
Stephanie Duggan, Recording Secretary
Tim Garner, Vice President of Marketing
Tom Gray, Real Estate Servicing Manager/Acting Vice President of Lending
Jim Regan, Director of Finance,
Tom Ryan, Operations Manager/Acting Vice President of Operations
I. O'Rourke, Clark & Sacher Audit Results
John Leonard, of O'Rourke, Clark & Sacher Accountancy Corporation, introduced
himself to the Board. He explained that he has been the Audit Manager for
DCU's outside audits for the past two years. This year's audit was completed
on Thursday, March 9 and a report was presented to the Supervisory Committee
on March 23. The report noted that no significant weaknesses had been found
with regard to DCU's internal controls. His firm issued a clean opinion on
DCU's financial statements and noted that the credit union appears to be
operating efficiently. He provided copies of his firm's letter to DCU
management as well as DCU's Consolidated Financial Statements. He reviewed
several significant industry trends in 1994 and explained that DCU met or
exceeded peer in all categories.
He went on to explain that loan quality is good - loans are neat and
underwritten well. A question was raised regarding a possible EasCorp
evaluation as well as the possibility of utilizing two corporate credit
unions to avoid getting completely caught in a CapCorp situation. Mr.
Leonard explained that he has not heard of any specific information on an
EasCorp evaluation, but he is fairly certain that it will occur soon. In
addition, he feels there is no advantage or disadvantage to utilizing two
corporate credit unions instead of one. Diversification is positive;
however, there aren't any problems with the EasCorp at this time. Ms.
Kupferberg added that a thorough Internal Control Program eliminates the need
for a second corporate credit union.
Finally, it was noted that a Management Letter Action Plan, addressing any
minor concerns found in the audit, would be presented to the Board next
month. The Board thanked Mr. Leonard for his presentation and he left the
meeting.
II. Review of Minutes
a. Monday, March 27, 1995
The Board reviewed the March 22, 1995 Board Meeting Minutes. The following
changes were submitted:
* Page 2, Financials: under Ratios - change "$333,551 million" to
$333,551,000" and add the word "gross" before the second capital ratio
explanation.
* Page 3, Financial Performance - delete the second sentence
* Page 3, b. Finance Committee, first sentence - delete the word "budget" and
add " and approved a revised 1995 budget" to the end of the sentence.
* Page 5, Pricing Follow-up - Redact the last two sentences in the first
paragraph and the entire second paragraph.
* Page 5, D. Search Committee, EXECUTIVE SESSION - add "CEO Search Update" as
a topic heading.
* Page 7 - redact everything but the first paragraph and the vote taken.
* Page 8 - redact the last paragraph
* Page 9 - redact the information under h. Foreclosure Recommendation
(Collections Manager)
* It was moved by Mr. Gillett and seconded by Ms. Mann to approve the
minutes as amended, excluding the changes requested in the fourth bullet
above (6 in favor; one opposed: Mr. Garrod). Motion carried.
b. Monday, April 3, 1995
The Board reviewed the April 3, 1995 Telephone Vote Minutes. It was noted
that these minutes should be considered EXECUTIVE SESSION.
* It was moved by Ms. Mann and seconded by Mr. Gillett to approve the
minutes as amended (4 in favor; 3 abstentions: Ms. Dawkins, Mr. Mc Eachin,
and Mr. Gransewicz). Motion carried.
c. Friday, April 14, 1995
The Board reviewed the April 14, 1995 Board Meeting Minutes. It was noted
that these minutes should be considered EXECUTIVE SESSION. Ms. Mann
requested that a notation be added explaining that her absence was due to the
meeting being held on the first day of Passover.
* It was moved by Mr. Gillett and seconded by Mr. Garrod to approve the
minutes as amended (5 in favor; 2 abstentions: Ms. Mann and Mr. McEachin).
Motion carried. Mr. McEachin chose to abstain as he did not receive a copy
of these minutes to review in advance.
II. Financials
Ms. Dawkins reviewed the following March Financial Overview with the Board:
Growth
Loans to members grew slightly ($8 million) in March to $236.1 million.
Consumer loans remained relatively stable at $114.8 million. Overall, the
level of consumer loans continues to remain above our year-to-date budget
projections (currently, approximately $1.6 million better than budget).
Real estate loans increased $.9 million in March. Growth in the
adjustable-rate mortgage portfolio was $1.5 million which was partially
offset by declines in the fixed and home equity portfolios.
Total savings for the month increased $15.3 million. This includes
approximately $2 million in dividends posted as of quarter end. Shares,
IRAs, and checking accounts grew a combined $3.7 million, with the largest
portion attributed to checking accounts ($2.9 million). Due to the success
of recent promotions, certificate balances continued to grow ($12.7 million)
in March.
The credit union's liquidity position has improved over the past month. As
of month end, the need for short-term borrowings did not exist. While the
credit union's cash position continues to improve, management will monitor
liquidity on an ongoing basis.
Asset Quality
The delinquency ratio is .26% (down from .32% last month), and remains below
the budgeted .50%. The charge-off ratio declined to .28%. The unrealized
loss on Available for Sale investments was $241,488 as of month end. This
represented an improvement of $77,518, as compared to the balance as of the
end of February.
Profitability
Net income for the month was $306,451, which is $72,411 above budget. Our
gross spread for the month was 430 basis points. This is a decline of 16
basis points as compared to February, but remains ahead of budget (401 basis
points) and year end, 1994 (414 basis points). During the month, loan
interest income was above budget and dividend expense was below budget.
These variances were based on the current product mix.
Ratios
Wit the increase in assets to $348,149 million as of March 31st, the net
capital ratio is 7.83% and the gross capital ratio is 8.66%. These both
decreased as a result of the $15 million increase in assets since February.
The Board requested that the footnote at the bottom of the Consolidated
Statement of Income and Expense be amended before the next meeting. Also, a
request was made to add a footnote indicating the January/February data was
utilized to formulate budget figures.
III. Committee Reports
a. Supervisory Committee
EXECUTIVE SESSION
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GENERAL SESSION
b. Finance Committee
The committee held no meetings in April; therefore, no report was given.
c. Human Resource Committee
The committee held no meetings in April; therefore, no report was given.
d. Search Committee
Mr. Gillett welcomed Mr. Carlo Cestra to DCU and notified the Board that he
has been the official President/CEO of DCU since 10:00 a.m. this morning. He
explained that Mr. Cestra has been the President/CEO of AT&T Federal Credit
Union for the past 16 years. While at AT&T, Mr. Cestra experienced sponsor
downsizing similar to that of DCU. He has a strong Human Resources
background, strong financial numbers with AT&T, and was extremely well-liked
by his staff.
The Board thanked the Search Committee, especially Mr. Gillett (Chairman),
for their time and effort on this project. Finally, Mr. Gillett informed the
Board that the Executive Search Committee has been disbanded now that the new
CEO is on board.
e. Credit Appeals Committee
The committee held no meetings in April; therefore, no report was given.
IV. Updates and Discussions
a. Promotions Update
Mr. Garner reviewed the following information with the Board:
Completed Promotions
* 9-Month Certificate Promotion (deposits generated = $10.5 million, Net
Income = -$54,067, and Net new money = 55%)
* 1995 March Auto Promotion (IPI) (Loans generated = $1.5 million, Net Income
= $9,973, and Total Loans = 120)
* Mass Savings Promotion - Members with Checking (Net deposits generated =
$3.4 million, Net Income = $80,604, and Check order coupons redeemed = 39)
* Mass Savings Promotion - Members without Checking (Net deposits generated =
$2.7 million, Net Income = $74,389, and New checking accounts = 75)
Current Promotions
* IPI Private Auto Sales - April, 1995 for Chicago, DC, San Francisco, Los
Angeles, and New York
* Certificate Rollover Bonus Offer - started March 1
* VISA Line Increase/Activation - April through August 31
Upcoming Promotions
* Membership Drive - May and June
* HQ Branch Grand Re-Opening - May 15-19 tentative
* Enterprise Used Car Sale - May 6
* Fee Reduction Announcement - mid to late May
* Remote Delivery Systems - mid to late June
* June Auto Sale - June 5 to June 23
b. Delivery Systems Update
Mr. Ryan reviewed the following information with the Board:
Location Digital Action DCU Action Date
Headquarters N/A Renovating Branch
Grand Re-Opening 5/16/95
Augusta Building sold Close Branch 6/1/95
effective 4/1/95
Landover Closing facility Close Branch 6/15/95
Merrimack 2 Closing facility Remove ATM 6/30/95
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Burlington Closing Facility Remove ATM 8/1/95
After discussion, the Board agreed that management should close the Landover
branch by 6/15/95 as no relocation to Greenbelt is possible due to costs
associated with it.
c. NCUA Exam
Mr. Regan explained that Bob Trott and three other NCUA examiners arrived one
week ago and plan to conduct their examination over the next 3 weeks. Exam
results are expected at the end of May.
The Board took a 10-minutes dinner break at this time.
V. Recommendations
a. Supervisory Committee Vacancies
It was noted that candidate interviews were held prior to this meeting.
EXECUTIVE SESSION
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GENERAL SESSION
* It was moved by Ms. Mann and seconded by Ms. Dawkins to elect a
four-person committee of Bob Ketz, Larry Seiler, Horace Turner, and Alan
Heintz, with the option to add a fifth committee member in the future (six in
favor, one opposed: Mr. Gransewicz). Motion carried. (Mr. McEachin ended
his conference call at this time)
b. Streamline Field of Membership Expansion
Mr. Garner explained that the NCUA has approved DCU for Streamlined Expansion
Procedure (SEP). Under SEP, the credit union has the authority to add select
groups which meet the following criteria:
* The group has an occupational common bond;
* The group is located within 25 miles of one of your service facilities. A
credit union service facility is a place where deposits or loan applications
are accepted; loan proceeds are disbursed; a member may deal directly with
one of your credit union representatives (volunteer or employee, not a CUSO
employee); and the service provided is clearly associated with your credit
union. A shared facility does not qualify as a service facility for the
purposes of expanding your field of membership;
* The group has no other credit union service presently available;
* The group has specifically requested credit union services from your credit
union; and
* The occupational groups added under SEP authority have 100 or fewer
employees. The National Credit Union Administration (NCUA) Board may, at its
discretion, adjust that number at a later time.
SEP authority does not extend to non-natural person members, such as
corporate members.
* It was moved by Ms. Dawkins and seconded by Mr. Gillett to approve the
following amendment to DCU's Charter to facilitate the Streamlined Expansion
Procedure:
"Groups of persons with occupational common bonds which are located within 25
miles of one of the credit union's service facilities, which have provided a
written request for service to the credit union, which do not presently have
credit union service available, and which have no more members in the group
than the maximum number established by the BCUA Board for additions under
this provision: Provided, however, that the National Credit Union
Administration may permanently or temporarily revoke the power to add groups
under this provision upon a finding, in the Agency's discretion, that
permitting additions under this provision are not in the best interests of
the credit union, its members, or the National Credit Union Share Insurance
Fund;3"
Motion carried unanimously.
c. Supervisory Committee Bylaw Amendment
Mr. Kinzelman explained that he believes that the Board can appoint
Supervisory Committee members to two or three-year terms to facilitate the
staggering of Supervisory Committee member terms. Mr. Regan further noted
that the amendment to institute the change was included in the original
changes, but somehow this particular amendment was overlooked in the final
draft. It was decided that further discussion with General Counsel is
necessary to determine how this situation should be handled.
d. Charge Offs
* It was moved by Ms. Mann and seconded by Mr. Gillett to approve the charge
offs, in the amount of $108,118.37, for the month of April, 1995. Motion
carried unanimously.
e. Pricing
Mr. Regan presented the following recommendations to the Board:
* Eliminate $.25 fee for Point of Sale transactions
* Eliminate all VISA annual fees
* Give members who carry ATM Cards or CheckCards four free network ATM
transactions each month (does not include inquiries)
Mr. Cestra explained that he is very comfortable with these recommendations.
He feels strongly that four free foreign ATM transactions each month will
tell the members that DCU would like their deposits, but they can withdraw
easily as well. He also feels that there are many free VISA cards on the
market that we must compete with. When a free card is enhanced by DCU's
great rates, he believes additional funds will come in to cover the costs of
eliminating the fee. (Ms. Mann left the meeting at this time.)
Ms. Dawkins expressed her concerns that Mr. Cestra has come to this
conclusion on his first day of work and questioned his knowledge level of
DCU's operations - she feels perhaps this decision should be deferred until
he has had the opportunity to better understand DCU's operations. Mr. Cestra
reassured the Board that, although this is his first day at DCU he has been
reviewing the credit union's situation for months and is well knowledged in
its operations - no one has pushed him into this decision. He added that he
has seen the results (member penetration) of this type of program - the costs
will increase, but greater income will offset this increase. At AT&T, Mr.
Cestra's credit union was in competition with AT&T's Universal Card and the
AT&T Credit Union's free VISA card beat the universal card in service and
rate - it is still free today. He stressed the importance of communicating
our products and services to the members - DCU must educate it's members, as
well as it's employees, that DCU is the best financial institution for their
needs.
* It was moved by Mr. Gillett and seconded by Mr. Garrod to approve
management's pricing recommendations as presented. Motion carried
unanimously.
VI. Adjournment
* It was moved by Mr. Gillett and seconded by Mr. Kinzelman to adjourn the
meeting at approximately 7:00 p.m. Motion carried unanimously.
Philip J. Gransewicz David J. Garrod
Chairman Secretary
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% Subject: 24th April minutes - please post
|
| 2.49 | May 26, 1995 Minutes - Discussion in 941 | ROWLET::AINSLEY | Less than 150kts is TOO slow! | Thu Jul 13 1995 08:50 | 262 |
| From: US2RMC::"[email protected]" 13-JUL-1995 06:36:00.04
To: wldbil::kilgore, rowlet::ainsley
CC:
Subj: May 26th minutes - please post
Digital Employees' Federal Credit Union
Board of Directors' Meeting
Friday, May 26, 1995
The meeting, held in the second floor Training Room of Digital Employees'
Federal Credit Union's (DCU's) Headquarters facility, commenced at
approximately 4:00 p.m.
I. Roll Call and Determination of Quorum
Present: Dave Garrod, Secretary
Chris Fillmore-Gillett, Vice Chairman
Phil Gransewicz, Chairman
Paul Kinzelman (via conference call)
Gail Mann
Tom McEachin
Also Present: Bob Trott, NCUA Examiner
Larry Seiler, Supervisory Committee Member
Alan Heintz, Supervisory Committee Member
Bob Ketz, Supervisory Committee Chairman
Staff: Carlo Cestra, President/CEO
Stephanie Duggan, Recording Secretary
Tim Garner, Vice President of Marketing
Tom Gray, Real Estate Servicing Manager/Acting Vice
President of Lending
Jim Regan, Director of Finance
Donna Russo, Human Resources Manager
Tom Ryan, Operations Manager/Acting Vice President
of Operations
Absent: Tanya Dawkins, Treasurer
II. NCUA Exam
NCUA Examiner, Bob Trott, explained that the NCUA's annual examination of DCU
is complete. The examination covered 18 months of data and it was noted that
the exam itself went very smoothly, thanks to the efforts and assistance of
management. He provided copies of the Examiner's Findings Report to the
Board which included explanations of each issue, in detail. Overall, DCU is
in great shape in the opinion of Mr. Trott. The following are the major
finding's in the Examiner's Report:
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Mr. Trott concluded his presentation with a review of DCU's CAMEL ratings for
the year and then thanked the staff for their assistance in this exam. The
Board thanked Mr. Trott for attending and he left the meeting.
III. Review of Minutes
* It was moved by Mr. McEachin and seconded by Ms. Mann to approve the April
24, 1995 Board Meeting Minutes as written. Motion carried unanimously.
* It was moved by Ms. Mann and seconded by Mr. McEachin to approve the May
16, 1995 Phone Vote Minutes as written. Motion carried unanimously.
IV. Credit Union Operations
Mr. Cestra explained that, going forward, each member of the Senior
Management Team will submit a monthly department overview to be included in
the Board Package. All departmental updates will be included in these
reports and the Board will have the opportunity to ask questions about the
contents of the reports at the Board meeting. This section will take the
place of the Updates/Discussions section found in previous Board agendas.
The Board agreed with this new approach to the agenda.
V. Committee Reports
a. Supervisory Committee
Mr. Seiler explained that the committee did not meet in May; however, their
next meeting is scheduled for June 1, 1995.
b. Finance/Investment Committee
Mr. Gransewicz explained that the following issues were discussed at today's
meeting with EasCorp:
* Asset Liability Management
* Investment Strategy
* Investment Portfolio
* Future Available for Sale issues to address liquidity
c. Human Resource Committee
No meeting was held in May; therefore, no formal report was given.
d. Credit Appeals Committee
No meeting was held in May; therefore, no formal report was given.
VI. Recommendations
a. Supervisory Committee Member Indemnifications
All Supervisory Committee members left the room at this time.
* It was moved by Ms. Mann and seconded by Mr. Gillett to approve the
indemnification of new Supervisory Committee members, Alan Heintz and Horace
Turner. Motion carried unanimously.
The Supervisory Committee members returned to the meeting at this time.
b. Signature and Investing Authority
Mr. Regan reviewed the following recommended changes to DCU's signature and
investing authority:
* Check signing: currently Tanya Dawkins, Treasurer - change to James F.
Regan, Director of Finance.
* Investment Agreement with EasCorp: change to Carlo Cestra and James F.
Regan for General Financial Authority, omitting Tanya Dawkins, Treasurer.
Also, replace Thomas Gray and Thomas Ryan with Laura Mullen, Accounting
Supervisor.
* Accounts for Depository Needs: currently the Chairman, Vice Chairman, and
Treasurer of the Board - change to Carlo Cestra, James F. Regan, and Laura
Mullen.
* It was moved by Mr. Gillett and seconded by Mr. Garrod to approve the
above recommendations. Motion carried unanimously.
c. Auto Loans
Mr. Gray reviewed a recommendation to amend DCU's Consumer Loan Policy to
include the following terms for secured vehicle loans:
* Used auto loans with terms up to 72 months
* Used recreational vehicle/boat loans with terms up to 144 months
* It was moved by Ms. Mann and seconded by Mr. Gillett to approve the above
recommendation. Motion carried unanimously.
d. Loan Ratification
The Board reviewed a members' loans.
X
X
X
X
X
X
X
e. Equity Line of Credit
Mr. Gray reviewed management's recommendation to increase the maximum loan to
value of the Home Equity Jr. Line of Credit and the Fixed Home Equity Jr.
Loan to 100%. He explained that by raising the loan to value on these loans,
DCU will be in line with its competition with a non substantial amount of
added risk.
* It was moved by Mr. Gillett and seconded by Mr. McEachin to approve the
above recommendation. Motion carried unanimously.
f. Charge Offs
* It was moved by Mr. McEachin and seconded by Mr. Gillett to approve the
charge offs, in the amount of $87,797.23, for the month of May, 1995. Motion
carried unanimously.
g. Defined Benefit and Trust
* It was moved by Ms. Mann and seconded by Mr. McEachin to approve the
appointment of Carlo Cestra and James Regan as DCU's Integrated Defined
Benefit Plan and Trust Trustees. They will replace Mr. Gransewicz. Motion
carried unanimously.
h. Lease Agreement
* It was moved by Mr. Gillett and seconded by Mr. McEachin to approve Donna
M. Russo to execute a lease agreement with Chrysler Credit Corporation on
behalf of DCU for Mr. Carlo Cestra. Motion carried unanimously.
VII. Old Business
a. Greenbelt ATM
Mr. Ryan informed the Board that management has revisited this situation and
now agrees that installing an ATM in the Greenbelt area will aid in the
branch closing transition for the members. The decision and location of the
ATM will be announced next week.
VIII. New Business
a. Branch Relocations
Mr. Ryan provided a handout to the Board outlining DCU's opportunity to
relocate two of its branches, Marlboro and Shrewsbury. He explained that
both moves will enable theses branches to provide better service to the
membership. Specifically, the new locations will be situated in areas that
will be more conducive for outside members using the credit union branch
offices. Each office will be designed with a member service area and easy
access to the branch manager. In addition, we will have more flexibility in
expanding branch hours.
