2015-11-16T17:22:55-06:00 2014-12-31 910189318 MOSS ADAMS LLP 2707 COLBY AVENUE SUITE 801 EVERETT WA 98201 990 2014-01-01 910219005 VERITY CREDIT UNION VERI 8004444589 11027 MERIDIAN AVENUE NORTH SEATTLE WA 98133 GREG BRUNS VP/CFO 8004444589 2015-11-16 1 KRISTINE HOEFLIN P00786821 4252597227 2014 2016-03-07 17:11:31Z JOHN ZMOLEK 11027 MERIDIAN AVENUE NORTH SEATTLE WA 98133 32286652 0 X WWW.VERITYCU.COM X CREDIT UNION 1933 WA A COOPERATION ORGANIZED FOR THE PURPOSE OF PROMOTING THRIFT AND SAVINGS AMONG ITS MEMBERS. 9 9 139 15 291763 -129086 0 0 22126245 21112898 1850178 1682141 3559426 151517 27535849 22946556 16250 0 0 0 9888661 7284501 0 0 0 12295683 12571001 22200594 19855502 5335255 3091054 427238627 444186282 390598762 403214185 36639865 40972097 X A COOPERATIVE, ORGANIZED FOR THE PURPOSE OF PROMOTING THRIFT AND SAVINGS AMONG ITS MEMBERS, CREATING A SOURCE OF CREDIT FOR THEM AT RATES OF INTEREST SET BY THE BOARD OF DIRECTORS, AND PROVIDING AN OPPORTUNITY FOR THEM TO USE AND CONTROL THEIR OWN MONEY ON A DEMOCRATIC BASIS IN ORDER TO IMPROVE THEIR ECONOMIC AND SOCIAL CONDITIONS. AS A COOPERATIVE, VERITY CREDIT UNION CONDUCTS ITS BUSINESS FOR THE MUTUAL BENEFIT AND GENERAL WELFARE OF ITS MEMBERS WITH THE EARNINGS, SAVINGS, BENEFITS, OR SERVICES OF THE CREDIT UNION BEING DISTRIBUTED TO ITS MEMBERS AS PATRONS. 0 0 VERITY CREDIT UNION IS A WASHINGTON STATE CHARTERED CREDIT UNION THAT SERVES 27,709 MEMBER OWNERS. VERITY'S PRIMARY FIELD OF MEMBERSHIP INCLUDES ALL INDIVIDUALS THAT RESIDE, WORK, WORSHIP, OR ATTEND SCHOOL IN ANY WASHINGTON STATE SCHOOL DISTRICT. VERITY OFFERS A FULL RANGE OF DEPOSIT, LOAN, AND INVESTMENT PRODUCTS AND SERVICES THROUGH SIX FULL BRANCHES, A CALL CENTER, AND ONLINE ACCOUNT SERVICES. VERITY CREDIT UNION OFFERS A FULL-SERVICE INVESTMENT PROGRAM WITH TWO REGISTERED INVESTMENT REPRESENTATIVES AND A LICENSED SUPPORT REPRESENTATIVE. AS OF DECEMBER 31, 2014, VERITY'S INVESTMENT SERVICES PROGRAM HAD 898 MEMBERS WHO HAVE 1,489 ACCOUNTS, AND $90,483,876 IN ASSETS UNDER MANAGEMENT. VERITY CREDIT UNION OFFERS FREE FINANCIAL COUNSELING TO ITS MEMBERS. SPECIFIC SERVICES INCLUDE FINANCIAL PLANNING, DEBT MODIFICATION ON LOANS FROM VERITY AND OTHER CREDITORS, AND DIRECT ASSISTANCE IN UTILIZING THE GOVERNMENT SPONSORED MORTGAGE RELIEF PROGRAMS. 