Page 3 - Annual Report

Alabama’s best Credit Union
s we begin 2024, uncertainty still prevails in the financial by the expiration of the lease on the old and largely outdated marketplace, primarily as it relates to the future building. We now own the land on which our headquarters are built direction of the Federal Reserve. At the end of 2023, it so members can count on this being ACU’s permanent home.
was widely believed the Fed would cut rates as many as
four times in 2024. Since then, the situation has become more muddled with some forecasting higher and others forecasting lower rates. As always, we will monitor and react appropriately to
the current conditions. This confusion has led at least temporarily to higher mortgage rates and resulted in a significant selloff in the bond market.
The extended period of very low market interest rates followed by unprecedented increases by the Fed beginning in the spring of 2022 has impacted the income of most financial institutions, as their cost of deposits and any borrowings have grown exponentially. For the first time in at least a decade, there has been significant competition for deposits as consumers have been forced to draw down savings balances to compensate for inflation. This made managing a credit union’s financials in 2023 very challenging. That said, it was nice to see the market reward our depositors, with many taking CD’s with yields of over 5%. For the last several years, borrowers were the primary beneficiary of market forces.
Alabama Credit Union closed 2023 in strong financial position with Net Worth of over 9.5% (note: a credit union is considered to be
well capitalized at 7% or over). Net income was impacted by the aforementioned deposit cost, but still exceeded $5.4 million. Growth numbers were impressive, with deposits, loans and assets increasing over 11% respectively. Membership growth of 15% was especially noteworthy as more consumers chose Alabama Credit Union over alternatives.
During the year, ACU took steps to improve member convenience with new technology, and with the addition of two new branches – one on Greenbrier Road in Madison, and a second inside the Airbus assembly facility in Mobile. Our new main office construction continued, with completion expected in spring, 2024. This new facility will provide ACU members with a state-of-the-art financial experience. We remind you that this new facility was made necessary
Late in the year we prepared for the merger of Tuscaloosa County Credit Union, which occurred flawlessly on March 1. More certified financial counselors have been deployed so that members have access to a trained expert to help them make key financial decisions, improve their credit scores, and to help them build a strong financial future. To speed up the lending process, technology was deployed
to help make loan applications in a more timely manner. Also, for
the benefit of members, additional features to reduce the cost of our Courtesy Pay program were implemented. We also introduced a number of measures to combat the rampant fraud that is occurring across the marketplace, saving members and ACU millions of dollars in losses, and immeasurable time and anxiety.
Internally, we devoted considerable time to succession planning and organizational redesign as we seek to assure members ACU is prepared to serve them long into the future. The Board of Directors made a significant strategic decision in appointing Chief Operating Officer June Landrum as Interim President, placing her in a position to succeed CEO Steve Swofford upon his retirement in 2025.
In short, 2023 was a challenging but rewarding year in that it prepared us better to face whatever opportunities or obstacles that 2024 presents. As we advance through the year, members can be assured that we will always be working toward our stated objective of being “Alabama’s Best Credit Union”, not by our standards, but by yours.
Best wishes for a great 2024!
Stephen K. Swofford
President & CEO
Ron Dulek
Chairman