There are three potential locations for the Shrewsbury branch and one, with
the potential for ATM installation, for the Marlboro branch. Management is
working on the specifics of these moves and will keep the Board informed of
any future developments.
IX. Adjournment
* It was moved by Mr. Gillett and seconded by Mr. McEachin to adjourn the
meeting at 5:25 p.m. Motion carried unanimously.
Philip J. Gransewicz David J. Garrod
Chairman Secretary
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% Subject: May 26th minutes - please post
|
| 2.50 | June 26, BoD Minutes - Discussion in 945 | ROWLET::AINSLEY | Less than 150kts is TOO slow! | Wed Aug 16 1995 08:52 | 248 |
| From: US2RMC::"[email protected]" 15-AUG-1995 22:56:27.53
To: rowlet::ainsley, wldbil::kilgore
CC:
Subj: DCU June minutes - please post
Digital Employees' Federal Credit Union
Board of Directors' Meeting
Monday, June 26, 1995
The meeting, held in the second floor Training Room of Digital Employees'
Federal Credit Union's (DCU's) Headquarters facility, commenced at
approximately 4:00 p.m.
GENERAL SESSION
I. Roll Call and Determination of Quorum
Present: Tanya Dawkins, Treasurer
Chris Fillmore-Gillett, Vice Chairman
Phil Gransewicz, Chairman
Paul Kinzelman (via conference call)
Gail Mann
Tom McEachin
Also Present: Larry Seiler, Supervisory Committee Member
Staff: Carlo Cestra, President/CEO
Stephanie Duggan, Recording Secretary
Tim Garner, Vice President of Marketing
Tom Gray, Vice President of Lending
Jim Regan, Vice President/CFO
Donna Russo, Human Resources Director
Tom Ryan, Vice President of Operations
Absent: Dave Garrod, Secretary
II. Review of Minutes
* It was moved by Mr. Gillett and seconded by Mr. McEachin to approve the
May 26, 1995 Board Meeting Minutes as written (one abstention: Ms. Dawkins -
absent from meeting). Motion carried. It was requested that the bulleted
portion of the NCUA Examination section, as well as the Loan Ratification
Recommendation section, be redacted upon distribution to the membership.
* It was moved by Mr. McEachin and seconded by Ms. Mann to approve the June
5, 1995 Phone Vote Minutes and the June 14, 1995 Phone Vote Minutes as
written (One abstention: Mr. Gillett - absent due to business travel).
Motion carried.
III. Management Reports
a. Financials
It was requested by the Board that the Financials include a week to week
charting of deposit growth in graph form.
b. Management Reports
The following points were noted:
* Management is tracking the addition of new members as a result of the
membership drive.
* Closed Account/Large Withdrawal Survey results will be updated constantly,
rather than quarterly. The front-line staff is also taking a more proactive
role in trying to keep members from closing their accounts.
* A release has been put forth to different credit union publications
regarding recent Senior Management promotions/changes.
* A quality team has been assembled to address the possible expansion of the
hours of operation of the Information Center as well as the branches. The
team members are currently tracking the success of the expanded Headquarters
Branch hours. The latest figures show that members are utilizing the branch
at a high rate on Saturdays. Furthermore, Thursday evening branch
utilization continues to grow as well (currently 25-30 members).
* The Equity Line of Credit conversion went well with little adverse reaction
from the membership.
c. Recommendations
1. SEG Authority for CEO
Mr. Cestra explained that Management's intention, under SEP, is to initially
solicit small Digital contractors, Maynard and other town government
employees, and small businesses within 25 miles of the Headquarters branch.
They are creating a staff position to pursue these opportunities as soon as
possible.
Management recommended that the Board adopt the following policy:
"The Board of Directors delegates to the CEO authority to implement
provisions of NCUA's Streamlined Expansion Procedure (SEP) including
admitting new groups and enrolling their employees. The CEO will report
admission of each new group to the Board of Directors at their monthly
meetings for ratification."
* It was moved by Mr. Gillett and seconded by Ms. Mann to approve the above
recommendation as written. Motion carried unanimously.
2. Northern Telecom
Nortel (Northern Telecom, Inc.) has asked DCU to provide service to their
employees in Alpharetta, GA. The 750 employees, located in the same building
as DCU's Alpharetta Branch, are currently included in the field of membership
of Nortel's credit union in Tennessee. DCU will request a field of
membership overlap from the NCUA in order to provide service and management
is awaiting comment from the Tennessee credit union before submitting DCU's
application to the NCUA.
Management recommended that the Board of Directors approve Nortel's request
for service, subject to approval by the NCUA.
* It was moved by Ms. Dawkins and seconded by Ms. Mann to approve the above
recommendation as written. Motion carried unanimously.
3. Charge Offs
* It was moved by Mr. Gillett and seconded by Mr. McEachin to approve the
charge offs, in the amount of $82,046.79, for the month of June, 1995.
Motion carried unanimously.
4. Declaration of Dividends and Rate Ratification
* It was moved by Mr. McEachin and seconded by Ms. Mann to declare and
authorize the payment of dividends for the second quarter of 1995 in the
total estimated amount of $2,103,306, at the rates, terms, and conditions
appertaining to each account. It was further moved and seconded that the
Board ratify the dividend rates as shown on the rate sheet, dated June 26,
1995. Motion carried unanimously.
IV. Committee Reports
a. Supervisory Committee
Mr. Seiler indicated that the new Supervisory Committee met for the first
time on June 1, 1995. The committee approved Bob Ketz as Chairman and Larry
Seiler as Secretary. The following points were discussed:
* Mr. Seiler attended the O'Rourke, Clark, and Sacher Supervisory Committee
Conference and gave an overview of the topics discussed.
* Several management items were reviewed.
* Internal Auditor Search - Mr. Cestra will screen the candidates and bring
the final two or three to the committee. The committee has stipulated that
the final candidates' backgrounds must be diverse to act independently. Mr.
Cestra and the committee will jointly create a policy defining the terms of
employment for the Internal Auditor. The committee will bring the completed
contract to the Board for their information.
b. Finance Committee
It was noted that the committee did not meet and no formal report was given.
c. Human Resource Committee
Ms. Russo explained that the committee reviewed the following items at
today's meeting:
* Wage and Compensation Team Update - final report
* DCU employment activity
* Exit interview forms
* Legal update
* Policy update - casual dress guidelines
d. Search Committee
Mr. Gillett explained that he has received a survey from Lamalie Amrop
International regarding their performance during DCU's CEO Search. He asked
that the Board contact him with any feedback on this subject.
e. Credit Appeals Committee
It was noted that the committee did not meet and no formal report was given.
V. Old Business
Signature and Investment Authority
Ms. Dawkins expressed her concerns regarding the recent removal of Board
members from the signature authority list for check signing, investment
agreements, and accounts for depository needs. She explained that all
authority has been delegated, whereby producing an inadequate checks and
balances system in the case of a fraudulent situation. She requested that
the Investment Policy be revised to stipulate that the Board be notified of
any major obligations where DCU is pledging credit union assets for liquidity
or other purposes. The Board requested that management revise the Investment
Policy to include controls for these issues. They also requested that the
final version be given to the external auditors for review.
VI. New Business
Fall Strategic Session
Mr. Cestra asked for direction from the Board regarding their accomplishment
goals for this year's planning session. He asked the Board to focus on their
vision for DCU over the next five years. The following issues were put forth
by the Board:
* All strategies should be thoroughly reviewed from the new management team's
perspective.
* DCU's relationship with Digital
* Moving forward with electronic delivery systems
* DCU's branch structure
* Mergers/Acquisition issues
* Do we want to continue to be "DCU"
* Strategies to make DCU our members' only financial institution
* Should DCU grow or become smaller
* Should DCU change its expense structure
* New sources of income - possibly changing the nature of DCU
* Environmental update
* PC/Home banking issues
* Strengths/Weaknesses
* Board effectiveness
* Collective vision of management team
* Alternative Investments
* Expanding workforce issue - possibility of offsite facilities
* Competition analysis
* DCU's image - differentiating DCU from Digital
Mr. Cestra explained that the management team would review the above
information and bring it to the Board for approval next month.
VII. Adjournment
Mr. Gransewicz thanked Ms. Dawkins and Ms. Mann for their service to DCU, as
today's meeting would be their last as directors of the credit union. They
have been a great asset to the credit union and will be missed. The Board
wished them both the best of luck in their future endeavors. Ms. Dawkins and
Ms. Mann expressed their thanks to the credit union for giving them the
opportunity to serve on the Board of Directors.
* It was moved by Ms. Mann and seconded by Mr. Gillett to adjourn the
meeting at 5:20 p.m. Motion carried unanimously.
____________________ _______________
Philip J. Gransewicz David J. Garrod
Chairman Secretary
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% Subject: DCU June minutes - please post
|
| 2.51 | July 24, 1995 BoD Minutes - Discussion in 950 | MOLAR::DELBALSO | I (spade) my (dogface) | Sat Sep 09 1995 08:50 | 232 |
| From: US2RMC::"[email protected]" 9-SEP-1995 00:15:11.01
To: molar::delbalso
CC:
Subj: July DCU BOD Meeting minutes - please post
Date: 09/07/95
Digital Employees' Federal Credit Union
Board of Directors' Meeting
Monday, July 24, 1995
The meeting, held in the second floor Training Room of Digital Employees'
Federal Credit Union's (DCU's) Headquarters facility, commenced at
approximately 4:00 p.m.
GENERAL SESSION
I. Roll Call and Determination of Quorum
Present: David Garrod
Christopher Fillmore-Gillett
Philip Gransewicz
Gim Hom (via conference call)
Paul Kinzelman (via conference call)
Thomas McEachin
Elaine Ritchie
Also Present: Larry Seiler, Supervisory Committee Secretary
Horace Turner, Supervisory Committee Member
Staff: Carlo Cestra, President/CEO
Stephanie Duggan, Recording Secretary
Kim Gates, Executive Secretary
Tom Gray, Vice President of Lending
Jim Regan, Vice President/CFO
Donna Russo, Human Resources Director
Tom Ryan, Vice President of Operations
Prior to the meeting, the Election of Officers for the Board of Directors was
held:
* It was moved by Mr. Garrod and seconded by Mr. Gillett to elect Phil
Gransewicz as Chairperson.
Motion carried unanimously.
* It was moved by Mr. Garrod and seconded by Mr. Gransewicz to elect Chris
Gillett as Vice Chairperson.
Motion carried unanimously.
* It was moved by Mr. Gillett and seconded by Mr. Garrod to elect Tom
McEachin as Treasurer.
Motion carried unanimously.
* It was moved by Mr. Gillett and seconded by Mr. Gransewicz to elect Dave
Garrod as Secretary.
Motion carried unanimously.
At this time, Gim Hom joined the meeting via conference call.
II. Review of Minutes
The Board reviewed the June 26, 1995, Board Meeting Minutes. The following
change was submitted:
* Page 2, b. Management Reports - in the last bullet, replace the word
"resistance" with "adverse reaction".
* It was moved by Mr. Garrod and seconded by Mr. McEachin to approved the
minutes as amended. (5 in favor; 2 abstentions: Mr. Hom and Ms. Ritchie).
Motion carried.
III. Management Reports
a. Financials
Mr. Gillett questioned if he should table a discussion regarding the
marketing budget, particularly the amount budgeted which has not been used.
Management assured Mr. Gillett these funds are necessary and will be used to
achieve the1995 goals.
A request was made to include the "Rate" column in the "Actual" portion of
the Spread Analysis on page 29. This revision will be made on next month's
Analysis.
Mr. Cestra explained that two new pages (the graph on page 37 - Net
Membership Change - and the report on page 38 - Savings/Loan Products
Penetration Report) have been added to create a greater focus on member
product and service penetration. Mr. Kinzelman questioned if we are able to
determine whether or not a checking account is being utilized. Management
will have the information available at next month's meeting. It was also
questioned if employee gainsharing should be realigned in accordance with
product use. This topic will be discussed at the Planning Conference this
Fall.
Mr. Hom disconnected from the conference call at 4:15 p.m. because of phone
line interference caused from the airplane he was on.
Mr. Garrod discussed the "NSF and Overdraft Fees" listed in the "Other
Income" Report on page 12. It was questioned if members are educated on the
options to avoid these fees, which generate approximately $1,000,000
annually. Mr. McEachin questioned how this amount compares to other
financial institutions. Management responded that according to recent data
from the Raddon Financial Group, this amount was average as compared to other
credit unions who participated in the study.
Larry Seiler joined the meeting at 4:25 p.m.
Mr. Gransewicz questioned one of the yields (0%) shown in the report on page
36, which is an error and will be corrected. Mr. Cestra suggested that an
Investment Activity Report be generated monthly as part of the Report
Package.
Mr. Garrod noted that DCU only utilizes EasCorp. Mr. Regan responded that we
are looking into the possibility of also utilizing Empire Federal Credit
Union in New York and will discuss this further with the Investment
Committee.
b. Department Updates
* Marketing - Mr. Gransewicz asked if the Raddon Financial Group's survey
results are available at this time. Mr. Cestra explained that the results
will be presented at the Planning Conference in September.
* Lending - Loan volume and turnaround time has been phenomenal. Staff
cooperation has been excellent.
* Operations - A local architect, Margolis & Associates of Boston, rather
than the one used for the renovations at Headquarters, has been selected to
construct the Shrewsbury Branch. Mr. Garrod commented on how the addition of
Home Banking being added to our delivery systems will further enhance credit
union access for the entire membership.
* Human Resources - Board members and their guests are invited to the DCU
Outing to be held August 19th at the Glen Ellen Country Club in Millis, MA.
It was requested that the monthly Human Resources Update include the current
number of employees.
c. Recommendations
1. Charge Offs
The Board and Management discussed credit scoring and other criteria used to
determine approval. In one instance, a loan became delinquent in just one
month. In particular, ADVANTAGE Lines of Credit seem to be the most
frequently delinquent. Further investigation will be done to determine if
there is a common bond among the loans that do become delinquent, and a
follow up will be presented at next month's meeting. However, it was noted
by Mr. Gray that the number of loans approved vs the number charged off and
the delinquency rate are very impressive. He further noted that management
is looking into revamping its credit scoring model, which is currently three
years old, to assure its continued efficiency in the loan decision process.
* It was moved by Mr. Gillett and seconded by Mr. Garrod to approve the
charge offs, in the amount of $95,881.78, for the month of July, 1995.
Motion carried unanimously.
IV. Committee Reports
a. Supervisory Committee
Mr. Seiler indicated that a meeting was held on July 17, 1995, and the
following was noted:
* Mr. Ryan was present and gave the Committee an extensive presentation of
Data Processing security. Mr. Seiler congratulated Mr. Ryan for a job well
done.
* The question was raised if the Supervisory Committee attends the Planning
Conference. Although the Committee is welcome, the strategic planning of
the Credit Union is the role of the Board of Directors and Senior Management.
* Interviews have been scheduled for the position of Internal Auditor.
b. Finance Committee
No formal report was given.
c. Human Resource Committee
No formal report was given.
d. Credit Appeals Committee
No formal report was given.
Mr. Gransewicz informed the Board that Committee nominations will be
announced at the August Board Meeting.
V. Old Business
none
VI. New Business
a. Indemnification of New Board Members
Ms. Ritchie left the room at this time.
* It was moved by Mr. McEachin and seconded by Mr. Gillett to approve the
indemnification of new Board Members, Elaine Ritchie and Gim Hom. Motion
carried unanimously.
Ms. Ritchie returned at this time.
b. Approval of Minutes of Phone Votes
* It was moved by Mr. McEachin and seconded by Mr. Garrod to approve the
July 6, 1995, Phone Vote Minutes as submitted. (4 in favor, 2 abstentions:
Mr. Gillett and Ms. Ritchie) Motion carried.
* It was moved by Mr. Gillett and seconded by Mr. Garrod to approve the June
28, 1995, Phone Vote Minutes as submitted. (4 in favor, 2 abstentions: Mr.
McEachin and Ms. Ritchie) Motion carried.
* It was moved by Mr. McEachin and seconded by Mr. Gillett to adjourn the
meeting at 5:00 p.m. Motion carried unanimously.
Philip J. Gransewicz David J. Garrod
Chairman Secretary
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% Subject: July DCU BOD Meeting minutes - please post
|
| 2.52 | Clarification on two recent Executive sessions | MOLAR::DELBALSO | I (spade) my (dogface) | Tue Sep 12 1995 05:35 | 80 |
| From: US2RMC::"[email protected]" 12-SEP-1995 00:30:43.10
To: rowlet::ainsley, wldbil::kilgore, molar::delbalso
CC:
Subj: June 28th and July 6th DCU BoD Telephone vote meetings
The attached contains the minutes of the above mentioned
meetings. You may wish to post this message in the
DCU notesfile.
Both telephone vote meetings were held in Executive Session.
The sole purpose of each meeting was to vote to approve a
loan to a board member. The reason these votes are held
in Executive Session is to protect the financial confidentiality
of that particular member just as we protect the confidentiality
of the business of any other individual member that we may
get to know about.
I want to make it clear that board members go through exactly
the same screening process and credit scoring as any other
DCU member when they apply for a loan. But we have the
additional safeguard/step that all loans to board members must be
approved by the whole board (excluding the member taking the
loan), hence the specially constituted 5 minute telephone
vote board meetings.
Regards,
Dave Garrod
Secretary DCU Board of Directors
-------------------------------------------------------------------------
Board of Directors Telephone Vote
June 28th 1995
EXECUTIVE SESSION
[recommendation to approve a standard credit scored loan to a
particular board member]
Recommendation approved by all four board members
present
Philip J Gransewicz
Chairman
David J Garrod
Secretary
------------------------------------------------------------------------------
----
Board of Directors Telephone Vote
July 6th 1995
EXECUTIVE SESSION
[recommendation to approve a standard credit scored loan to a
particular board member]
Recommendation approved by all five board members present
Philip J Gransewicz
Chairman
David J Garrod
Secretary
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% Received: by mail04.mail.aol.com (8.6.12/8.6.12) id VAA02295; Mon, 11 Sep 1995 21:34:53 -0400
% Date: Mon, 11 Sep 1995 21:34:53 -0400
% From: [email protected]
% Message-Id: <[email protected]>
% To: rowlet::ainsley, wldbil::kilgore, molar::delbalso
% Subject: June 28th and July 6th DCU BoD Telephone vote meetings
|
| 2.53 | Discussion in 953 | ROWLET::AINSLEY | Less than 150kts is TOO slow! | Wed Sep 27 1995 09:20 | 242 |
| From: US2RMC::"[email protected]" 26-SEP-1995 22:29:49.70
To: rowlet::ainsley, wldbil::kilgore, molar::delbalso
CC:
Subj: August 28th DCU BOD minutes - please post
Digital Employees' Federal Credit Union
Board of Directors' Meeting
Monday, August 28, 1995
The meeting, held in the second floor Training Room of Digital Employees'
Federal Credit Union's (DCU's) Headquarters facility, commenced at 4:00 p.m.
GENERAL SESSION
I. ROLL CALL AND DETERMINATION OF QUORUM
Present: David Garrod, Secretary
Christopher Fillmore-Gillett, Vice-Chairman
Philip Gransewicz, Chairman
Gim Hom
Paul Kinzelman (via conference call)
Thomas McEachin, Treasurer
Elaine Ritchie
Also Present: Bob Ketz, Supervisory Committee Chairman
Larry Seiler, Supervisory Committee Secretary
Staff: Carlo Cestra, President/CEO
Tim Garner, Vice President of Marketing
Tom Gray, Vice President of Lending
Lisa Kendall, Recording Secretary
Jim Regan, Vice President/CFO
Donna Russo, Director of Human Resources
Tom Ryan, Vice President of Operations
II. REVIEW OF MINUTES
The Board reviewed the July 24, 1995, Board Meeting Minutes. The following
change was requested:
* Page 2, Replace the sentence in reference to Mr. Hom with the following:
"Mr. Hom disconnected from the conference call at 4:15 p.m. because of phone
line interference - caused from the airplane he was on."
* It was moved by Mr. Gillett and seconded by Ms. Ritchie to approve the July
24, 1995 Board Meeting Minutes as amended. MOTION CARRIED UNANIMOUSLY.