0 0 0 0 0 0 0 0 0 1 0 0 0 1 1 0 1 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 1 1 0 0 1 12151 0 1 139 1 1 1 0 0 0 0 0 X 9 9 0 0 0 0 1 1 1 1 1 0 0 0 1 1 1 1 1 1 1 0 X GREG BRUNS 8004444589 11027 MERIDIAN AVENUE NORTH SEATTLE WA 98133 DAN STRANDY CHAIR 5.00 X X 0 0 0 ERIN HAAS VICE CHAIR 5.00 X X 0 0 0 STEVE ANDERSEN TREASURER, SUPERVISORY COMMITTEE 5.00 X X 0 0 0 KAREN HUNT SECRETARY 5.00 X X 0 0 0 RODOLFO HURTADO DIRECTOR 5.00 X 0 0 0 ANTHONY KUSSKE DIRECTOR 5.00 X 0 0 0 BENJAMIN LUNDELL DIRECTOR 5.00 X 0 0 0 MARY SEVILLA DIRECTOR 5.00 X 0 0 0 DAN YOUNG DIRECTOR 5.00 X 0 0 0 E LAIRD HANSEN DIRECTOR (1/14 - 4/14) 5.00 X 0 0 0 JOHN ZMOLEK CEO 40.00 X 241841 0 15642 GREG BRUNS CFO 38.00 2.00 X 148514 0 9008 SHERRY STECKLY-DUFFY COO 40.00 X 182716 0 10155 SARAH SLONSKY CLO 10.00 30.00 X 117704 0 12438 JUSTIN MARTIN CHIEF HR & MARKETING OFFICER 40.00 X 133954 0 8800 824729 0 56043 5 0 1 0 FISERV INC PO BOX 99924 GRAPEVINE TX 76099 CORE OPERATING SYSTEM 520773 KAYE-SMITH PO BOX 956 RENTON WA 98057 MAILING SERVICES 213639 DIEBOLD INCORPORATED PO BOX 643543 PITTSBURGH PA 15264 ATM SERVICES 206681 MEYER BROTHERS ROOFING INC 18211 E VALLEY HWY KENT WA 98032 ROOFING SERVICES 161513 LEVEL 3 COMMUNICATIONS 10475 PARK MEADOWS DR LITTLETON CO 80124 DATA CENTER SERVICES 157330 15 INTEREST ON LOANS 522100 15471223 15471223 OTHER 522100 3023556 2829950 193606 FEE INCOME 522100 2618119 2618119 21112898 1522873 1522873 340712 24100 316612 316612 42512 274100 9377299 97965 9315996 0 61303 97965 159268 159268 SUBSIDIARY INCOME 522100 -165095 21063 55645 -241803 -165095 22946556 20940355 291763 1714438 X 607876 5288887 250119 568129 569490 10285 78956 2639558 1193946 888665 952662 563976 78830 182605 1624824 796499 102277 PROVISION FOR LOAN LOSS 1347197 LOAN SERVICING 1191390 OTHER LOSSES 317629 MEMBER EXPENSE 266211 335491 19855502 1742920 5089318 16240829 8753572 0 1016007 491337 0 0 318717921 677761 753831 21256621 12157273 8773075 9099348 87525366 81575222 3865201 300632828 2264300 11154511 13051562 427238627 444186282 6165650 4899261 0 25937700 384433112 372377224 390598762 403214185 X 0 0 0 0 36639865 40972097 36639865 40972097 427238627 444186282 X 3091054 1858155 -616977 X 0 1 X 1 0 1620348 1620348 7558182 3145720 4412462 3681876 2195396 1486480 8229296 6816157 1413139 166919 166919 9099348 MEMBER SHARE AND DEPOSITS 372377224 372377224 X PART X, LINE 2: THE CREDIT UNION IS EXEMPT FROM FEDERAL AND STATE INCOME TAXES, EXCEPT FOR TAXES ON UNRELATED BUSINESS INCOME AS FURTHER DISCUSSED IN NOTE 11. THE CREDIT UNION'S SUBSIDIARY IS A LIMITED LIABILITY COMPANY AND, THEREFORE, IS ALSO EXEMPT BY STATUTE FROM FEDERAL AND STATE INCOME TAXES, AND ITS EARNINGS AND LOSSES ARE PASSED THROUGH TO THE MEMBERS. THE CREDIT UNION IS A STATE-CHARTERED CREDIT UNION AS DESCRIBED IN INTERNAL REVENUE CODE (IRC) SECTION 501(C)(14) AND, AS SUCH, IS EXEMPT FROM FEDERAL TAXATION OF INCOME DERIVED FROM THE PERFORMANCE OF ACTIVITIES THAT ARE IN