Mr. Cestra noted that the September Board Meeting will be held at the Annual
Strategic Planning Conference on Thursday, September 21, 1995. He also
updated the Board regarding the disbursement of funds for one part of the
Employee Gainsharing Bonus (totaling 1.6% of employee salaries) to be paid to
all eligible employees in September, 1995. This Bonus is tied to results
received from the Membership Survey which was conducted in May and June of
this year. All results will be discussed thoroughly during the Board's
Planning Conference next month.
Mr. Gransewicz noted that a "Change in Loan Policy" Recommendation will be
added to today's agenda.
III. MANAGEMENT REPORTS
A. DEPARTMENT UPDATES
The following issues were discussed:
Lending:
Mr. McEachin enquired whether business loans are offered. Mr. Gray noted
that DCU currently only offers loans which are secured by real estate (1-4
family non-owner occupied or second homes).
Operations:
Mr. Ryan noted that he is meeting with our VISA processor, Equifax Card
Services, on August 30, 1995 to find out what steps Equifax is taking to
ensure that the recent equipment failure they experienced does not occur
again. Its estimated that this equipment failure impacted 10-20% of our VISA
accounts that attempted to perform transactions during this three to four day
period. Most members who contacted the credit union were able to make their
purchase using an off-line method.
Marketing:
Mr. Garrod questioned the number of new memberships opened as a result of the
Membership Drive which took place
May 1, 1995 through June 6, 1995, at Digital and Quantum sites. Mr. Garner
noted that the number of new memberships was a little lower than expected (9
memberships; with deposits totaling $31,272 and loans totaling $18,000)
because of restrictions Digital imposed on us (limiting us to open new
memberships inside our branches only). Mr. Garner added that there is a
possibility that DCU will be conducting fairs at some of our branch locations
in the future.
B. RECOMMENDATIONS
Home Banking System
Mr. Ryan reviewed the Home Banking System Recommendation with the Board.
Management recommended the purchase of CFI's Home Banking System which will
enable DCU to provide a new home computer electronic delivery system to our
members. The costs associated with this system will not exceed $85,000 and
the functions include: Balance Inquiries, Account Transfers, Loan Payments,
Account History (statements), Check Withdrawal and the ability to Export to
other Financial Software.
* It was moved by Mr. McEachin and seconded by Mr. Gillett to purchase CFI's
Home Banking System with a cost not to exceed $85,000. MOTION CARRIED
UNANIMOUSLY.
Roof Top Heating & Cooling Unit
Management Recommended the approval of an additional capital expenditure to
allow for the replacement of DCU's headquarters buildings' heating and
cooling unit. Preliminary stages of research indicate that the potential
cost for this replacement is not expected to exceed $35,000.
* It was moved by Mr. Kinzelman and seconded by Mr. Garrod to approve an
additional capital expenditure to allow for the replacement of DCU's
headquarters buildings' heating and cooling unit with a cost not to exceed
$35,000. MOTION CARRIED UNANIMOUSLY.
Personal Computers
Management Recommended the approval of an additional capital expenditure for
the acquisition of personal computers (including software and peripherals) in
the amount of $50,000.
* It was moved by Mr. McEachin and seconded by Mr. Gillett to approve an
additional capital expenditure for the acquisition of personal computers in
the amount of $50,000. MOTION CARRIED UNANIMOUSLY.
Charge Offs
Mr. Gray reviewed this month's Charge Off Report.
* It was moved by Mr. Garrod and seconded by Ms. Ritchie to approve the
Charge Offs in the amount of $86,842.44 for the month of August, 1995.
MOTION CARRIED UNANIMOUSLY.
Change In Loan Policy
Mr. Gray reviewed the Change in Loan Policy Recommendation which would
increase the maximum unsecured debt limit to any one member from $25,000 to
$50,000. The $50,000 limit will give management the flexibility to
effectively service that portion of the membership who qualify and desire
this level of unsecured debt. (The current $25,000 limit is not a
restriction placed on DCU by any regulatory agency.)
* It was moved by Mr. Garrod and seconded by Ms. Ritchie to increase DCU's
maximum unsecured debt limit to any one member, from $25,000 to $50,000.
MOTION CARRIED UNANIMOUSLY.
IV. COMMITTEE REPORTS
SUPERVISORY COMMITTEE
Mr. Ketz, Supervisory Committee Chairman, updated the Board on the following
topics discussed during the last Supervisory Committee meeting which was held
on August 21, 1995:
* Financial Overview * Audit Results
* Student Loan Program * Regulatory Compliance Schedule
* Internal Auditor Policy * Internal Auditor Interviews
There is a new Federal Filing Requirement that requires credit union's, which
have student loans, to have a Student Loan Audit performed by September 30,
1995. DCU currently does not have any Student Loans. O'Rourke Clark &
Sacher, DCU's External Auditors, are investigating this and will inform Mr.
Ketz by September 1, 1995 as to whether this audit needs to be performed.
The Committee has submitted a Draft Internal Auditor Policy to Joe Melchione,
DCU's General Counsel, who has reviewed and made minor changes to it. After
reviewing these changes, the Committee will submit a copy to the Board for
approval.
Mr. Ketz has interviewed two applicants for DCU's Internal Auditor position
and discussed the applicants' qualifications with the Committee. The
Committee made a recommendation to hire one of the applicants. Management is
currently checking references on this applicant and expects the reference
check and hiring process to be completed by the end of this week.
Finance Committee
Mr. McEachin noted that the following issues were discussed at the Finance
Committee on Friday, August 25, 1995:
* Proposal to change the Unsecured Loan Limit from $25,000 to $50,000.
* Additional Capital Expenditures for the Home Banking System and for
Personal Computers.
* Investment Strategy: The strategy vs. where we are today.
* Routine periodic review of our Corporate Credit Union, Eastern Corporate
Federal Credit Union (EasCorp).
Human Resource Committee
No formal report was given
Credit Appeals Committee
No formal report was given
V. OLD BUSINESS
None
VI. NEW BUSINESS
Mr. McEachin noted that he attended a CUES Conference in early August which
was well received and very informative. He would highly recommend this
conference to other Board Members.
Mr. Garrod asked for input concerning changing the Board Meeting time
schedule from 4:00 p.m. to 5:00 p.m. The Board discussed this issue and
reached a consensus that 4:00 p.m. is a more suitable time for everyones'
schedules.
Mr. Garrod requested that decisions regarding redaction of sections of Board
Meeting minutes be made explicitly at the time the minutes are approved by
the Board. Mr. Garrod expressed the opinion that this process would ensure
that redactions only get made when absolutely necessary; and that at present,
redactions are made through a less structured process after formal minute
approval. The Board discussed this issue and Mr. Gransewicz requested that
Mr. Garrod submit a recommendation in writing for next month's Board Agenda,
stating exactly what sections he would like the board to consider redacting.
Mr Garrod agreed. It was clarified that after Board Minutes are approved by
the Board, the Recording Secretary will have one week to complete all
redactions and forward them to the Board Secretary for approval and posting.
At 5:00 p.m., the Board convened into EXECUTIVE SESSION to discuss a Board
Policy. Senior Management and the Recording Secretary left the meeting at
that time .
VII. ADJOURNMENT
The Board adjourned the meeting at approximately 5:10 p.m.
Philip J. Gransewicz David J. Garrod
Board Chairman Board Secretary
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% From: [email protected]
% Message-Id: <[email protected]>
% To: rowlet::ainsley, wldbil::kilgore, molar::delbalso
% Subject: August 28th DCU BOD minutes - please post
|
| 2.54 | Discussion in 954 | ROWLET::AINSLEY | Less than 150kts is TOO slow! | Wed Sep 27 1995 09:49 | 54 |
| From: US2RMC::"[email protected]" 26-SEP-1995 22:17:49.29
To: rowlet::ainsley, wldbil::kilgore, molar::delbalso
CC:
Subj: Sept 11th DCU BOD Telephone Vote Minutes - please post
Digital Employees' Federal Credit Union
Telephone Board Meeting
September 11, 1995
The telephone conference meeting commenced at approximately 4:10 p.m.
GENERAL SESSION
I. Roll Call and Determination of Quorum
Present: David Garrod
Christopher Fillmore-Gillett
Philip Gransewicz
Gim Hom
Paul Kinzelman
Thomas McEachin
Elaine Ritchie
Staff: Carlo Cestra, President/CEO
Kim Gates, Recording Secretary
It was unanimously agreed that the reward of $25,000 that the Board had
previously authorized would be given to Father Stan Puryear for the
apprehension of Richard Mangone.
It was also unanimously agreed to give Joe Melchione the authority to execute
the necessary documents to release the credit union from any further
obligation.
The meeting was adjourned at approximately 4:30 p.m.
Philip J. Gransewicz David J. Garrod
Chairman Secretary
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% Date: Tue, 26 Sep 1995 22:45:24 -0400
% From: [email protected]
% Message-Id: <[email protected]>
% To: rowlet::ainsley, wldbil::kilgore, molar::delbalso
% Subject: Sept 11th DCU BOD Telephone Vote Minutes - please post
|
| 2.55 | Discussion in 960 | ROWLET::AINSLEY | Less than 150 kts. is TOO slow! | Wed Nov 15 1995 08:06 | 166 |
| From: US2RMC::"[email protected]" 14-NOV-1995 21:52:32.22
To: rowlet::ainsley, wldbil::kilgore, molar::delbalso
CC:
Subj: Sept 21st DCU Board Minutes -- please post
Digital Employees' Federal Credit Union
Board of Directors' Meeting
Thursday, September 21, 1995
The meeting, held in the Ebb Tide Room of the Samoset Resort on the Ocean in
Rockport, Maine, in conjunction with the 1995 Strategic Planning Conference,
commenced at approximately 1:00 p.m.
GENERAL SESSION
I. Roll Call and Determination of Quorum
Present: David Garrod, Secretary
Christopher Fillmore-Gillett, Vice Chairman
Philip Gransewicz, Chairman
Gim Hom
Paul Kinzelman
Thomas McEachin, Treasurer
Elaine Ritchie
Staff: Carlo Cestra, President/CEO
Tim Garner, Vice President of Marketing Kim Gates, Recording Secretary
Tom Gray, Vice President of Lending
Jim Regan, Vice President/CFO
Donna Russo, Human Resources Director
Tom Ryan, Vice President of Operations
II. Review of Minutes
The Board reviewed the August 28, 1995, Board Meeting minutes. The following
changes were submitted:
* Page 2, a. Management Reports - in the next to last sentence of the
Marketing Update, replace "DEC" with "Digital".
* Page 4, VI. New Business - replace the first sentence of the third
paragraph with "Mr. Garrod requested that decisions regarding redaction of
sections of Board Meeting minutes be made explicitly at the time the minutes
are approved by the Board. Mr. Garrod expressed the opinion that this
process would ensure that redactions only get made when absolutely necessary;
and that at present, redactions are made through a less structured process
after formal minute approval."
* Page 4, VI. New Business - replace the fourth paragraph with "At 5:00
p.m., the Board convened into EXECUTIVE SESSION to discuss a Board Policy.
Senior Management and the Recording Secretary left the meeting at that time."
* It was moved by Mr. McEachin and seconded by Mr. Hom to approve the
minutes as amended. Motion carried unanimously.
Mr. Garrod requested the August 28, 1995, Board Meeting minutes be published
as is with no redactions.
The Board reviewed the September 11, 1995, Telephone Board Meeting minutes.
* It was moved by Mr. Gillett and seconded by Mr. Garrod to approve the
minutes as written. Motion carried unanimously.
Mr. Garrod requested the September 11, 1995, Telephone Board Meeting minutes
be published as is with no redactions.
III. Management Reports
a. Department Updates
Mr. McEachin questioned the necessity for the extension of the filing
deadline for the IRS Form 5500. Ms. Russo explained that the required audit
reports were not available at the time of the original deadline - which was
July 31, 1995.
Mr. Garrod informed Mr. Ryan that he had members who would like to volunteer
to test our Home Banking System. He will provide Mr. Ryan with a list
including their name, badge number, and telephone number. Mr. Ryan will
monitor the testing. Mr. Gransewicz indicated that the volunteers need to
provide constant feedback.
Mr. Gillett questioned what procedure should be used by the Board to suggest
groups for Field of Membership expansion at DCU. Mr. Garner asked they
inform him and/or the Business Development Manager, Carol Malouin. Mr.
McEachin questioned the restriction of competitors of Digital Equipment
Corporation not being considered for membership. Mr. Cestra will discuss
this issue with the Liaisons. Mr. Kinzelman asked if members who close their
membership but then want to rejoin would be eligible. Mr. Garner will
contact the NCUA regarding this. Mr. Garrod suggested the Digital Alumni
Association be considered as a chartered SEG.
Mr. Garrod requested we include a listing of our current savings and loan
rates in the monthly package of information provided to the Board.
b. Recommendations
* It was moved by Mr. McEachin and seconded by Mr. Gillett to approve the
Amendment of Charter/ ByLaws adding Northern Telecom, Inc. Motion carried
unanimously.
* It was moved by Mr. Gillett and seconded by Mr. Garrod to approve the
charge offs, in the amount of $83,742.44, for the month of September. Motion
carried unanimously.
* It was moved by Mr. Kinzelman and seconded by Mr. Hom to appoint the
following CUSO Directors:
Mr. Gransewicz, Mr. Gillett, Mr. McEachin, and Mr. Garrod. Motion carried
unanimously.
IV. Committee Reports
a. Supervisory Committee
No formal report was given.
b. Finance Committee
No formal report was given.
c. Human Resource Committee
No formal report was given.
d. Credit Appeals committee
No formal report was given.
Mr. Gransewicz announced the members of the Human Resource Committee, in
addition to himself, are Mr. Gillett and Mr. Hom. The members of the Finance
Committee, in addition to himself, are Mr. Gillett, Mr. McEachin, and Ms.
Ritchie.
V. Old Business
none
VI. New Business
none
* It was moved by Mr. McEachin and seconded by Mr. Hom to adjourn the
meeting at approximately 1:30 p.m. Motion carried unanimously.
Philip J. Gransewicz David J. Garrod
Chairman Secretary
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% From: [email protected]
% Message-Id: <[email protected]>
% To: rowlet::ainsley, wldbil::kilgore, molar::delbalso
% Subject: Sept 21st DCU Board Minutes -- please post
|
| 2.56 | Discussion in 962 | MOLAR::DELBALSO | I (spade) my (dogface) | Mon Dec 11 1995 11:24 | 207 |
| From: US2RMC::"[email protected]" 10-DEC-1995 15:36:40.97
To: rowlet::ainsley, molar::delbalso, wldbil::kilgore
CC:
Subj: DCU Oct 23rd BoD minutes - please post
Digital Employees' Federal Credit Union
Board of Directors' Meeting
Monday, October 23, 1995
The meeting, held in the second floor Training Room of Digital Employees'
Federal Credit Union's (DCU's) Headquarters facility, commenced at
approximately 4:05 p.m.
GENERAL SESSION
I. Roll Call and Determination of Quorum
Present: David Garrod, Secretary
Christopher Fillmore-Gillett, Vice Chairman
Philip Gransewicz, Chairman
Gim Hom
Paul Kinzelman (via conference call)
Thomas McEachin, Treasurer (via conference call)
Elaine Ritchie
Also Present: Alan Heintz, Supervisory Committee Member
Larry Seiler, Supervisory Committee Secretary
Staff: Carlo Cestra, President/CEO
Tim Garner, Vice President of Marketing
Kim Gates, Recording Secretary
Tom Gray, Vice President of Lending
Mike Moriarty, Internal Auditor
Jim Regan, Vice President/CFO
Donna Russo, Human Resources Director
Tom Ryan, Vice President of Operations
Mr. Cestra introduced DCU's Internal Auditor, Michael Moriarty.
Mr. Gransewicz noted the following additions to today's agenda:
- Under Recommendations, Item 5 - Internal Auditing Policy
- Under New Business, Item B - Mission Statement
- Under New Business, Item C - Bonus Dividend
II. Review of MInutes
The Board reviewed the September 21, 1995, Board Meeting Minutes. The
following change was requested:
* Add the phrase "in conjunction with the 1995 Strategic Planning
Conference" to the first sentence.
* It was moved by Mr. Gillett and seconded by Mr. Garrod to approve the
minutes as amended. Motion carried unanimously.
Mr. Garrod requested the September 21, 1995, Board Meeting minutes be
published with no redactions.
III. Management Reports
a. Department Updates
Mr. Hom questioned the procedure regarding Escheat Accounts. Mr. Ryan
explained that if an account is inactive for a 2-year period, the Credit
Union makes several attempts to notify the member and encourages them to
activate their account. If the account remains inactive for another 12
months, regulations require DCU to close the account and forward the funds
to the State of Massachusetts.
Mr. McEachin questioned what MSIC, our newest SEG is. Mr. Garner explained
that MSIC, Massachusetts Share Insurance Corporation, provides share
insurance to credit unions as a supplement to NCUA coverage.
Mr. Garrod questioned what the Loan Charge-Off rate is for the ADVANTAGE
credit line. Mr. Gray explained that the rate is approximately 2%, as
compared to credit cards, which is less than 1%. Mr. Gray also gave the
Board an average for the last 4-year period: ADVANTAGE - 1.70%, VISA -
1.25%.
Mr. Garrod asked what the roll out schedule was for the new Alternative
Investments Product. Mr. Regan informed him that we plan to have the vendor
selected by mid-November. From that point, it will probably take another
three months before this service will be available.
Mr. Gransewicz suggested the possibility of recording an E-Mail address in
our MCIF system. Mr. Ryan will research this.
b. Recommendations
* It was moved by Mr. Gillett and seconded by Mr. Garrod to approve the
following changes to DCU's Investment Policy:
The employees holding the following positions are authorized to conduct
investment transactions for the credit union:
1. President/CEO
2. Vice President/CFO
3. Accounting Manager
Motion carried unanimously.
* It was moved by Mr. McEachin and seconded by Mr. Garrod to ratify the
Field of Membership adding the Massachusetts Share Insurance Corporation.
Motion carried unanimously.
* It was moved by Mr. Gillett and seconded by Mr. McEachin to approve the
charge offs, in the amount of $141,003.44, for the month of October. Motion
carried unanimously.
* The Board discussed the Internal Auditing Policy submitted by the
Supervisory Committee and recommended changes be made to this policy.
IV. Committee Reports
a. Supervisory Committee
Mr. Heintz gave an overview of the October 16, 1995, Supervisory Committee
Meeting:
* Reviewed financials
* The 1996 Audit Plan will be reviewed at the December 11, 1995, meeting
* Determined a Student Loan Audit is not necessary
* Department audit
b. Finance Committee
Mr. McEachin gave an overview of the October 12, 1995, Finance Committee
Meeting:
* Financial update
* Loan losses analysis
* Investment Policy changes
* Asset Liability Management position
* Bonus Dividend/Interest Refund
c. Human Resource Committee
Mr. Gillett gave an overview of the October 20, 1995, Human Resource
Committee Meeting:
* Reviewed exit interviews
* Reviewed policies and procedures
* Legal update
* EEO update
* CEO evaluation process
d. Credit Appeals Committee
No report.
e. Executive Committee
No report.
EXECUTIVE SESSION
Discussion concerning appointment of a fifth member to the Supervisory
Committee.
GENERAL SESSION
* It was proposed by Ms. Ritchie and seconded by Mr. Gillett to appoint Bill
Kilgore to a 3-year term on the Supervisory Committee. Motion carried
unanimously.
V. Old Business
none
VI. New Business
* It was proposed by Mr. McEachin and seconded by Mr. Hom to change the
mission of the Credit Union to read: "To be the primary financial
institution of our members". Motion carried unanimously.
Mr. Seiler left the meeting at 6:25 p.m.
Mr. McEachin disconnected from the conference call at 6:27 p.m.
* It was proposed by Mr. Gillett and seconded by Ms. Ritchie to accept
management's recommendation of paying a bonus dividend/interest refund for
1995. Motion carried unanimously.
Mr. Kinzelman requested that a Bylaw discussion be added to the November
agenda.
VII. Adjournment
* It was moved by Mr. Gillett and seconded by Ms. Ritchie to adjourn the
meeting at 7:25 p.m.
Motion carried unanimously.
Philip J. Gransewicz David J. Garrod
Chairman Secretary
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% Date: Sun, 10 Dec 1995 15:18:32 -0500
% From: [email protected]
% Message-Id: <[email protected]>
% To: rowlet::ainsley, molar::delbalso, wldbil::kilgore
% Subject: DCU Oct 23rd BoD minutes - please post
|
| 2.57 | | ROWLET::AINSLEY | Less than 150 kts. is TOO slow! | Mon Jan 22 1996 07:59 | 203 |
| From: US2RMC::"[email protected]" 21-JAN-1996 23:21:58.28
To: rowlet::ainsley, wldbil::kilgore, molar::delbalso
CC:
Subj: DCU November 27th BoD minutes - please post
Digital Employees' Federal Credit Union
Board of Directors' Meeting
November 27, 1995
The meeting, held in the second floor Training Room of Digital Employees'
Federal Credit Union's (DCU's) Headquarters facility, commenced at
approximately 4:10 p.m.
GENERAL SESSION
I. Roll Call and Determination of Quorum
Present: David Garrod, Secretary
Christopher Fillmore-Gillett, Vice Chairman
Philip Gransewicz, Chairman
Gim Hom
Paul Kinzelman (via conference call)
Thomas McEachin, Treasurer
Elaine Ritchie
Also Present: Horace Turner, Supervisory Committee Member
William Kilgore, Supervisory Committee Member
Carlo Cestra, President/CEO
Tim Garner, Vice President of Marketing
Kim Gates, Recording Secretary
Tom Gray, Vice President of Lending
Mike Moriarty, Internal Auditor
Jim Regan, Vice President/CFO
Donna Russo, Human Resources Director
Tom Ryan, Vice President of Operations
The Board welcomed the newly-appointed Supervisory Committee Member, Bill
Kilgore.
There was an addition to today's agenda: Alternative Investment Overview.
II. Review of Minutes
A. The Board reviewed the October 23, 1995, Board Meeting Minutes. The
following changes were requested:
* Under Department Updates, change the first sentence of the fourth item to
read: "Mr. Garrod asked what the roll out schedule was for the new
Alternative Investment Product."
* Under Department Updates, change the first sentence of the fifth item to
read: "Mr. Gransewicz suggested the possibility of recording an E-Mail
address in our MCIF system."
* Under Recommendations, list the changes to DCU's Investment Policy: "the
employees holding the following positions are authorized to conduct
investment transactions for the credit union:
1. President/CEO
2. Vice President/CFO
3. Accounting Manager"
* After the Committee Reports, add: "EXECUTIVE SESSION - Discussion
concerning appointment of a fifth member to the Supervisory Committee."
* In the vote that follows, change Elaine Ritchie to: "Ms. Ritchie".
* It was moved by Mr. Gillett and seconded by Ms. Ritchie to approve the
minutes as amended. Motion carried unanimously.
B. The Board reviewed the various Telephone Votes Minutes. The following
changes were requested:
* In the first vote, correct the spelling of "XXXXXXXXX".
* In the last two votes, correct the spelling of "abstained".
* It was moved by Mr. Gillett and seconded by Mr. Hom to approve the minutes
as amended. Motion carried unanimously.
III. Management Reports
a. Department Updates
1. Alternative Investment Overview
Mr. Regan informed the Board that Management has selected FNIC - Financial
Network Investment Corporation - to offer alternative investment products to
members of the credit union. Mr. Turner requested that FNIC financials be
sent to him. Mr. Regan explained that a CUSO would need to be established in
order to provide these services.
* It was moved by Mr. McEachin and seconded by Mr. Gillett to elect the
following as Directors of the CUSO:
1. Carlo Cestra
2. James Regan
3. Thomas Ryan
Motion carried unanimously.
B. Recommendations
* It was moved by Mr. Gillett and seconded by Ms. Ritchie to approve the
extension of the outstanding construction loan to Member #XXXXXX. Motion
carried unanimously.
* It was moved by Mr. Garrod and seconded by Mr. Hom to approve the
following changes to DCU's Loan Policy. Motion carried - 6 in favor. Mr.
Gillett abstained to avoid any conflict of interest with regards to a loan in
progress.
1. Remove the age of vehicle limitation.
2. Allow terms up to 60 months on used motorcycles.
3. Allow members to finance 100%, plus tax and filing fees, on new and used
motorcycles.
Mr. Gray left the meeting at 5:15 p.m.
Mr. Turner left the meeting at 5:30.
The Board was informed that the 1996 Business Plan was reviewed at the
Finance and Investment Committee Meeting held November 13th. The Committee
unanimously agreed to recommend that the Board approve the Plan as submitted
by Management.
* It was moved by Mr. Gillett and seconded by Ms. Ritchie to approve the
1996 Business Plan as submitted by Management. Motion carried unanimously.
* It was moved by Mr. McEachin and seconded by Mr. Hom to approve the charge
offs, in the amount of $120,825.31, for the month of November. Motion
carried unanimously.
IV. Committee Reports
a. Supervisory Committee
No Report.
b. Finance Committee
Mr. McEachin reiterated that the Committee met on November 13th and
thoroughly reviewed the proposed 1996 Business Plan. It was unanimously
recommended that the Board approve the Plan as submitted by Management.
c. Human Resource Committee
Mr. Gillett gave an overview of the meeting held earlier today:
* CEO evaluation
* Personnel Policy changes
d. Credit Appeals Committee
No report.
e. Executive Committee
No report.
V. Old Business
None.
VI. New Business
a. Bylaws
After an active discussion, it was agreed that Mr. Kinzelman will move
forward with recommendations to the Board with regards to moving a set of
policies into bylaws.
VII. Adjournment
* It was moved by Mr. Hom and seconded by Mr. Gillett to adjourn the meeting
at approximately 7:00 p.m. Motion carried unanimously.
Philip J. Gransewicz David J. Garrod
Chairman Secretary
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% Subject: DCU November 27th BoD minutes - please post
|
| 2.58 | Discussion in 972 | MOLAR::DELBALSO | I (spade) my (dogface) | Wed Jan 31 1996 09:07 | 221 |
| From: US2RMC::"[email protected]" 30-JAN-1996 21:38:53.83
To: rowlet::ainsley, wldbil::kilgore, molar::delbalso
CC:
Subj: DCU December 1995 BoD minutes -- please post
DIGITAL EMPLOYEES" FEDERAL CREDIT UNION
Board of Directors' Meeting
Monday, December 18, 1995
The meeting, held in the second floor Training Room of Digital Employees'
Federal Credit Union's (DCU') Headquarters facility (141 Parker Street,
Maynard, MA), commenced at approximately 4:10 p.m.
GENERAL SESSION
I. Roll Call and Determination of Quorum
Present: Dave Garrod, Secretary
Chris Fillmore-Gillett, Vice Chairman
Phil Gransewicz, Chairman
Gim Hom
Paul Kinzelman (via conference call)
Tom McEachin, Treasurer
Elaine Ritchie
Also Present: Horace Turner, Supervisory Committee Member
Carlo Cestra, President/CEO
Stephanie Duggan, Recording Secretary
Tim Garner, Vice President of Marketing
Tom Gray, Vice President of Lending
Mike Moriarty, Internal Auditor
Jim Regan, Vice President/CFO
Donna Russo, Human Resources Director
Tom Ryan, Vice President of Operations
I. Roll Call and Determination of Quorum
The following agenda additions were made:
Recommendations: 4. CUSO Resolutions
5. Ratification of Internal Auditing Policy
New Business: B. Trip Report - Chris Gillett
C. Executive Session - 1995 CEO Evaluation
II. Review of Minutes
A. The following changes to the November 27, 1995, Board Meeting Minutes
were requested:
Under B. Recommendations, second asterisk: add "Mr. Gillett abstained to
avoid any conflict of interest with regards to a loan in progress."
Under VI. New Business, a. Bylaws: Replace sentence with: "Mr. Kinzelman
will move forward with recommendations to the Board with regards to moving a
set of policies into bylaws."
It was noted that future telephone vote minutes should include specific names
and votes of the available Board members.
* It was moved by Mr. Garrod and seconded by Mr. Gillett to approve the
minutes as amended. Motion carried unanimously.
III. Management Reports
A. Updates
Management agreed to the Board's request that financials and Annual Reports
of all groups added to DCU's field of membership in the future should be
shared with the Board. The Board also requested that Management look into
adding major universities to our field of membership.
Mr. Cestra provided a letter to the Board outlining DCU's 1995
accomplishments. He praised the Board, Management Team, and staff for their
outstanding efforts throughout the year.
Mr. Regan provided copies of a memo outlining DCU's Alternative Investment
CUSO Arrangements.
B. Recommendations
* It was moved by Mr. Hom and seconded by Mr. Garrod to add Smith and
Nephew Endoscopy to DCU's Charter as well as ratify the approval of ASPEN
Systems, Inc. and Specialists of Software as streamlined expansion groups
(SEGs). Motion carried unanimously.
* It was moved by Mr. Gillett and seconded by Mr. Hom to declare and
authorize the payment of dividends, in the amount of $3,370,000, for the
fourth quarter of 1995 as well as ratify the dividend rates as of December
11, 1995. Motion carried unanimously.
* It was moved by Mr. McEachin and seconded by Mr. Garrod to approve the
Charge Offs, in the amount of $88,036.16, for the month of December, 1995.
Motion carried unanimously.
* It was moved by Mr. Gillett and seconded by Ms. Ritchie that the officers
of Capewind Service Corporation ("Capewind"), and each of them, are hereby
authorized to dissolve Capewind forthwith and, in connection therewith, to
execute all documents, incur and pay all expenses, file all papers
(including, without limitation, with the Secretary of the Commonwealth and
Department of Revenue of Massachusetts), and take all other action that they,
or any of them, may deem necessary or desirable in connection therewith and
for the purpose of effecting the dissolution of Capewind effective December
31, 1995. Motion carried unanimously.
* It was moved by Ms. Ritchie and seconded by Mr. Garrod that the officers
of DCU Land Development Corporation ("Land Development"), and each of them,
are hereby authorized to dissolve Land Development forthwith and, in
connection therewith, to execute all documents, incur and pay all expenses,
file all papers (including, without limitation, with the Secretary of the
Commonwealth and Department of Revenue of Massachusetts), and take all other
action that they, or any of them, may deem necessary or desirable in
connection therewith and for the purpose of effecting the dissolution of Land
Development effective December 31, 1995. Motion carried unanimously.
* It was moved by Mr. Gillett and seconded by Mr. Hom to ratify the amended
version of DCU's Internal Auditing Policy provided by Supervisory Committee
Member, Horace Turner. Motion carried unanimously.
IV. Committee Reports
a. Human Resource Committee
Ms. Russo explained that the goals for the CEO Evaluation were discussed at
the meeting, held prior to today's Board meeting. The committee agreed to
edits based on suggestions and comments from the last meeting. The
evaluation criteria will be brought to the next Board meeting.
b. Supervisory Committee
Mr. Turner provided the following report:
The committee met on Monday, December 11, 1995, and reviewed Financial and
Operating information.
The credit union's external accountants, O'Rourke, Clark, & Sacher, provided
updates on Federal Student Loan Audit requirements, as well as an interim
update on DCU's Annual Audit, now in progress.
Mr. Gray gave an overview of the Collections Department operations. This is
in keeping with an ongoing understanding with management to provide
departmental reviews as a means of keeping the committee informed of
operations.
Mr. Moriarty presented the internal audit plan for 1996. The committee
reviewed the plan in detail and accepted it. He also shared his November,
1995, Internal Audit Report to the CEO.
Mr. Moriarty also gave an update on the NCUA conference which he recently
attended. He provided the Committee with drafts of proposed regulations
affecting the conduct and responsibilities of Supervisory Committees, which
are now before the NCUA for approval. It was noted that the actual text of
these regulations will be brought before the Board after the Committee's next
meeting.
The Committee voted to accept the recommendations of the Board of Directors
for amendments to the proposed DCU Internal Audit Policy. The Committee also
voted to make the minutes of its meetings available to the membership.
c. Finance/Investment Committee
No Report.
d. Credit Appeals Committee
No Report.
V. Old Business
None.
VI. New Business
a. Indemnification of New Supervisory Committee Member
* It was moved by Mr. McEachin and seconded by Mr. Garrod to indemnify
Supervisory Committee Member, William T. Kilgore. Motion carried
unanimously.
b. Trip Report
Mr. Gillett provided copies of his Trip Report for the CUES Directors'
Conference & Preconference, held in Orlando, Florida from December 3 - 6,
1995. He noted that DCU is far ahead of other credit unions and is rapidly
growing into a state-of-the-art credit union, with policies, strategies, and
procedures in place now that other credit unions are only contemplating.
The Board asked that Management leave the room at this time.
EXECUTIVE SESSION
c. 1995 CEO Evaluation
xxx
d. President/CEO Final Relocation Expenses
xxx
GENERAL SESSION
VII. Adjournment
* It was moved by Mr. McEachin and seconded by Mr. Hom to adjourn the
meeting at approximately 5:30 p.m. Motion carried unanimously.
Philip J. Gransewicz David J. Garrod
Chairman Secretary
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% To: rowlet::ainsley, wldbil::kilgore, molar::delbalso
% Subject: DCU December 1995 BoD minutes -- please post
|
| 2.59 | Discussion in 981.* | ROWLET::AINSLEY | Less than 150 kts. is TOO slow! | Mon Mar 04 1996 07:54 | 312 |
| From: US2RMC::"[email protected]" 3-MAR-1996 22:33:03.35
To: rowlet::ainsley, wldbil::kilgore, molar::delbalso
CC:
Subj: DCU January BoD minutes - please post
DIGITAL EMPLOYEES" FEDERAL CREDIT UNION
Board of Directors' Meeting
Monday, January 22, 1995
The meeting, held in the second floor Training Room of Digital Employees'
Federal Credit Union's (DCU's) Headquarters facility (141 Parker Street,
Maynard, MA), commenced at approximately 4:05 p.m.
GENERAL SESSION
I. Roll Call and Determination of Quorum
Present: David Garrod, Secretary
Christopher Fillmore-Gillett, Vice Chairman
Philip Gransewicz, Chairman (via conference call)
Gim Hom
Paul Kinzelman (via conference call)
Thomas McEachin, Treasurer (via conference call)
Elaine Ritchie
Also Present: Carlo Cestra, President/CEO
Stephanie Duggan, Recording Secretary
Tim Garner, Vice President of Marketing
Tom Gray, Vice President of Lending
Bob Ketz, Supervisory Committee Chairman
Bill Kilgore, Supervisory Committee Member
Mike Moriarty, Internal Auditor
Jim Regan, Vice President/CFO
Donna Russo, Human Resources Director
Tom Ryan, Vice President of Operations
Larry Seiler, Supervisory Committee Member
The following agenda additions were made:
Recommendations: 3. Bonus Dividend Ratification
New Business: A. Trip Report - Elaine Ritchie
B. Election Rules - Dave Garrod
II. Review of Minutes
A. The following changes to the December 18, 1995 Board Meeting Minutes were
requested:
Under VI. New Business, b. Trip Report, second sentence: add the word
"growing" before the word "rapidly".
Same section, second paragraph: delete "and Supervisory Committee Members".
* It was moved by Mr. Garrod and seconded by Mr. Hom to approve the
December 18, 1995 Board Meeting Minutes, as amended. Motion carried
unanimously.
* It was moved by Mr. Kinzelman and seconded by Mr. Garrod to approve the
December Telephone Vote Minutes. (Five in favor, Mr. Gransewicz and Mr.
Gillett abstained as they were not available at the time of the vote.)
Motion carried.
Mr. Garrod requested that all EXECUTIVE SESSION items be redacted from the
minutes upon distribution to the membership.
III. Management Reports
A. Updates
December Financial Overview
Growth
Assets: Total assets, as of month end increased by $12.4 million to $380
million. During 1995, we achieved 10.40% growth (annualized). This result
is well ahead of the projected asset growth of 1.70% ($347 million). We
anticipate maintaining this asset level through the first few months of 1996.
Deposits: The increase in assets during December was primarily the result of
$13.6 million increase in deposits. Money market and checking account
balances grew $6.5 million and $5.1 million during the month respectively.
We are continuing to see a positive response to the tiered rate money market
product. Shares accounts increased $1.6 million during the month , while
certificates declined slightly ($20,000).
Loans: Overall, loans to members grew $6.5 million in December to $275.9
million. This growth was primarily related to our consumer loans products,
which increased $5 million (to $147 million). The growth of the consumer
loan portfolio is 26.0%. This growth was spread evenly between credit card,
new auto and used auto products. The overall level of consumer loan growth
exceeded our projections by over $18 million. This excellent growth is the
direct result of the continuing success of our enhanced products and
services as well as the associated promotions. The real estate portfolio
remained level ($128 million) during the month and grew 10.1% in 1995.
Liquidity
The credit union's liquidity position has continued to remain strong over the
past few months. Although typically this is a time of year when liquidity is
most critical, that has not been the case so far. The growth experienced in
the money market and checking products provided the primary source for loan
funding this month.
Management continues to ensure that adequate liquidity exists to fund the
anticipated loan growth (should deposit growth slow down). We are continuing
to monitor market conditions for opportunities to enhance the credit unions
liquidity position on an ongoing basis.
Capital
The gross capital ratio and net capital ratio decreased to 8.52% and 7.81%
respectively. This was due to strong asset growth during the month as well
as the expense associated with the bonus dividend accrual ($1,000,000). The
bonus dividend resulted in a 26 basis point decline in these ratios, the
remainder (approximately 20 basis points) was due to asset growth.
Asset Quality
The delinquency ratio remains at .22%, and was less than half of the budgeted
.50%. Overall management continues to actively address these loans through
diligent collection practices.
The charge-offs remained at .4% as of year end. Based on the adequacy of
the allowance for loan losses, once again, we did not book the budgeted
$100,000 provision. The allowance for loan losses remains adequately
reserved based on our historical experience as discussed at the September
board meeting. We will continue to evaluate the adequacy of the allowance
balance on a monthly basis, and record provisions as necessary.
During the month, we received approximately $800,000 in principal paydowns on
our investment portfolio. Additionally, we invested in short-term
certificates (maximum of 2 weeks) to enhance the yield on the portfolio. As
of year end there was a $10 million (4 day) certificate outstanding.
The unrealized loss on Available for Sale investments was $109,124 as of
month end. This represents an improvement of approximately $2,000 compared
with November and a $324,448 improvement compared with December of 1994. We
did not purchase or sell any investment during the month.
Profitability
Net income for the month was $285,346, prior to the accrual for the bonus
dividend. Although the bonus dividend will not be distributed to member
until January, accounting policies require the recognition of the expense in
the period the expense is associated. Since the calculation of the amount
was based on the activities of 1995, the related dividend expense is
recognized in 1995.
Our year-end net income is $3.5 million. This is $145,000 ahead of budget,
even after recording the accrual for the bonus dividend. During the month,
we incurred higher than expected cost primarily due to gain sharing
distributions and additional promotional costs. These were off-set by the
elimination of the loan loss provision for December.
Our annualized gross spread declined to 362 basis points. As stated above,
the bonus dividend accrual was the primary reason. This overall decline was
30 basis points, with the bonus dividend representing 28 basis points of the
decline.
Operating expenses increased slightly by 4 basis points to 336 basis points.
This is 20 basis points better than the original projection of 356 basis
points. This is primarily due to lower expenses (permanent differences) as
well as higher than anticipated asset growth.
Overall, our net spread result was approximately equal to our projection of
99 basis points, even after the bonus dividend accrual. The net spread was
actually 127 basis points prior to the bonus dividend accrual.
The 1995 Bonus Dividend formula and the progression of PC Branch were
discussed. Also, the Board requested that DCU's Business Development
Coordinator, Carol Malouin, make a presentation at the February Board
meeting., regarding the recruitment of new field of membership groups.
B. Recommendations
* It was moved by Mr. McEachin and seconded by Mr. Kinzelman to approve the
addition of Innotrac Corporation and Liquid Metronics Division (LMI) to our
charter. Motion carried unanimously.
* It was moved by Mr. Gransewicz and seconded by Ms. Ritchie to approve the
Charge Offs, in the amount of $65,757.87, for the month of January, 1996.
Motion carried unanimously.
* It was moved by Mr. Gransewicz and seconded by Mr. Kinzelman to ratify a
Bonus Dividend distribution to the membership, in the total amount of
$1,000,000, for 1995. Motion carried unanimously.