FURTHERANCE OF ITS EXEMPT PURPOSES. HOWEVER, IRC SECTION 511 IMPOSES A TAX ON THE UNRELATED BUSINESS INCOME (AS DEFINED IN SECTION 512) DERIVED BY STATE-CHARTERED CREDIT UNIONS. MANY STATES HAVE SIMILAR LAWS. THE SPECIFIC APPLICATION OF SECTION 512 TO THE VARIOUS ACTIVITIES CONDUCTED BY STATE-CHARTERED CREDIT UNIONS HAS BEEN AT ISSUE FOR MANY YEARS. DURING 2007, THE IRS ISSUED A SERIES OF TECHNICAL ADVICE MEMORANDA (TAMS) TO A NUMBER OF STATE-CHARTERED CREDIT UNIONS LOCATED THROUGHOUT THE COUNTRY. IN LIGHT OF THE TAMS, THE CREDIT UNION HAS ASSESSED ITS ACTIVITIES AND ANY POTENTIAL FEDERAL OR STATE INCOME TAX LIABILITY. IN THE OPINION OF MANAGEMENT, ANY LIABILITY ARISING FROM FEDERAL OR STATE TAXATION OF ACTIVITIES DEEMED TO BE UNRELATED TO ITS EXEMPT PURPOSES IS NOT EXPECTED TO HAVE A MATERIAL EFFECT ON THE CREDIT UNION'S FINANCIAL POSITION OR RESULTS OF OPERATIONS. FASB ASC 740-10-65, INCOME TAXES, PROVIDES GUIDANCE FOR HOW UNCERTAIN TAX POSITIONS SHOULD BE RECOGNIZED, MEASURED, DISCLOSED, AND PRESENTED IN THE CONSOLIDATED FINANCIAL STATEMENTS. THIS REQUIRES THE EVALUATION OF TAX POSITIONS TAKEN OR EXPECTED TO BE TAKEN IN THE COURSE OF PREPARING THE CREDIT UNION'S TAX RETURNS TO DETERMINE WHETHER THE TAX POSITIONS ARE "MORE LIKELY THAN NOT" TO BE SUSTAINED "WHEN CHALLENGED" OR "WHEN EXAMINED" BY THE APPLICABLE TAX AUTHORITY. TAX POSITIONS DEEMED TO NOT MEET THE MORE-LIKELY-THAN-NOT THRESHOLD WOULD BE RECORDED AS A TAX EXPENSE AND LIABILITY IN THE CURRENT YEAR. THE CREDIT UNION ADOPTED THE PROVISIONS OUTLINED IN THIS GUIDANCE ON JANUARY 1, 2009. THE CREDIT UNION HAD NO UNRECOGNIZED TAX POSITIONS THAT REQUIRED ADJUSTMENT TO THE JANUARY 1, 2009, BEGINNING BALANCE OF UNDIVIDED EARNINGS. FOR THE YEAR ENDED DECEMBER 31, 2014, MANAGEMENT HAS DETERMINED THAT THERE ARE NO MATERIAL UNCERTAIN TAX POSITIONS. THE CREDIT UNION IS GENERALLY NOT SUBJECT TO EXAMINATION FOR TAX YEARS BEFORE 2011. X X 1 1 X X 0 0 0 JOHN ZMOLEK CEO 215574 0 5782 0 20485 0 7175 0 8467 0 257483 0 0 0 GREG BRUNS CFO 127877 0 20637 0 0 0 4486 0 4522 0 157522 0 0 0 SHERRY STECKLY-DUFFY COO 156201 0 26515 0 0 0 5633 0 4522 0 192871 0 0 0 PART I, LINE 1A TRAVEL FOR COMPANIONS AND HEALTH CLUB DUES ARE PAID AS PART OF CEO'S COMPENSATION PLAN AND ARE INCLUDED AS TAXABLE COMPENSATION. FORM 990, PART VI, SECTION A, LINE 6 THE CREDIT UNION'S MEMBERS HAVE RIGHTS TO ELECT MEMBERS OF THE GOVERNING BODY. THE CREDIT UNION'S MEMBERS ALSO RECEIVE A SHARE OF THE ORGANIZATION'S PROFITS IN THE FORM OF CASH DIVIDENDS. FORM 990, PART VI, SECTION A, LINE 7A THE GOVERNING BOARD OF VERITY CREDIT UNION IS COMPRISED OF VOLUNTEER MEMBERS WHO ARE