Mr. Cestra noted that, as we go forward, management will focus on returning
excess earnings to the membership through higher dividend rates on savings
vehicles, lower interest rates on loans, and improved services
IV. Committee Reports
A. Supervisory Committee
Mr. Ketz submitted the following report to the Board:
[The Committee last met on January 15, 1996. All members of the committee
participated, three in person, two via telephone hook-up. The committee
wishes to thank the Board for ratifying the proposed Internal Auditor Policy,
as it will be a great asset to Mr. Moriarty in the future.
The committee, as a routine process, reviewed all recent audit activity and
findings. We are satisfied that corrective action, when required, has or is
being taken. Also, as a normal course, we reviewed the current financial
condition and ratios of the credit union.
Controls around the PC Electronic Banking Facility were reviewed. We are
satisfied that adequate security has been incorporated into the system. We
did request a follow up action item to see if member authorized, automatic
payments could be confirmed independently to the member. This item is being
investigated by the auditor.
We reviewed the proposed NCUA regulations regarding the role of the
Supervisory Committee. I believe the subject should be addressed as a topic
at a future Board meeting. I have attached the proposed regulation for the
Board to review. I will make the committee available to the Board for a
discussion on this topic at a future meeting.
Actions Taken: Approved the publishing of the minutes of the Supervisory
Committee in the Digital Notes File, as well as making them available for all
branches and also approved the 1996 Audit Plan as proposed by the Internal
Auditor and as adjusted by the committee.]
The Board agreed that the proposed NCUA regulations will be discussed at the
February Board meeting. It was also agreed that the Financial Overview will
be included in the Board Meeting Minutes, going forward.
B. Finance/Investment Committee
The committee held no meeting.
C. Human Resource Committee
Ms. Russo explained that the committee met prior to today's meeting and
addressed the following:
CEO Evaluation (two handouts) - The committee is recommending a simple, yet
effective process for the 1995 CEO Evaluation. Mr. Gillett asked that the
Board review the handouts and provide any input to him by February 5 - the
committee will meet to finalize the process that evening.
Exit Interview Form
X
X
X
D. Credit Appeals Committee
The committee held no meeting.
V. Old Business
None.
VI. New Business
A. Trip Report
Elaine Ritchie submitted copies of her Trip Report for the CUES Directors'
Conference & Preconference, held in Orlando, Florida from December 3 - 6,
1995. She highly recommended this conference for other Board members and
asked that they review the report and contact her with any questions. She
also made a special note of information she obtained for the
Finance/Investment Committee regarding Regulation 703 - the Board's liability
over investments made by the credit union.
B. Election Rules
Mr. Garrod distributed copies of the proposed Election Rules for the Board's
review. After some discussion, it was decided that all Board members should
submit their input to Mr. Garrod for consideration by an ad-hoc committee.
Mr. Garrod agreed to lead the ad-hoc committee, consisting of Ms. Ritchie,
Mr. Hom, and Mr. Gransewicz. The committee will review all suggestions
before bringing their recommendations to the February Board Meeting.
C. Nominating Committee
Mr. Gransewicz announced the following 1996 Nominating Committee Members:
Mark Buda
Jack Del Balso
Ken Backaler
Chris Fillmore-Gillett - advisor (cannot vote)
VII. Adjournment
* It was moved by Mr. Hom and seconded by Mr. Kinzelman to adjourn the
meeting at approximately 5:30 p.m. Motion carried unanimously.
_______________ _________________
Philip J. Gransewicz David J. Garrod
Chairman Secretary
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% To: rowlet::ainsley, wldbil::kilgore, molar::delbalso
% Subject: DCU January BoD minutes - please post
|
| 2.60 | Discussion in #989 | MOLAR::DELBALSO | I (spade) my (dogface) | Sat Apr 20 1996 08:42 | 338 |
| From: US2RMC::"[email protected]" 19-APR-1996 23:52:32.67
To: rowlet::ainsley, wldbil::kilgore, molar::delbalso
CC:
Subj: DCU BoD February minutes -- please post, including my lead in
Attached are the minutes of the February DCU Board of Directors
meeting. I apologize for the delay in making these available.
Unfortunately a number of factors caused the delay, not the
least of which was that I didn't want to publish the minutes
until I had received the financial overview which managed to get
lost in the Internet/AOL cloud for a period of time.
Regards,
Dave Garrod
Secretary DCU Board of Directors
DIGITAL EMPLOYEES" FEDERAL CREDIT UNION
Board of Directors' Meeting
Monday, February 26, 1996
The meeting, held in the second floor Training Room of Digital Employees'
Federal Credit Union's (DCU's) Headquarters facility (141 Parker Street,
Maynard, MA), commenced at approximately 4:00 p.m.
GENERAL SESSION
I. Roll Call and Determination of Quorum
Present: David Garrod, Secretary
Christopher Fillmore-Gillett, Vice Chairman
Philip Gransewicz, Chairman
Gim Hom
Paul Kinzelman (via conference call)
Thomas McEachin, Treasurer
Elaine Ritchie
Also Present: Carlo Cestra, President/CEO
Stephanie Duggan, Recording Secretary
Tim Garner, Vice President of Marketing
Tom Gray, Vice President of Lending
Alan Heintz, Supervisory Committee Member (via conference call)
Bob Ketz, Supervisory Committee Chairman
Bill Kilgore, Supervisory Committee Member
Joseph Melchione, General Counsel (via conference call)
Mike Moriarty, Internal Auditor
Jim Regan, Vice President/CFO
Donna Russo, Human Resources Director
Tom Ryan, Vice President of Operations
Larry Seiler, Supervisory Committee Member
Horace Turner, Supervisory Committee Member
It was noted that the Election Rule Committee Report would be discussed at
4:30 to allow Mr. Melchione to join the meeting via conference call.
II. Review of Minutes
A. The following changes to the January 22, 1996 Board Meeting Minutes were
requested:
Under III. Management Reports, A. Updates, Profitability, sixth paragraph:
delete the second sentence.
Under A. Supervisory Committee: separate the last paragraph from the actual
report.
Under B. Finance/Investment Committee and D. Credit Appeals Committee:
indicate that the committee held no meeting.
Under VI. New Business, B. Election Rules, first sentence: change the word
"his" to the word "the".
* It was moved by Mr. Gillett and seconded by Ms. Ritchie to approve the
January 22, 1996 Board Meeting Minutes, as amended. Motion carried
unanimously.
* It was moved by Mr. Garrod and seconded by Mr. Gillett to approve the
February Telephone Vote Minutes (Six in favor, Mr. Gransewicz abstained as he
was unavailable at the time of the phone vote). Motion carried.
III. January Financial Overview
Growth
Assets: Total assets, as of month end decreased by $2.6 million to $377
million. This is reasonable, since the month ended on Wednesday (lowest
deposit day of the week). Overall, we anticipate that the asset level will
remain relatively flat (+- $5,000,000) during the first quarter of 1996.
Deposits: The decrease in assets during January was the result of $3 million
decrease in deposits. The growth in money market balances of $4.1 million was
offset by a decline in checking account balances of $7.8 million during the
month. As discussed, the decline in checking balances is a timing difference
due to the day of the week the month ends. We are continuing to see a
positive response to the tiered rate money market product. Certificate
balances increased by $2.2 million, while shares balances decreased $1.4
million.
Loans: Overall, loans to members grew $4.3 million in January to $280.5
million. This growth was primarily related to our consumer loans products
(credit cards and vehicle loans), which increased $3.7million (to $151
million). This growth is the direct result of the continuing success of
our enhanced products and services as well as the associated promotions. The
real estate portfolio remained level ($129 million) during the month.
Liquidity
The credit union's liquidity position has continued to remain strong over the
past few months. The growth experienced in the money market product
provided the primary source for loan funding this month.
Management continues to ensure that adequate liquidity exists to fund the
anticipated loan growth (should deposit growth slow down). We are continuing
to monitor market conditions for opportunities to enhance the credit unions
liquidity position on an ongoing basis.
Capital
The net capital ratio increased to 7.96%. This represents an increase of
approximately 13 basis points. This growth was mainly attributed to the
success we achieved this month financially. Through asset growth and
financial success, we anticipate maintaining capital at approximately 8.0%
during the year.
Asset Quality
The delinquency ratio and charge-off ratio remain low at .25% and .22%
respectively. Overall management continues to actively monitor the status of
our loan portfolio. Delinquent loans are addressed through diligent
collection practices.
Investments
During the month, we received approximately $700,000 in principal paydowns on
our investment portfolio. Additionally, we invested in short-term
certificates (maximum of 2 weeks) to enhance the yield on the portfolio. As
of month end there was a $15 million (1 day) certificate outstanding.
The unrealized loss on Available for Sale investments was $76,570 as of month
end. This represents an improvement of approximately $32,000 compared with
December. We did not purchase or sell any investment during the month.
Profitability
Net income for the month was $364,140. This is $142,417 better than planned
for the month of January. The major reason for this was the higher level of
assets than originally anticipated. Overall, our annualized gross spread
decreased to 388 basis points, as compared to 1995 (392 basis points before
bonus dividend). This decline of 4 basis points is consistent with our plan
to provide better rates to our members throughout the year.
Operating expenses increased slightly by 4 basis points to 340 basis points.
This is consistent with our plan. Other income was higher than planned at
95 basis points (vs. 69 basis points). Based on the product enhancements
planned for 1996 (i.e. score card and netpay enhancements), we anticipate the
level of other income to decline after the first few months of the year.
Overall, our net spread result increased to 114 basis points, 15 basis points
higher than December 1995.
IV. Committee Reports
A. Election Rules Committee
(Mr. Melchione joined the meeting via conference call at this time. Due to
his status as a possible DCU Election candidate, Mr. McEachin left the room.)
* It was moved by Mr. Garrod and seconded by Mr. Gillett to rescind the
Digital Employees' Federal Credit Union Election Campaign Rules that were
enacted by the DCU Board in the spring of 1994. This action would return the
credit union to the election procedures set forth in the DCU bylaws and
personnel policies. Motion carried unanimously.
* It was moved by Mr. Garrod and seconded by Mr. Gillett to approve a
change to Article VI Elections, Section 8 (c) (6) of the DCU Bylaws from :
6) A position statement book which contains each candidates' position
statement (or biographical data). The statements shall appear in the same
order as the order of the candidates' names on the ballot. Each statement
shall be three hundred (300) words or less and shall be printed as submitted,
unless it contains defamatory material or confidential credit union
information. The same typographical format shall be offered to all
candidates at the time statements are requested so that each candidate can
utilize similar typographical features, such as punctuation, accentuation,
and bolding.
to:
6) A position statement book which contains each candidate's position
statement (or biographical data). The statements shall appear in the same
order as the order of the candidates' names on the ballot. Each statement
shall be eight hundred (800) words or less and shall be printed as submitted,
unless it contains defamatory material or confidential credit union
information. The same typographical format shall be offered to all
candidates at the time statements are requested so that each candidate can
utilize similar typographical features, such as punctuation, accentuation,
and bolding.
Motion carried unanimously.
* It was moved by Mr. Garrod and seconded by Mr. Gillett to instruct
General Counsel to obtain NCUA approval of Article VI Elections, Section 8
(c) (6), so that the change may become effective in time for the 1996 Board
of Directors' Election. Motion carried unanimously.
* It was moved by Mr. Garrod and seconded by Mr. Gillett to approve the
following policy:
Any and all questions and issues concerning DCU elections shall be
initially directed to the Election Coordinator at Digital Employees' Federal
Credit Union, 141 Parker Street, Maynard, MA 01754 (800/328-8797, extension
xxx).
Motion carried unanimously.
* It was moved by Mr. Gillett and seconded by Ms. Ritchie to approve the
following Solicitation Policy:
No member, employee, contract worker, or candidate in any election,
shall be allowed to solicit to credit union members on credit union property
at any time for any reason. This policy shall not prevent the President/CEO
from establishing employee to employee solicitation for charitable purposes,
subject to appropriate policies.
(Five in favor, Mr. Garrod opposed.) Motion carried.
* It was moved by Mr. Garrod and seconded by Mr. Gillett to instruct DCU
Management to include the following statement in the packet of procedural
information mailed out to the candidates:
a. Upon the written request of any candidate or any candidate supporter,
DCU will, within a reasonable time, furnish a list of all Credit Union
members and their addresses, or a routine sort thereof as requested, to a
mailing house designated by the Credit Union. This mailing list may then be
used to send out one or more mailings. All costs associated with the request
of any mailing(s) shall be borne by the requesting candidate or the
requesting supporter. No candidate or candidate supporter, or any
representative(s) of them, shall have access to any of the above referenced
list(s). Such mailing(s) will not be reviewed by DCU, except DCU may refuse
to mail any material that discloses DCU confidential information, and DCU
assumes no responsibility for the contents of such mailing(s). All mailing(s)
shall contain the following legend: "This mailing has not been sent at DCU
expense and DCU has not reviewed and does not endorse this written material."
b. Any and all questions and issues concerning DCU elections shall be
initially directed to the Election Coordinator at Digital Employees' Federal
Credit Union, 141 Parker Street, Maynard, MA 01754 (800/328-8797, extension
xxx).
c. No member, employee, contract worker, or candidate in any election,
shall be allowed to solicit to credit union members on credit union property
at any time for any reason.
Motion carried unanimously.
(Mr. McEachin returned to the meeting at this time and Mr. Melchione ended
his conference call)
V. Management Reports
A. Recommendations
* It was moved by Mr. McEachin and seconded by Mr. Garrod to approve the
addition of L.P.M. Holding Company, Inc. to our Charter. Motion carried
unanimously.
* It was moved by Mr. Garrod and seconded by Mr. Gillett to ratify the
field of membership approval of EventPro Services, Inc., Century 21 - Ben
Bousquet Real Estate, and Shawn Systems, Inc. as required by the NCUA under
the Streamlined Expansion and Chartering Procedure (SEP) and Board Policies.
Motion carried unanimously.
* It was moved by Mr. McEachin and seconded by Ms. Ritchie to appoint James
F. Regan, Vice President/CFO as Digital Employees' Federal Credit Union's
representative to EasCorp. Motion carried unanimously.
* It was moved by Mr. McEachin and seconded by Mr. Hom to approve the
Charge Offs, in the amount of $68,973.21, for the month of February, 1996.
Motion carried unanimously.
VI. Committee Reports (continued)
B. Supervisory Committee
Mr. Ketz reported that the committee met with members of our External
Auditing Firm, O'Rourke, Clark, & Sacher, at their last meeting. The firm
will be making their report at the March Board Meeting.
He also referred to a memo, previously mailed to the Board, in which the
Roles, Responsibilities and Operating Procedures of the Supervisory Committee
were noted.
C. Finance/Investment Committee
Mr. McEachin reviewed the following items discussed by the committee on
February 22, 1996:
Meeting Schedule
Asset Liability Analysis, Balance Sheet, GAP, and Interest Income Simulation
DCU Compliance Regarding Proposal from NCUA - DCU is in compliance.
FASB115 Portfolio Review - produced no changes in Available for Sale items.
New Phone System - proposed capital expenditure
Factors Determining Real Estate Loan Sales by DCU
D. Human Resource Committee
Ms. Russo noted that the committee met prior to today's Board Meeting and
discussed a new policy for the Personnel Policies and Procedures Manual. The
committee was also given an update on the Rewards and Recognition Team.
* It was moved by Mr. McEachin and seconded by Mr. Garrod to approve the
adoption of the CEO Evaluation as presented at the January, 1996 Board
Meeting. Motion carried unanimously.
E. Credit Appeals Committee
The Board reviewed the counteroffer reported in the Board Package.
VII. Adjournment
* It was moved by Mr. Gillett and seconded by Mr. McEachin to adjourn the
meeting at 5:50 p.m. Motion carried unanimously.
__________________ _________________
Philip J. Gransewicz David J. Garrod
Chairman Secretary
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% Subject: DCU BoD February minutes -- please post, including my lead in
|
| 2.61 | Discussion in #995 | MOLAR::DELBALSO | I (spade) my (dogface) | Mon Jun 03 1996 21:18 | 348 |
| From: US2RMC::"[email protected]" 3-JUN-1996 19:55:20.13
To: rowlet::ainsley, wldbil::kilgore, molar::delbalso
CC:
Subj: DCU BoD March 25 minutes - please post
DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Board of Directors' Meeting
Monday, March 25, 1996
The meeting, held in the second floor Training Room of Digital Employees'
Federal Credit Union's (DCU's) Headquarters facility (141 Parker Street,
Maynard, MA), commenced at approximately 4:05 p.m.
GENERAL SESSION
I. Roll Call and Determination of Quorum
Present: David Garrod, Secretary
Christopher Fillmore-Gillett, Vice Chairman
Gim Hom
Paul Kinzelman (via conference call)
Thomas McEachin, Treasurer (via conference call)
Elaine Ritchie
Also Present: Carlo Cestra, President/CEO
Stephanie Duggan, Recording Secretary
Tim Garner, Vice President of Marketing
Tom Gray, Vice President of Lending
John Leonard, Audit Engagement Manager, O'Rourke, Clark, & Sacher
Carol Malouin, Business Development Manager
Mike Moriarty, Internal Auditor (via conference call)
Jim Regan, Vice President/CFO
Donna Russo, Human Resources Director
Tom Ryan, Vice President of Operations
Larry Seiler, Supervisory Committee Member
Absent: Philip Gransewicz, Chairman
II. O'Rourke, Clark, & Sacher Presentation
Mr. Gillett introduced John Leonard, DCU's Audit Engagement Manager from the
auditing firm of O'Rourke, Clark, & Sacher. Mr. Leonard explained that he
has been DCU's Audit Engagement Manager for three years. He has also
performed pension plan audits for the credit union and served as Teller of
Election for last year's Board of Directors' Election.
He began his presentation by thanking the DCU staff for their efficiency and
productivity in this year's audit process. He noted that the Finance,
Lending, and Auditing areas were very proactive and accommodating to the
needs of his firm.
He went on to explain that the field work for the audit was officially
completed on February 9, following his meeting with management on February 8.
He also met with the Supervisory Committee on February 9, to review the
preliminary audit findings in detail. It was noted that the financial
statements, presented to the Board at this meeting, were in their final form.
DCU experienced an excellent year in terms of its key ratios compared to
peer. The Liabilities and Equity to Assets Ratio was very strong at 7.8%;
however, the big success in 1995 was in loan growth which included a Loan to
Asset Ratio of 72%. Vehicle loans exceeded peer with an increase of 33% and
the real estate portfolio also increased while peer remained flat or even
decreased.
We ended the year with a 1% Return on Assets Ratio (ROA), even after the $1
million Bonus Dividend. The peer ratio was 1.1%. If the special dividend
had not occurred, the peer number would have been exceeded by 20 basis
points.
Our Cost of Funds to Average Assets Ratio experienced an increasing trend.
This was a result of management's decision to raise CD rates as well as the
introduction of tiered money market rates. The Operating Expense to Average
Assets Ratio was about equal to the peer number; however, the Delinquency
Ratio was half of the peer figure - .3% and .8% respectively.
The industry figure for capital reached 10% in 1995. We have successfully
reached our capital goals needed for our future plans. Mr. Leonard also
noted that DCU is the first of his firm's North Eastern clients to introduce
a PC banking product to its members. He concluded that DCU has had an
outstanding year and internal controls remain very strong. The management
letter will be in its final form this week and will be shared with the Board
at a later date.
EXECUTIVE SESSION
Internal Controls
X
X
X
X
X
X
X
X
X
X
GENERAL SESSION
III. Review of Minutes
The Board reviewed the February 26, 1996 Board Minutes and the following
changes were requested:
Under II. Committee Reports, A. Election Rules Committee, sixth motion:
Change the word "ask" to the word "instruct".
The Board also requested to include the Financial Overview in the minutes.
* It was moved by Ms. Ritchie and seconded by Mr. Hom to approve the
minutes, as amended. Motion carried unanimously.
No redactions were recommended.
IV. Management Reports
A. Field of Membership Expansion Presentation
Business Development Manager, Carol Malouin, joined the meeting at this time.
She reviewed the following procedure, which she has used during the past six
months, for expanding DCU's field of membership:
I. Contact Leads
1. Newspapers (i.e. Boston Business Journal)
2. MA & NH Business Directory (lists all businesses by city/town)
3. Referrals (received over 100 referrals from 50 DCU employees and a few
from the members)
II. Research for Information
1. Business Directory
2. On-line Service (Hoovers) for large companies only
III. Contact
1. Initial Phone Call
2. Mailing (letter, brochure, rate sheet, and location guide)
3. Phone Follow-up (assures receipt of letter and attempts to make an
appointment - to date, 300 contacts and 30 appointments)
4. Thank-you Letter
5. Phone Follow-up every 30-45 days
6. Application Process with Sample Employee Letter is Mailed (timesaver -
verbage from NCUA)
7. SEP Guidelines (overlaps in service go to NCUA for approval - typical
response within 30 days)
8. Approval Notification by Letter and Phone (ask for a list of employee
names and addresses and request to speak to the employees about our
products and services)
9. Communication and Evaluation Continues with both Members and Non-
Members
IV. Upcoming
1. SEG Manager Software (poduces management reports for group and
individual penetration as well as tickler files, correspondence letters,
etc.)
2. Chambers (DCU has joined four Chambers of Commerce and is currently
determining the best use of these resources)
3. Staff Referral Policy
4. Targeting Digital Populations (currently, Digital has more than 100
facilities with no on-site branch)
She concluded by explaining that she has received a mixed reaction to our
association with Digital. Some respect the fact that Digital is our major
sponsor while it makes others uncomfortable. Overall, our products and
services win out in the end. Currently penetration tracking is done
manually; however, the above-mentioned software should help this process. We
have roughly added between 350-400 new members through this procedure out of
a approximate potential of 1500. Direct FCU has been encountered in our
search for new groups; however, Workers' CU is has been more prevalent.
The Board congratulated Ms. Malouin on her progress and expressed their
appreciation for her attendance. She thanked the Board for giving her the
opportunity to meet with them and left the meeting.
B. Financial Overview
Growth
Assets: Total assets, as of month end increased by $15.3 million to $393
million. This is reasonable, since the month ended on Thursday (highest
deposit day of the week). Overall, we anticipate that the asset level to
continue to increase through the remainder of the first quarter.
Deposits: The increase in assets during February was the result of $14
million increase in deposits. The growth in money market balances was $5.4
million and checking account balances grew $4.9 million during the month. As
discussed, the increase in checking balances is a timing difference due to
the day of the week the month ends. We are continuing to see a positive
response to the tiered rate money market product. Certificate balances
increased by $3.2 million.
Loans: Overall, loans to members grew $3.7 million in February to $284.2
million. This growth was primarily related to our consumer loans products
(credit cards and vehicle loans), which increased $4 million (to $155
million). This growth is the direct result of the continuing success of
our enhanced products and services as well as the associated promotions. The
real estate portfolio remained level ($129 million) during the month.
Liquidity
The credit union's liquidity position has continued to remain strong over the
past few months. The growth experienced in the money market product
provided the primary source for loan funding this month. Management
continues to ensure that adequate liquidity exists to fund the anticipated
loan growth.
Capital
The net capital ratio decreased to 7.70%. This represents an decrease of
approximately 26 basis points. This decline is primarily due to the $15
million growth in assets (annualized rate of 20%) during the month.
Asset Quality
The delinquency ratio and charge-off ratio remain low at .34% and .13%
respectively. Overall management continues to actively monitor the status of
our loan portfolio and address delinquent loans through diligent collection
practices.
Investments
During the month, we received approximately $3,123,000 in principal paydowns
on our investment portfolio. This included a $2 million investment that
matured in February. During the month, we invested in short-term
certificates (maximum of 2 weeks) to enhance the yield on the portfolio. As
of month end there was a $15 million (1 day) certificate outstanding.
Additionally, we purchased 3 investments totaling $11 million in February.
The breakdown of the investments is:
Description Term Par Value
US Treasury Bill 6 Month $5,000,000
FNMA Agency 2 Year $4,000,000
FHLB Agency 2 Year $2,000,000
Based on the investment cashflow projected for the remainder of the year ($32
million), we expect to reinvest additional amounts during the remainder of
the year. The exact amounts will be determined by the level of loan growth
experienced.
The unrealized loss on Available for Sale investments was $85,123 as of month
end. This represents an increase of approximately $9,000 compared with
January. Currently, the unrealized loss on the available for sale portfolio
represents less than .5% of the current value.
Profitability
Net income for the month was $198,975. This is $19,790 better than planned
for the month of February. The major reason for this was the higher level
income (interest and other income) than originally anticipated.
Overall, our annualized gross spread remained at 380 basis points, as
compared to 1995 (392 basis points before bonus dividend). With asset growth
of $15 million during the month, interest income and dividend expense were
both higher than budget.
Operating expenses (annualized) increased by 28 basis points to 368 basis
points. This was due to the level of expenses incurred year to date, that
were planned for later in the year. Due to current timing differences
related to operating expenses, this annualized ratio is not a true reflection
of where we will end the year. Additionally, due to the current adequacy
of the balance in the allowance for loan loss, there was no provision made
in February.
Other income was higher than planned at 92 basis points (vs. 69 basis
points). A reason for the higher level was the income from loan sales
received during the month (approximately $40,000 higher than planned. Based
on the product enhancements planned for 1996 (i.e. score card and netpay
enhancements), we anticipate the level of other income to decline after the
first few months of the year to the budgeted level.
Overall, our net spread decreased to 90 basis points, 9 basis points lower
than December 1995. This remains better than the planned 86 basis points,
although early in the year it is likely we could see shifts due to timing
differences (i.e. operating expenses).
C. Recommendations
* It was moved by Mr. Garrod and seconded by Ms. Ritchie to ratify the field
of membership approval of Kelly Services, Inc., Omega Management Group Corp.,
and New Horizon's Software, Inc., as required by the NCUA under the
Streamlined Expansion and Chartering Procedure (SEP) and Board Policies.
Motion carried unanimously.
* It was moved by Mr. McEachin and seconded by Mr. Kinzelman to approve the
following amendment to Article VIII Definitions, Section 2 of DCU's Bylaws:
"(a) "Members of their immediate families" includes persons related by
blood, marriage, or adoption to any person who is a member or is within the
field of membership of this credit union. It also includes persons who
reside in the same household as a person who is a member or is within the
field of membership of this credit union." Motion carried unanimously.
* It was moved by Ms. Ritchie and seconded by Mr. Hom to adopt the Amendment
to section 2.2(a) of the Membership Settlement, Loan and Security Agreement
between the Eastern Corporate Federal Credit Union (EasCorp) and Digital
Employees' Federal Credit Union. Motion carried unanimously.
* It was moved by Mr. Garrod and seconded by Ms. Ritchie to declare and
authorize the payment of dividends, for the first quarter of 1996, in the
total, estimated amount of $2,265,000, as well as ratify the dividend rates
as of March 17, 1996. Motion carried unanimously.
* It was moved by Mr. Garrod and seconded by Mr. Kinzelman to approve the
Charge Offs, in the amount of $85,598.40 for the month of March, 1996.
Motion carried unanimously.
V. Committee Reports
A. Supervisory Committee
The committee held no meeting and no formal report was submitted. Their next
meeting is scheduled for Monday, April 1, 1996.
B. Finance/Investment Committee
The committee held no meeting and no formal report was submitted. Their next
meeting is scheduled for Thursday, April 18, 1996.
C. Human Resource Committee
The committee held no meeting and no formal report was submitted. Their next
meeting is planned for April.
E. Credit Appeals Committee
The committee held no meeting and no formal report was submitted.
VI. Adjournment
* It was moved by Mr. McEachin and seconded by Ms. Ritchie to adjourn the
meeting at
5:32 p.m. Motion carried unanimously.
Philip J. Gransewicz David J. Garrod
Chairman Secretary
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% Date: Mon, 3 Jun 1996 19:28:26 -0400
% Message-Id: <[email protected]>
% To: rowlet::ainsley, wldbil::kilgore, molar::delbalso
% Subject: DCU BoD March 25 minutes - please post
|
| 2.62 | Discussion in #996 | MOLAR::DELBALSO | I (spade) my (dogface) | Mon Jun 03 1996 21:19 | 297 |
| From: US2RMC::"[email protected]" 3-JUN-1996 19:54:53.26
To: rowlet::ainsley, wldbil::kilgore, molar::delbalso
CC:
Subj: DCU BoD April 22nd minutes - please post
DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Board of Directors' Meeting
Monday, April 22, 1996
The meeting, held in the second floor Training Room of Digital Employees'
Federal Credit Union's (DCU's) Headquarters facility (141 Parker Street,
Maynard, MA), commenced at approximately 4:05 p.m.
GENERAL SESSION
I. Roll Call and Determination of Quorum
Present: David Garrod, Secretary
Christopher Fillmore-Gillett, Vice Chairman
Philip J. Gransewicz, Chairman
Gim Hom (via conference call)
Paul Kinzelman (via conference call)
Thomas McEachin, Treasurer
Elaine Ritchie
Also Present: Carlo Cestra, President/CEO
Stephanie Duggan, Recording Secretary
Tim Garner, Vice President of Marketing
Tom Gray, Vice President of Lending
Mike Moriarty, Internal Auditor
Jim Regan, Vice President/CFO
Donna Russo, Human Resources Director
Tom Ryan, Vice President of Operations
Larry Seiler, Supervisory Committee Member
Horace Turner, Supervisory Committee Member
II. Review of Minutes
The following amendment to the March 25, 1996 Board Meeting minutes was
requested:
Page 2 - EXECUTIVE SESSION: The last sentence, in reference to Mr. Leonard
leaving the meeting, should be moved to GENERAL SESSION.
* It was moved by Mr. McEachin and seconded by Mr. Gillett to approve the
minutes as amended (six in favor, one abstention - Mr. Gransewicz abstained
as he did not attend the meeting). Motion carried.
The following amendments to the April Board of Directors' Telephone Vote
Minutes were requested:
Upon redaction of these minutes, a statement should be included explaining
that a loan was approved for a member or volunteer and that the loan complies
with all DCU underwriting standards, has standard terms, and is available to
all members.
* It was moved by Mr. Gillett and seconded by Ms. Ritchie to approve the
first motion of the April 8, 1996 Telephone Vote Minutes. Motion carried
unanimously.
* It was moved by Mr. Kinzelman and seconded by Mr. Garrod to approve the
second motion of the April 8, 1996 Telephone Vote Minutes (six in favor, one
abstention) Motion carried.
* It was moved by Mr. Gillett and seconded by Mr. McEachin to approve the
April 17, 1996 Telephone Vote Minutes (six in favor, one abstention). Motion
carried.
III. Financial Overview
Growth
Assets: Total assets, as of month end increased by $10.1 million to $403
million. This represents an annualized growth rate of 24%. At this pace,
assets would be approximately $456 million as of year end. Overall, we
anticipate achieving a growth level in the range of 10 to 12 percent for
1996.
Deposits: During the month, deposits grew by approximately $11 million.
Part of this growth was the result of nearly $2.5 million in quarterly
dividends being paid. The growth in money market and savings balances was
$6.2 million and $3.3 million respectively. Additionally, checking and
certificate balances each grew by approximately $700,000.
Loans: Overall, loans to members grew $11.6 million in March to $295.8
million. This growth was primarily related to our mortgage portfolio which
grew $7.6 million. Fixed rate mortgages grew $9.6 million and adjustable
mortgages declined $2 million during the month. Approximately $3 million of
these fixed rate mortgages were subsequently sold in April.
Credit cards and vehicle loans increased approximately $4 million in total
during the month. Year to date, consumer loans have grown $11.5 million (31%
annualized growth). This tremendous growth level is a direct result of the
attractiveness of our VISA product, which has grown $5.7 million in the first
quarter. Historically, the seasonality of this product has resulted in
minimal growth in the first quarter of the year.
Liquidity
The credit union's liquidity position has continued to remain strong over the
past few months. The growth experienced in deposits provided the primary
source for loan funding this month. Management continues to ensure that
adequate liquidity exists to fund the anticipated loan growth.
Capital
The net capital ratio decreased 7 basis points this month to 7.63%. This
decline is due to the our asset growth during the month. Overall, we remain
in a strong capital position, considering our strong asset quality.
Asset Quality
The delinquency ratio and charge-off ratio remain low at .38% and .10%
respectively. Overall management continues to actively monitor the status of
our loan portfolio and address delinquent loans through diligent collection
practices.
Investments
During the month, we received approximately $700,000 in principal paydowns on
our investment portfolio. During the month, we invested in short-term
certificates (maximum of 2 weeks) to enhance the yield on the portfolio. As
of month end there was a $20 million (3 day) certificate outstanding. We
did not purchase or sell any investments during the month.
Based on the investment cash flow projected for the remainder of the year
($32 million), we expect to reinvest additional amounts during the remainder
of the year. The exact amounts will be determined by the level of loan
growth experienced.
The unrealized loss on Available for Sale investments was $86,934 as of month
end. This represents an increase of approximately $1,800 compared with
February. Currently, the unrealized loss on the available for sale
portfolio represents less than .5% of the current value.
Profitability
Net income for the month was $471,407. This is $212,403 better than planned
for the month. The major reason for this was the higher level income
(interest and other income) earned on loans and investments as a result of
our higher than expected asset growth year to date. Overall, our annualized
gross spread increased from 380 to 389 basis points.
Operating expenses (annualized) decreased 14 basis points to 354 basis
points. This remains higher than projected due to the level of expenses
incurred year to date, that were planned for later in the year. Due to
current timing differences related to operating expenses, this annualized
ratio is not a true reflection of where we will end the year. Additionally,
due to the current adequacy of the balance in the allowance for loan loss,
once again, there was no provision made in March.
Other income remains higher than planned at 82 basis points (vs. 69 basis
points) although this difference continues to shrink (down 10 basis points
from February). A reason for the higher level was the income from loan sales
received during the month (approximately $40,000 higher than planned. Based
on the product enhancements planned for 1996 (i.e. score card and netpay
enhancements), we anticipate the level of other income to decline after the
first few months of the year to the budgeted level.
Overall, our net spread increased 18 basis points to 108 basis points. This
is approximately 22 basis points higher than planned. One of the major
reasons for this is our strong asset quality. Because of our low delinquency
and charge-off experience, we have not needed to make a loan provision in
February and March. This resulted in an increase of 13 basis points in our
net spread.
Additionally, the implementation of score card and an increased number of
free network ATM transactions will continue to reduce our other income as
these programs grow.
IV. Recommendations
* It was moved by Mr. Gillett and seconded by Mr. Garrod to ratify the
nonstandard bylaw amendment to Article VI, Section 8 (c) (6), changing the
limit of words in a candidate statement to eight hundred (800) words or less
(six in favor, one abstention: Mr. McEachin abstained due to his status as a
candidate in the upcoming election). Motion carried.
* It was moved by Mr. Gillett and seconded by Ms. Ritchie to ratify the
addition of the Mansfield location of Smith & Nephew Endoscopy to our
charter. Motion carried unanimously.
* It was moved by Mr. McEachin and seconded by Mr. Hom to ratify the
addition of Manager Software Products, Inc., Carter Business Service, Inc.,
Advanced Modular Solutions, Inc.,
W. W. Wilson Associates, D.L. Maher Co., and Lattice Semiconductor
Corporation. Motion carried unanimously.
* It was moved by Mr. Gillett and seconded by Ms. Ritchie to approve the
charge offs, in the amount of $85,639.66, for the month of April, 1996.
Motion carried unanimously.
V. Committee Reports
a. Supervisory Committee
Mr. Turner reported that the committee met on April 1st and discussed the
following topics:
Final draft of O'Rourke, Clark & Sacher's Management Letter
Mr. Moriarty's monthly report to the President/CEO
Employee Dismissal
Member complaints regarding the Bill Payer Service
EXECUTIVE SESSION
Discussion regarding Supervisory Committee Minutes
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
GENERAL SESSION
b. Finance/Investment Committee Meeting
Mr. McEachin reported that the committee met on April 18th and discussed the
following topics:
Proposed Investment Strategy - the committee ratified the strategy which is
consistent with our overall plan
Quarterly Income Simulation - very little interest rate risk was found
Fixed-Rate Mortgages - the strategy to sell the mortgages, but retain the
servicing creates the best balance of risk and return
Economic Overview
c. Human Resource Committee
Mr. Gransewicz reported that the committee met just prior to this meeting and
discussed the following topics:
Legal Update
One Employee Exit Interview Form
New Exit Interview Form
Evaluation and Compensation Issues in Upper Management
He also noted that the committee would discuss an Executive Session item with
the Board at the end of this meeting.
d. Credit Appeals Committee
The committee held no meeting and no report was given.
VI. New Business
Only the Board and the Recording Secretary remained in the room at this time.
EXECUTIVE SESSION
a. President/CEO's Contract Recommendation
X
X
X
VII. Adjournment
* It was moved by Mr. McEachin and seconded by Mr. Gillett to adjourn the
meeting at
5:40 p.m.
Philip J. Gransewicz David J. Garrod
Chairman Secretary
-------------------------------------------------------
Board of Directors' Telephone Votes
EXECUTIVE SESSION
The Board approved a loan to a member and 3 loans to volunteers. These loans
comply with all DCU unterwriting standards, have standard terms, and are
available to all members.
Philip J. Gransewicz David J. Garrod
Chairman Secretary
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% To: rowlet::ainsley, wldbil::kilgore, molar::delbalso
% Subject: DCU BoD April 22nd minutes - please post
|
| 2.63 | Discussion in 1006 | ROWLET::AINSLEY | Less than 150 KTS is TOO slow | Thu Jul 25 1996 00:30 | 252 |
| From: SLOAN::HOM "24-Jul-1996 1723" 24-JUL-1996 16:18:56.40
To: ROWLET::AINSLEY,WLDBIL::KILGORE,MOLAR::DELBALSO
CC:
Subj: DCU BoD Minutes - June 24, 1996 Please post
DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Board of Directors' Meeting
Monday, June 24, 1996
The meeting, held in the second floor Training Room of Digital Employees'
Federal Credit Union's (DCU's) Headquarters facility (141 Parker Street,
Maynard, MA), commenced at approximately 4:10 p.m.
GENERAL SESSION
I. Roll Call and Determination of Quorum
Present: Christopher Fillmore-Gillett, Vice Chairman
David Garrod, Secretary
Philip Gransewicz, Chairman
Gim Hom
Paul Kinzelman (via conference call)
Thomas McEachin, Treasurer
Elaine Ritchie
Also Present: Carlo Cestra, President/CEO
Stephanie Duggan, Executive Assistant
Tim Garner, Vice President of Marketing
Tom Gray, Vice President of Lending
Michele Levesque, NCUA Examiner
Mike Moriarty, Internal Auditor (via conference call)
Jim Regan, Vice President/CFO
Tom Ryan, Vice President of Operations
Absent: Donna Russo, Human Resources Director
II. NCUA Presentation
Mr. Gransewicz welcomed Michele Levesque, the NCUA's Examiner-in-Charge for
DCU's 1996 examination, to this month's meeting. Ms. Levesque explained
that she and three other examiners conducted this year's exam in April, and
that the numbers included in her report were as of March 31, 1996 (as
compared to those of March 31, 1995).
She noted that DCU experienced excellent growth during the past 12 months.
Though it is very rare, the team of examiners did not find any exceptions
during their examination. She gave DCU the highest possible overall rating
and left a hard copy of her report for distribution to all directors.
II. Review of Minutes
The following changes to the May 18, 1996 Board Meeting Minutes were
requested by the Board:
Page 2, top: Change the first sentence to read "Mr. Garrod stated that only
the EXECUTIVE SESSION items will be redacted when these minutes are released
to the membership."
Page 2, under Asset Quality: Change the typo of .09% to .24%.
* It was moved by Mr. McEachin and seconded by Mr. Garrod to approve the
May 18, 1996 Board Meeting Minutes, as amended. Motion carried unanimously.
* It was moved by Mr. Gillett and seconded by Mr. Hom to approve the May,
1996 Telephone Vote Minutes as written (four in favor, Mr. McEachin, Ms.
Ritchie, and Mr. Gransewicz abstained as they were unavailable at the time
of the phone vote). Motion carried.
Mr. Garrod stated that only the EXECUTIVE SESSION items will be redacted
when these minutes are released to the membership.
III. Management Reports
A. Financial Overview
Growth
Assets: Total assets, as of month end increased by $11 million to $410
million. This is reasonable, since the month ended on Friday (one of the
highest deposit days of the week). Overall, we anticipate achieving a
growth level in the range of 10 to 12 percent for 1996.
Deposits: During the month, deposits increased by approximately $10
million. Part of this was the result of a $2 million and $5 million
increase in share and checking respectively. The growth in money market
was $3 million and certificate balances remained flat.
Loans: Overall, loans to members grew $16.5 million in May to $323 million.
This growth was partly related to our mortgage portfolio which grew $9.8
million. Much of the mortgage portfolio growth was primarily related to
fixed rate mortgages which grew $4.1 million.
Credit cards and vehicle loans increased approximately $6.7 million in total
during the month. Year to date, consumer loans have grown $24.2 million.
This tremendous growth level is a direct result of the attractiveness of our
VISA product and vehicle product that have grown $11.1 million and $13
million respectively.
Liquidity
The credit union's liquidity position tightened as a result of our
significant loan growth. Management continues to ensure that adequate
liquidity exists to fund the anticipated loan growth.
Capital
The net capital ratio decreased this month to 7.75%. This represents an
decrease of approximately 11 basis points. This decrease was a direct
result of an $11 million increase in assets during the month. Overall, we
remain in a strong capital position.
Asset Quality
The delinquency ratio and charge-off ratio remain low at .42% and .26%
respectively. Overall management continues to actively monitor the status
of our loan portfolio and address delinquent loans through diligent
collection practices.
Investments
During the month, we received approximately $1,144,000 in principal paydowns
on our investment portfolio. During the month, we invested in short-term
certificates (maximum of 2 weeks) to enhance the yield on the portfolio.
Based on the investment cashflow projected for the remainder of the year
($32 million), we expect to sell some investments during the year to fund
additional loan growth. The exact amounts will be determined by the level
of cash flow required to fund this growth.
The unrealized loss on Available for Sale investments was $69,211 as of
month end. This represents an decrease of approximately $389 compared with
April. Currently, the unrealized loss on the available for sale portfolio
represents less than .5% of the current value.
Profitability
Net income for the month was $396,377. This is $131,666 better than planned
for the month of May. The major reason for this was the higher level of
interest income earned on loans. Overall, our annualized gross spread
increased from 398 to 405 basis points.
Operating expenses (annualized) increased 7 basis points to 357 basis
points. This remains higher than projected due to the level of expenses
incurred year to date, that were planned for later in the year.
Additionally, due to the current adequacy of the balance in the allowance
for loan loss, once again, there was no provision made in May.
Other income declined to 83 basis points during the month of May. Although
this is still higher than budget (69 basis points) we anticipate the level
of other income to continue to decline over the next few months to the
budgeted level.
Overall, our net spread decreased 3 basis points to 125 basis points. This
is approximately 39 basis points higher than planned. One of the major
reasons for this is our strong asset quality. Because of our low
delinquency and charge-off experience, we have not needed to make a loan
provision in February, March, April and May which is a total of $360,000.
B. Recommendations
* It was moved by Mr. Gillett and seconded by Mr. McEachin to allow both
Mr. Garner and Mr. Ryan to personally accept two gifts of appreciation, sent
to them by Mr. Gary Raddon, for presenting at the Raddon Financial Group's
Boston Spotlight portion of their Spring Strategic Planning Study Group in
May. Motion carried unanimously.
* It was moved by Mr. Gillett and seconded by Ms. Ritchie to ratify the
field of membership approval of Nabnasset and Softpros, Inc., as required
by the NCUA under the Streamlined Expansion and Chartering Procedure (SEP)
and Board Policies. Motion carried unanimously.
* It was moved by Mr. McEachin and seconded by Mr. Garrod to approve the
addition of the employees of TAD Technical Services and the employees of
ORACLE, New England Development Center to our Charter. Motion carried
unanimously.
* It was moved by Ms. Ritchie and seconded by Mr. Hom to declare and
authorize the payment of dividends, for the second quarter of 1996, in the
estimated amount of $2,217,249.00, as well as ratify the dividend rates as
of June 17, 1996. Motion carried unanimously.
* It was moved by Mr. Gillett and seconded by Mr. Garrod to approve the
Charge Offs, in the amount of $115,005.77, for the month of June, 1996.
Motion carried unanimously.
IV. Committee Reports
A. Supervisory Committee
Mr. Moriarty noted that the committee met on June 12 to discuss normal
business. No formal report was submitted.
B. Finance/Investment Committee
Mr. McEachin reported that the committee met on June 20 and discussed the
following items:
Financial Projections - Due to the excellent growth achieved to date,
management will re-evaluate the financial soundness ratios in the business
plan and bring any recommendations to the committee next month.
FASB91 - In compliance with FASB91, certain expenses may be deferred over
the lifetime of some of our mortgage loans. There is an expense that may be
deferred.
Liquidity - The tracking process is working well and our liquidity position
is adequate.
C. Human Resource Committee
The committee is scheduled to meet in July. No formal report was submitted.
D. Credit Appeals Committee
No meeting was held.
V. New Business
A. Introduction Package for New Board Members
Ms. Ritchie provided draft copies of a proposed listing of required
information to be given to new board members for orientation purposes. Ms.
Ritchie worked together with Mr. Hom on this project and both requested that
the board review the document and send any comments to Ms. Ritchie.
VI. Adjournment
* It was moved by Mr. Gillett and seconded by Mr. McEachin to adjourn the
meeting at
5:50 p.m. Motion carried unanimously.
__________________________________ __________________________________
Philip J. Gransewicz David J. Garrod
Chairman Secretary
Board of Directors' Telephone Votes
June, 1996
EXECUTIVE SESSION
On July 10, 1996, the board approved a loan to a volunteer. This loan
complies with all DCU underwriting standards, has standard terms, and is
available to all members.
The loan was approved by a majority vote of the board.
____________________________________ ___________________________________
Philip J. Gransewicz David J. Garrod
Chairman Secretary
|
| 2.64 | Discussion in 1008 | ROWLET::AINSLEY | Less than 150 KTS is TOO slow | Mon Aug 12 1996 10:14 | 191 |
| From: SLOAN::HOM "09-Aug-1996 1550" 9-AUG-1996 14:46:19.27
To: ROWLET::AINSLEY,WLDBIL::KILGORE,MOLAR::DELBALSO
CC:
Subj: DCU Minutes - May 1996 Please post
Attached are the May, 1996. Apologies for the delay.
DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Board of Directors' Meeting
Saturday, May 18, 1996
The meeting, held in conjunction with the Spring Strategic Planning
Conference, in the Captain Lawrence Room of the Ocean Edge Resort and Golf
Club (Brewster, MA), commenced at approximately 8:10 a.m.
GENERAL SESSION
I. Roll Call and Determination of Quorum
Present: David Garrod, Secretary
Christopher Fillmore-Gillett, Vice Chairman
Philip Gransewicz, Chairman
Gim Hom
Paul Kinzelman
Thomas McEachin, Treasurer
Elaine Ritchie
Also Present: Carlo Cestra, President/CEO
Stephanie Duggan, Recording Secretary
Tim Garner, Vice President of Marketing
Tom Gray, Vice President of Lending
Mike Moriarty, Internal Auditor
Jim Regan, Vice President/CFO
Donna Russo, Human Resources Director
Tom Ryan, Vice President of Operations
It was noted that, due to scheduling conflicts, the NCUA Presentation has
been postponed until the June Board Meeting.
II. Review of Minutes
The following changes were requested by the Board:
Page 5: Change the first bullet at the top of the page to read "Employee
Dismissal"
Page 5: Under the EXECUTIVE SESSION paragraph, change the word "insinuated"
to "stated"
* It was moved by Mr. McEachin and seconded by Mr. Gillett to approve the
April 22, 1996 Board Meeting Minutes, as amended. Motion carried unanimously.
Mr. Garrod stateded that only the EXECUTIVE SESSION items will be redacted
when these minutes are released to the membership.
III. Financial Overview
Growth
Assets: Total assets, as of month end decreased by $4 million to $399
million. This is reasonable, since the month ended on Tuesday (one of the
lowest deposit days of the week). Overall, we anticipate achieving a growth
level in the range of 10 to 12 percent for 1996.
Deposits: During the month, deposits decreased by approximately $5 million.
Part of this was the result of a $4 million and $5 million decrease in share
and checking respectively. The growth in money market and certificate
balances was $2.8 million and $1 million respectively.
Loans: Overall, loans to members grew $10.7 million in April to $306
million. This growth was partly related to our mortgage portfolio which grew
$4.4 million. Much of the mortgage portfolio growth was primarily related
to fixed rate mortgages which grew $4.1 million.
Credit cards and vehicle loans increased approximately $5.5 million in total
during the month. Year to date, consumer loans have grown $17.9 million.
This tremendous growth level is a direct result of the attractiveness of our
VISA product and vehicle product that have grown $7.8 million and $8.6
million respectively.
Liquidity
The credit union's liquidity position has continued to remain strong over
the past few months. Management continues to ensure that adequate liquidity
exists to fund the anticipated loan growth.
Capital
The net capital ratio increased this month to 7.86%. This represents an
increase of approximately 23 basis points. This increase is due to the $5
million decrease in assets during the month as well as the strong net income
level. Overall, we remain in a strong capital position.
Asset Quality
The delinquency ratio and charge-off ratio remain low at .39% and .24%
respectively. Overall management continues to actively monitor the status
of our loan portfolio and address delinquent loans through diligent
collection practices.
Investments
During the month, we received approximately $3,697,000 in principal paydowns
on our investment portfolio. This included a $3 million investment that was
called in April. During the month, we invested in short-term certificates
(maximum of 2 weeks) to enhance the yield on the portfolio. As of month
end there was a $7 million (1 day) certificate outstanding. Additionally,
we purchased 1 investment totaling $3 million in April. The breakdown of
the investment is:
Description Term Par Value
FNMA Agency 16 Months $3,000,000
Based on the investment cashflow projected for the remainder of the year
($32 million), we expect to reinvest additional amounts during the
remainder of the year. The exact amounts will be determined by the level of
cash flow required to fund loan growth.
The unrealized loss on Available for Sale investments was $69,600 as of
month end. This represents an decrease of approximately $17,000 compared
with March. Currently, the unrealized loss on the available for sale
portfolio represents less than .5% of the current value.
Profitability
Net income for the month was $613,452. This is $391,550 better than planned
for the month of April. The major reason for this was the higher level
income (interest and other income) earned on loans and investments as a
result of our higher that expected asset growth year to date. Overall, our
annualized gross spread increased from 389 to 398 basis points.
Operating expenses (annualized) decreased 4 basis points to 350 basis
points. This remains higher than projected due to the level of expenses
incurred year to date, that were planned for later in the year. Due to
current timing differences related to operating expenses, this annualized
ratio is not a true reflection of where we will end the year. Additionally,
due to the current adequacy of the balance in the allowance for loan loss,
once again, there was no provision made in April.
Other income remains higher than planned at 85 basis points (vs. 69 basis
points). During April we experienced a gain on loan sales. We anticipate
the level of other income to decline over the next few months to the
budgeted level.
Overall, our net spread increased 20 basis points to 128 basis points. This
is approximately 42 basis points higher than planned. One of the major
reasons for this is our strong asset quality. Because of our low
delinquency and charge-off experience, we have not needed to make a loan
provision in February, March and April, which is a total of $270,000.
IV. Recommendations
* It was moved by Mr. McEachin and seconded by Mr. Hom to ratify the field
of membership approval of Software Pundits and Affiliated Building Services,
Inc., as required by the NCUA under the Streamlined Expansion and Chartering
Procedure (SEP) and Board Policies. Motion carried unanimously.
* It was moved by Mr. Gillett and seconded by Mr. Kinzelman to approve the
Charge Offs, in the amount of $111,865.44 for the month of May, 1996.
Motion carried unanimously.
V. Adjournment
* It was moved by Mr. Gillett and seconded by Ms. Ritchie to adjourn the
meeting and continue with the Spring Strategic Planning Conference at 8:30
a.m. Motion carried unanimously.
____________________________________ ___________________________________
Philip J. Gransewicz David J. Garrod
Chairman Secretary
------------------------------------------------------------------------------
Board of Directors' Telephone Votes
May, 1996
EXECUTIVE SESSION
On May 23, 1996, the board approve a loan to a member. This loan complies
with all DCU underwriting standards, has standard terms, and is available to
all members.
The loan was approved by Mr. Garrod, Mr. Gillett, Mr. Hom, and Mr.
Kinzelman. All other Board Members were unavailable at the time of the vote.
____________________________________ ___________________________________
Philip J. Gransewicz David J. Garrod
Chairman Secretary
|
| 2.65 | Discussion in 1013 | SMURF::STRANGE | Steve Strange, UNIX Filesystems | Mon Sep 09 1996 18:25 | 323 |
| Date: Mon, 9 Sep 1996 17:07:23 -0400
Mime-Version: 1.0
From: sloan::[email protected] (09-Sep-1996 1712)
To: [email protected], [email protected]
Subject: Bod Minutes 7/22/96 Please Post
Content-Type: text/plain; charset=US-ASCII
Content-Transfer-Encoding: 7bit
DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Board of Directors' Meeting
Monday, July 22, 1996
The meeting, held in the second floor Training Room of Digital Employees'
Federal Credit Union's (DCU's) Headquarters facility (141 Parker Street,
Maynard, MA), commenced at approximately 4:05 p.m.
GENERAL SESSION
I. Roll Call and Determination of Quorum
Present: Steven Eddleston
Christopher Fillmore-Gillett
David Garrod
Philip Gransewicz
Gim Hom
Thomas McEachin
Elaine Ritchie
Also Present: Carlo Cestra, President/CEO
Stephanie Duggan, Executive Assistant
Tim Garner, Vice President of Marketing
Tom Gray, Vice President of Lending
Bill Kilgore, Supervisory Committee
Mike Moriarty, Internal Auditor
Jim Regan, Vice President/CFO
Donna Russo, Vice President of Human Resources
Tom Ryan, Vice President/COO
Larry Seiler, Supervisory Committee Secretary
II. Organizational Meeting
* It was moved by Ms. Ritchie and seconded by Mr. Gransewicz to appoint
Christopher C. Fillmore-Gillett as Chairman. Motion carried unanimously.
* It was moved by Mr. Gransewicz and seconded by Mr. Garrod to appoint
Elaine M. Ritchie as Vice Chairman. Motion carried unanimously.
* It was moved by Mr. Garrod and seconded by Mr. Hom to appoint Thomas A.
McEachin as Treasurer. Motion carried unanimously.
* It was moved by Mr. Gransewicz and seconded by Ms. Ritchie to appoint Gim
P. Hom as Secretary. Motion carried unanimously.
Mr. Eddleston was asked to leave the room at this time.
* It was moved by Mr. McEachin and seconded by Ms. Ritchie to indemnify new
board member, Steven R. Eddleston. Motion carried unanimously.
Mr. Eddleston returned to the meeting at this time.
II. Review of Minutes
The following change to the June 26, 1996 Board Meeting Minutes was submitted:
Page 5, B. Finance/Investment Committee, second bullet: the sentence should
read "In compliance with FASB91, certain expenses may be deferred over the
lifetime of some of our mortgage loans. Mr. Regan in analyzing expenses to
determine any further expense deferral."
* It was moved by Mr. Gransewicz and seconded by Mr. McEachin to approve
the June 26, 1996 Board Meeting Minutes as amended (six in favor, one
abstention: Mr. Eddleston). Motion carried.
* It was moved by Mr. McEachin and seconded by Ms. Ritchie to approve the
June Telephone Vote Minutes as submitted (four in favor, three abstentions:
Mr. Gillett, Ms. Ritchie, and Mr. Eddleston.) Motion carried.
III. Auto Leasing
Mr. Gray provided a handout to the board, outlining DCU's planned Leasing
Program:
Advantages of the Program:
Provides a leasing service currently offered by our competition.
Provides a more affordable means for obtaining a new car
Enhances our position as a full-service financial institution
Reduces the potential of members opting for dealer financing
Increases Outstanding Loan Balance
IV. Recommendations
* It was moved by Ms. Ritchie and seconded by Mr. Hom to ratify the field
of membership approval of AOT, Inc. and the Alpharetta, Georgia location of
Affiliated Building Services, Inc., as required by the NCUA under the
Streamlined Expansion and Chartering Procedure (SEP) and Board Policies.
Motion carried unanimously.
* It was moved by Mr. McEachin and seconded by Ms. Ritchie to approve the
addition of the employees of Prudential Relocation, a Prudential Resources
Management Company to our Charter. (This charter amendment was approved by
the NCUA on June 17, 1996.) Motion carried unanimously.
* It was moved by Mr. Gransewicz and seconded by Mr. Eddleston to approve
management's recommendation to increase the Financial Soundness Operating
Expense Goal from 3.4% to 3.5%. (This recommendation was made based on a
mid-year projection assessment of DCU's Financial Soundness Goals. Due to
the unusually high level of growth experienced year-to-date, operating
expenses have been higher than expected. However, the data presented proved
that the increased expense level was necessary in order to maintain our high
level of service to the membership.) Motion carried unanimously.
* It was moved by Mr. Hom and seconded by Ms. Ritchie to approve the Charge
Offs, in the amount of $123,979.11 for the month of July, 1996. Motion
carried unanimously.
V. Committee Reports
a. Finance/Investment Committee
The committee is scheduled to meet again on August 22. No meeting was held
in July and no formal report was submitted.
b. Supervisory Committee
The following report was submitted by Mr. Seiler:
The committee met formally on June 12th and July 15th, 1996. We are
currently experiencing some changes in secretarial support and have not yet
finalized minutes of those meetings. This will be corrected as of our
August 14, 1996 meeting and minutes will be available to the board at that
time. The committee has:
1. Reviewed in detail the audits, findings and corrective actions of the
Internal Auditor for audits conducted since our last report. The only
incomplete actions center around VP, specifically; third-party review of
controls, Disaster Recovery Plan, and audited financial statements. We
expect to close on this audit by our August 14th meeting and bring any
matters of concern to the board at that time.
2. Reviewed the report on member account verifications and are satisfied
that our follow-up procedures revealed only timing issues.
3. Accepted the O'Rourke, Clark & Sacher Management Letter and requested
that copies of it be forwarded to the board.
4. Reviewed, but have yet to evaluate, the NCUA Examination report.
5. Discussed outcome of board planning meeting as it related to
communication issues between board and Supervisory Committee.
6. Established calendar for balance of the year that will provide time to
ensure minutes are ready for the current month board meetings.
7. Scheduled conference reports, Audit Schedule update, and auditor
evaluation input for August meeting.
Signed, Bob Ketz (Supervisory Committee Chairman) 7/22/96
c. Human Resource Committee
No meeting was held in July and no formal report was submitted.
d. Credit Appeals Committee
No meeting was held in July and no formal report was submitted.
e. Committee Appointments
Mr. Gillett thanked Mr. Gransewicz for his two years of leadership as
Chairman of the Board. He also noted that new committee appointments will
be made at the next board meeting. He asked that board members interested
in serving on specific committees should contact him prior to the next meeting.
VI. New Business
a. Paul Kinzelman
* It was moved by Mr. Gransewicz and seconded by Ms. Ritchie to approve
the following resolution, submitted by Mr. Gillett:
WHEREAS Paul Kinzelman has served two terms as a member of the Board of
Directors of Digital Employees' Federal Credit Union, beginning in 1992 and
WHEREAS Mr. Kinzelman has faithfully served the membership of the credit
union as a Director, and previously as Secretary to the Board of Directors, and
WHEREAS Mr. Kinzelman continued to serve the membership of the credit union
even after changing jobs and relocating to California, and
WHEREAS Mr. Kinzelman has spent considerable amounts of personal,
uncompensated time serving as a Director of the credit union, including
traveling from California to Massachusetts to attend important Board
meetings and planning sessions, and
WHEREAS Mr. Kinzelman devoted numerous hours as a "membership rights"
advocate helping to insure that the individual credit union member is always
considered of utmost importance at DCU, and
WHEREAS following four years of continuous service to DCU's membership, Paul
Kinzelman has chosen not to stand for re-election and in so-doing has given
up his seat on the Board of Directors,
BE IT RESOLVED that the Board of Directors, on behalf of the membership of
Digital Employees Federal Credit Union extend to Paul Kinzelman heartfelt
gratitude for his service to the credit union, and extend to him
congratulations for a job well done, and best wishes for continued success
in his career and future endeavors, whatever they may be, and
BE IT FURTHER RESOLVED that the Board of Directors instructs the Secretary
of the Board to publish this Resolution as part of the July, 1996 Meeting
Minutes.
ADOPTED this 22nd Day of July, 1996 by a unanimous vote of the board of
Directors, Digital Employees' Federal Credit Union, Maynard, MA.
Motion carried unanimously.
b. August Meeting Date
The Board reached a consensus to move the August Board Meeting to Thursday,
August 29th, at 4:00 p.m.
VII. Credit Union Overview
June Financial Overview
Growth
Assets: Total assets, as of month end increased by $6 million to $416
million. This is reasonable, since the month ended on Friday (one of the
highest deposit days of the week). Overall, we anticipate achieving a
growth level in the range of 10 to 12 percent for 1996.
Deposits: During the month, deposits increased by approximately $7 million.
The growth was primarily due to a $4 million increase in money market with
the remainder of the growth being in share and checking.
Loans: Overall, loans to members grew $14 million in June to $337 million.
This growth was partly related to our mortgage portfolio which grew $8
million. Much of the mortgage portfolio growth was primarily related to
variable rate mortgages which grew $4.3 million with the remainder of the
growth in home equity.
Credit cards and vehicle loans increased approximately $6.3 million in total
during the month. Year to date, consumer loans have grown $30.7 million.
This tremendous growth level is a direct result of the attractiveness of our
VISA product and vehicle product that have grown $13.4 million and $15.9
million respectively.
Liquidity
The credit union's liquidity position remains tight as a result of our
significant loan growth. Management continues to ensure that adequate
liquidity exists to fund the anticipated loan growth.
Capital
The net capital ratio increased this month to 7.82%. This represents an
increase of approximately 7 basis points. This increase was a direct result
of a lower increase in assets during this month as opposed to the growth of
assets in May. Overall, we remain in a strong capital position.
Asset Quality
The delinquency ratio and charge-off ratio remain low at .40% and .20%
respectively. Overall management continues to actively monitor the status
of our loan portfolio and address delinquent loans through diligent
collection practices.
Investments
During the month, we received approximately $1,010,555 in principal
paydowns on our investment portfolio and we sold two investments during the
month, one for $4,384,549 and the other for $3,000,000. During the month,
we invested in short-term certificates (maximum of 2 weeks) to enhance the
yield on the portfolio.
Based on the investment cashflow projected for the remainder of the year,
we expect to sell more investments during the year to fund additional loan
growth. The exact amounts will be determined by the level of cash flow
required to fund this growth.
The unrealized loss on Available for Sale investments was $93,767 as of
month end. This represents an increase of approximately $25,000 compared
with May.
Profitability
Net income for the month was $804,618. This is $561,737 better than planned
for the month of June. The major reason for this was the higher level of
income earned on investments as well as loans. Overall, our annualized
gross spread increased from 405 to 419 basis points.
Operating expenses (annualized) decreased 6 basis points to 351 basis
points. This remains higher than projected due to the level of expenses
incurred year to date that were planned for later in the year.
Additionally, due to the current adequacy of the balance in the allowance
for loan loss there was no provision made in June.
Other income declined to 82 basis points during the month of June. Although
this is still higher than budget (69 basis points) we anticipate the level
of other income to continue to decline over the next few months to the
budgeted level.
Overall, our net spread increased 20 basis points to 145 basis points. This
is approximately 59 basis points higher than planned. One of the major
reasons for this is our strong asset quality. Because of our low
delinquency and charge-off experience, we have not needed to make a loan
provision in February, March ,April , May and June which is a total of $450,000.
Additional Information
Management provided additional updates to the board regarding the
Scholarship Program and preliminary Member Survey results. The scholarship
winners will be announced shortly and the member survey results will be
reviewed at the August meeting.
VIII. Adjournment
* It was moved by Mr. Hom and seconded by Ms. Ritchie to adjourn the
meeting at 5:30 p.m. Motion carried unanimously.
____________________________________ ____________________________________
Christopher C. Fillmore-Gillett Gim P. Hom
Chairman Secretary
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| 2.66 | discussion in 1019 | CPEEDY::BRADLEY | Chuck Bradley | Tue Oct 22 1996 12:53 | 316 |
| 2.67 | 10/3/96 - Discussion in 1024 | QUARK::LIONEL | Free advice is worth every cent | Tue Nov 05 1996 14:11 | 231 |
| 2.68 | 28Oct96. discussion in 1028 | CPEEDY::BRADLEY | Chuck Bradley | Tue Dec 10 1996 10:13 | 261 |
| 2.69 | 14Nov96. discussion in 1029 | CPEEDY::BRADLEY | Chuck Bradley | Tue Dec 10 1996 10:23 | 62 |
| 2.70 | 25-Nov-1996, discussion in 1031 | QUARK::LIONEL | Free advice is worth every cent | Fri Jan 10 1997 13:39 | 377 |
| 2.71 | 16-Dec-1996, discussion in 1033 | CPEEDY::BRADLEY | Chuck Bradley | Thu Jan 30 1997 11:34 | 236 |
| -< 16-Dec-1996, discussion in 1033 >-
DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Board of Directors' Meeting
Monday, December 16, 1996
The meeting, held in the second floor Training Room of Digital Employees'
Federal Credit Union's (DCU's) Headquarters facility (141 Parker Street,
Maynard, MA), commenced at approximately 3:30 p.m.
GENERAL SESSION
I. Roll Call and Determination of Quorum
Present: Steven Eddleston
Christopher Fillmore-Gillett, Chairman
David Garrod
Philip Gransewicz
Gim Hom, Secretary
Thomas McEachin, Treasurer (4:00 p.m.)
Elaine Ritchie, Vice Chairman
Also Present: Carlo Cestra, President/CEO
Stephanie Duggan, Executive Assistant
Jim Regan, Senior Vice President/CFO
Donna Russo, Vice President of Human Resources
Tom Ryan, Senior Vice President/COO
II. Review of Minutes
* It was moved by Ms. Ritchie and seconded by Mr. Hom to approve the
November 25, 1996 Board Meeting Minutes as written. Motion carried unanimously.
In addition to the noted redactions, it was requested that the first
paragraph of number IX on page 8 be redacted as well.
III. Monthly Consent Agenda
* It was moved by Mr. Hom and seconded by Mr. Eddleston to approve the
items of the December, 1996 Consent Agenda:
Declaration of dividends in the total amount of $2,437,025.00 for the
fourth quarter of 1996, and the ratification of dividend rates as of
December 9, 1996.
Charge Offs: Total amount of $175,088.08 for the month of December, 1996.
Motion carried unanimously.
IV. Standing Committee Reports
a. Finance and Investment Committee
No meeting held.
b. Human Resources Committee
This item will be discussed under the Policy and Planning portion of today's
meeting.
c. Credit Appeals Committee
No meeting held.
d. Supervisory Committee
Meeting held Wednesday, December 11th.
V. Ad Hoc Committee Reports
None.
VI. CEO Report
a. November, 1996 Financial Overview
Growth
Assets: Total assets increased $10 million to $446 million during the
month. Year-to-date, assets have grown $66 million, which represents an
increase of approximately 17% (18.9% annualized). This is slightly less
than our deposit growth due to the maturity of a reverse repurchase
agreement in July, which resulted in an asset decline. Overall, we
anticipate achieving a growth level in the range of 15 to 17 percent for 1996.
Deposits: Total deposits increased by approximately $8 million to $407
million. Year-to-date, deposits have grown $66 million. This represents an
increase of approximately 19% (21% annualized). During the month, the
increase was primarily due to certificate and money market accounts growing
by a combined $9 million.
Loans: Outstanding loans increased over $6 million to $376 million during
the month. Year-to-date, loans have grown $100 million, which represents an
increase of approximately 36% (40% annualized). During the month, our
consumer loan products increased by approximately $3.9 million and our
mortgage portfolio increased by approximately $2.5 million.
Year to date, consumer loans have grown $58.1 million. This tremendous
growth level is a direct result of the attractiveness of our VISA product
and vehicle product that have grown $20.9 million and $35.7 million
respectively.
Liquidity
During the year we have continuously managed our liquidity position to
ensure adequate resources to support loan funding. Deposit growth, as well
as cashflows from our investment portfolio have been more than adequate to
support the tremendous level of loan growth ($100 million year-to-date) we
have achieved. Deposit growth continues to provide the major source of
funding for loan growth, with reductions in the investment portfolio and
sales of mortgage loans providing additional resource when necessary.
Presently, we believe the credit union's liquidity position in more than
adequate to support the level of growth projected.
Capital
Primarily due to the increase in assets, the net capital ratio decreased 5
basis points to 7.87%. Overall, we remain in a strong capital position.
Asset Quality
The delinquency ratio and charge-off ratio remain low at .44% and .34%
respectively. We will continue to actively monitor the status of our loan
portfolio and address delinquent loans through diligent collection practices.
Investments
During the month, we received approximately $549,382 in principal paydowns.
There was one investment that matured during the month for approximately
$2.8 million. The unrealized loss on Available for Sale investments was
$67,954 as of month end. This represents an increase of approximately
$9,538 from last month-end.
Profitability
Net income was $529,136 ($234,166 over budget) for the month. Our
annualized gross spread decreased from 415 to 413 basis points.
Operating expenses (annualized) decreased to 3.37%. We will continue to
closely monitor the level of operating expenses in all areas.
Other income decreased during the month to 79 basis points. We anticipate
the level of other income to remain higher than projected for 1996
Investment income was higher in November due to a dividend check received
from NCUA for approximately $132,000 and an additional $49,000 received on
our overnight investments.
Overall, our net spread remained the same at 1.43%. This is approximately
57 basis points higher than planned. One of the major reasons for this is
our strong asset quality and asset mix. Because of our low delinquency and
charge-off experience, we were able to reduce the level of loan loss
provisions by $540,000.
b. Bonus Dividend Information
During extensive discussion, a unanimous consensus was reached to approve a
bonus dividend, provided the amount is appropriate.
* It was moved by Mr. Gransewicz and seconded by Mr. Garrod to approve a
bonus dividend, to be paid half to depositors and half to borrowers, in the
total amount of $1,000,000 (four in favor, three opposed: Mr. Hom, Mr.
McEachin, and Mr. Eddleston). Motion carried.
VII. Policy and Strategic Planning Discussions
a. CEO Contract Presentation and Evaluation
Only the Board remained in the room at this time.
EXECUTIVE SESSION
The CEO contract was discussed.
GENERAL SESSION
* It was moved by Mr. McEachin and seconded by Mr. Gransewicz to ratify the
proposed CEO contract, including the following items:
Ratify a five-year contract with the CEO
Implement 457(f) Deferred Compensation Plan for the CEO
Motion carried unanimously.
b. CEO Bonus Discussion
EXECUTIVE SESSION
The CEO's opportunity for Bonus was discussed.
GENERAL SESSION
* It was moved by Mr. Garrod and seconded by Mr. McEachin to approve:
A CEO Performance Bonus XXXXXXXXX.
A CEO Success Sharing Bonus in January
Motion carried unanimously.
The Board discussed the Employee Success Sharing Plan at this time.
VIII. Adjournment
* It was moved by Mr. Eddleston and seconded by Ms. Ritchie to adjourn the
meeting at
5:10 p.m. Motion carried unanimously.
Christopher C. Fillmore-Gillett Gim P. Hom
Chairman Secretary
_____________________________________________________________________________
Board of Directors' Telephone Votes
EXECUTIVE SESSION
On December 11 & 12, 1996, the board approved a loan to a member.
The loan was approved subject to normal DCU underwriting standards, have
standard terms, and are available to all members.
The loan was approved by Mr. Hom, Ms Ritchie, Mr. Gillett, Mr. McEachin, Mr.
Garrod, and Mr. Gransewicz. All other directors were unavailable at the
time of the vote.
Recommendation approved.
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| 2.72 | 27-Jan-1997 Discussion in 1038 | CPEEDY::BRADLEY | Chuck Bradley | Thu Feb 27 1997 11:39 | 310 |
| From: SUBSYS::HOM "Gim Hom, 237.5813, SHR3-2/S31 27-Feb-1997 1122" 27-FEB-1997 11:23:35.79
To: @DIS:DCU-MOD
CC:
Subj: January Minutes
DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
Board of Directors' Meeting
Monday, January 27, 1997
The meeting, held in the second floor Training Room of Digital Employees'
Federal Credit Union's (DCU's) Headquarters facility (141 Parker Street,
Maynard, MA), commenced at 4:00 p.m.
GENERAL SESSION
I. Roll Call and Determination of Quorum
Present: Steven Eddleston
Christopher Fillmore-Gillett, Chairman
David Garrod
Philip Gransewicz
Gim Hom, Secretary
Thomas McEachin, Treasurer (via conference call)
Elaine Ritchie, Vice Chairman
Also Present: Carlo Cestra, President/CEO
Stephanie Duggan, Executive Assistant
Corinne Hust, Internal Auditor
Bob Ketz, Supervisory Committee Chairman
Bill Kilgore, Supervisory Committee Member
Jim Regan, Senior Vice President/CFO
Donna Russo, Vice President of Human Resources
Tom Ryan, Senior Vice President/COO
Larry Seiler, Supervisory Committee Secretary
II. Review of Minutes
* It was moved by Mr. Hom and seconded by Mr. Gransewicz to approve the
December 16, 1996 Board Meeting Minutes as written. Motion carried unanimously.
One redaction was noted.
* It was moved by Ms. Ritchie and seconded by Mr. Garrod to approve the
December Telephone Vote Minutes as written. Motion carried unanimously.
III. Monthly Consent Agenda
The Board requested that items #2  of the Consent Agenda be removed and
discussed as separate items under Management Recommendations.
* It was moved by Mr. Hom and seconded by Mr. Gransewicz to approve items
#1 & #4 of the Consent Agenda:
EasCorp Annual Meeting and Elections - to appoint Jim Regan as DCU's
representative to EasCorp.
Charge Offs - in the amount of $170,578.51 for the month of January, 1997.
Motion carried unanimously.
IV. Management Recommendations
a. Mortgage Signature Authority
It was explained that this recommendation was made as a back-up provision in
the event that certain authorized employees are unavailable to perform the
duties outlined below.
* It was moved by Mr. McEachin and seconded by Mr. Hom to amend those
authorized to discharge, assign, subordinate, extend, foreclose by entry,
convey by foreclosure deed, quitclaim deed, or partial release in the name
of Digital Employees' Federal Credit Union, any mortgage now held or which
may hereafter be held by the said Digital Employees' Federal Credit Union to
the following positions:
President/CEO Mortgage Operations Manager
Senior Vice President/CFO Real Estate Servicing Manager
Senior Vice President/COO Collections Manager
Vice President of Lending
Six in favor, one opposed (Mr. Garrod) - Motion carried.
b. Loan Policy Amendment
* It was moved by Mr. Ritchie and seconded by Mr. Eddleston to amend DCU's
Loan Policy to permit a loan amount of up to $250,000 on home equity loans
or lines with a loan-to-value of up to 100%. Motion carried unanimously.
V. Committee Reports
a. Finance and Investment Committee
Meeting scheduled for February 13, 1997.
b. Human Resources Committee
Met prior to board meeting - report to be included in next month's package
Mr. Gillett distributed copies of the CEO Evaluation Package which will be
completed by all directors. He explained that this is merely a mock
evaluation to test the model as well as gather director feedback on the
process. The model will be officially utilized in June and December for the
1997 CEO Evaluation.
c. Credit Appeals Committee
Report included in package.
d. Supervisory Committee
Minutes of last meeting included in package. These minutes will not be
published to the membership until the committee has the opportunity to
review additional redaction requests made by the board.
VI. CEO Report
a. December, 1996 Financial Overview
Growth
Assets: Total assets increased $10 million to $456 million during the
month. Year-to-date, assets have grown $76 million, which represents an
increase of approximately 20%. This is slightly less than our deposit
growth due to the maturity of a $6 million reverse repurchase agreement in
July.
Deposits: Total deposits increased by approximately $11 million to $419
million. Year-to-date, deposits have grown $77 million. This represents an
increase of approximately 23%. During the month, the increase was
primarily due to certificate and money market accounts growing by a combined
$14 million.
Loans: Outstanding loans increased over $5 million to $382 million during
the month. Year-to-date, loans have grown $106 million, which represents an
increase of approximately 38%. During the month, our consumer loan
products increased by approximately $5.7 million.
Year to date, consumer loans have grown $63.8 million. This tremendous
growth level is a direct result of the attractiveness of our VISA product
and vehicle product that have grown $25.5 million and $36.7 million
respectively.
Liquidity
During the year we have continuously managed our liquidity position to
ensure adequate resources to support loan funding. Deposit growth, as well
as cashflows from our investment portfolio have been more than adequate to
support the tremendous level of loan growth ($106 million year-to-date) we
have achieved. Deposit growth provided the major source of funding for
loan growth in 1996, with reductions in the investment portfolio and sales
of mortgage loans providing additional resource when necessary.
Capital
Due to the increase in assets in 1996 ($75.9 million), as well as the bonus
dividend, the net capital ratio decreased 35 basis points to 7.44%.
Overall, we remain in a strong capital position and within the established
financial soundness range.
Asset Quality
The delinquency ratio and charge-off ratio remain low at .38% and .35%
respectively. In the coming year we will continue to actively monitor the
status of our loan portfolio and address delinquent loans through diligent
collection practices.
Investments
During the month, we received approximately $530,436 in principal paydowns.
The unrealized loss on Available for Sale investments was $67,130 as of
month end. This represents an decrease of approximately $824 from last
month-end.
Profitability
Due to successful year we had we were able to return to the members
$1,000,000, in the form of a bonus dividend. In December we booked an
accrual for the bonus dividend, as well as one for employee Success Sharing.
This left us with a $1,055,595 net loss for the month. Net income for the
month was approximately $500,000 before these two accruals.
Year to date net income was $4,232,926, which represents a 1.03% return on
assets. This is approximately 17 basis points better than projected. Based
on the growth of the credit union, this excess amount was necessary to
maintain our financial soundness. Our annualized gross spread decreased 26
basis points this month. The majority of this decline (22 basis points) was
the direct result of the bonus dividend.
Operating expenses (annualized) increased to 3.49%. This is within the
financial soundness goal of 3.50% established for 1996.
Other income decreased during the month to 78 basis points. The level of
other income still remains higher than projected for 1996 by 9 basis
points.
Because of our low delinquency and charge-off experience, we were able to
reduce the level of loan loss provisions by $540,000. The net spread would
had declined approximately 12 basis points had the additional loan loss
provision been necessary.
VII. Policy & Strategic Planning Discussions
EXECUTIVE SESSION
a. Discussion with Supervisory Committee Chairman
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(Mr. McEachin ended his conference call at this time)
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b. Ad-Hoc Committee - Board Expense Reimbursement Policy Review
Mr. Gillett formed the following ad-hoc committee:
Committee: Board of Directors Expense Reimbursement Policy Review
Charter: Review the Personnel Policies regarding reimbursable expenses,
director/volunteer travel & conference attendance, etc. Provide the board
with policy options in the area of Board Process regarding these matters,
with an eye toward clarifying any ambiguous areas, and making employees
traveling with directors eligible for reimbursement/coverage, etc.
Members: David Garrod and Gim Hom
Report Date: February, 1997 Board of Directors' Meeting
Expiration of Charter: April 1, 1997
GENERAL SESSION
VIII. Monthly Board Presentation
a. Management Presentation - 1996 Review & 1997 Business Plan
Mr. Cestra indicated, though he is proud to see the tremendous results DCU
achieved in 1996, the credit union's focus is now on the 1997 goals and
objectives. Mr. Cestra and the management team proceeded to address
questions/concerns with the 1997 Business Plan at this time.
IX. New Business
EXECUTIVE SESSION
a. Volunteer Loan
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* It was moved by Ms. Ritchie and seconded by Mr. Gransewicz to approve a
loan to a volunteer. This loan, meets standard underwriting criteria, and
is available to all members. Motion carried unanimously.
GENERAL SESSION
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IX. Meeting Wrap-up and Board Performance Review
Ms. Ritchie acted as this month's moderator.
X. Adjournment
* It was moved by Mr. Hom and seconded by Mr. Eddleston to adjourn the
meeting at 6:30 p.m. Motion carried unanimously.
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