DIRECTLY ELECTED BY ITS MEMBERS. EACH MEMBER OF THE GOVERNING BOARD SERVES FOR A PERIOD AS PRESCRIBED IN OUR BY-LAWS. FORM 990, PART VI, SECTION A, LINE 7B AT THE END OF EACH TERM OF THE BOARD MEMBERS, ELECTIONS ARE HELD AND BOARD MEMBERS ARE VOTED BY THE MEMBERS OF THE CREDIT UNION PURSUANT TO OUR BY-LAWS. MEMBER VOTES ARE ALSO REQUIRED TO RATIFY DECISIONS DEALING WITH REORGANIZATIONS AS IN THE CASE OF MERGER OR DISSOLUTION. FORM 990, PART VI, SECTION B, LINE 11 THE FINANCE COMMITTEE REVIEWS FORM 990 PRIOR TO SUBMISSION TO THE IRS. FORM 990, PART VI, SECTION B, LINE 12C ALL BOARD AND COMMITTEE MEMBERS WILL REVIEW AND SIGN THE STATEMENT OF RECEIPT & UNDERSTANDING BEFORE CONSIDERATION FOR OFFICE. ANNUALLY THEY WILL SIGN THE STATEMENT OF RECEIPTS & UNDERSTANDING AT THE MAY BOARD MEETING. CREDIT UNION BOARD AND COMMITTEE MEMBERS MUST IMMEDIATELY DISCLOSE THE EXISTENCE OF ANY KNOWN CONFLICT OF INTEREST EITHER WITH THE CREDIT UNION OR ITS MEMBERS. THEY MUST THEN RECUSE THEMSELVES FROM CONSIDERATION OF ANY CONTRACT, TRANSACTION OR RELATIONSHIP IN WHICH THEY OR THEIR FAMILY MEMBERS HAVE AN INTEREST. COMPLAINTS RELATING TO ALLEGED VIOLATIONS ARE TO BE PUT IN WRITING AND SUBMITTED TO ANY OFFICER, BOARD OR SUPERVISORY COMMITTEE MEMBER. COMPLAINTS WILL THEN BE FORWARD TO THE HIGHEST RANKING INDIVIDUAL ON THE BOARD OR SUPERVISORY COMMITTEE WHO WAS NOT NAMED IN THE COMPLAINT TO BE RESOLVED. FORM 990, PART VI, SECTION B, LINE 15 THE CEO'S COMPENSATION IS SET BY THE BOARD OF DIRECTORS. SENIOR MANAGEMENT'S COMPENSATION IS DETERMINED BY THE CEO, WHO REVIEWS SALARY SURVEY DATA ANNUALLY USING TWO DATA SETS FOR ALL SENIOR MANAGEMENT POSITIONS. THESE DATA SETS ARE THE ENTIRE CREDIT UNION INDUSTRY AND THE PUGET SOUND FINANCIAL INDUSTRY. FOR ALL REMAINING MANAGERS AND STAFF, EACH POSITION IS SLOTTED INTO 1 OF 6 SALARY RANGES. THE SALARY RANGES ARE REVIEWED ANNUALLY BY THE HUMAN RESOURCES DEPARTMENT TO ENSURE THAT THE JOB TITLE IS IN THE CORRECT RANGE. THE SALARY RANGES ARE ADJUSTED EVERY 2-3 YEARS FOR INFLATION. FORM 990, PART VI, SECTION C, LINE 19 FINANCIAL STATEMENTS ARE POSTED IN ALL BRANCHES, AND ON THE WEBSITE. GOVERNING DOCUMENTS AND CONFLICT OF INTEREST POLICIES ARE MADE AVAILABLE UPON REQUEST. FORM 990, PART IX, LINE 11G CONSULTING 515,184. PURCHASED SERVICES 2,124,374. FORM 990, PART XI, LINE 9: REMOVE NON-CONTROLLING INTEREST -616,977. CU HOME MORTGAGE SOLUTIONS LLC 11027 MERIDIAN AVENUE N 102 SEATTLE WA 98133 912081649 MORTGAGE PROCESSING AND SERVICING WA VERITY CREDIT UNION UNRELATED -199791 5673556 0 -254476 1 0.90000 1 0 0 0 0 0 0 0 0 0 0 0 1 1 1 0 0 0 0 CU HOME MORTGAGE SOLUTIONS LLC A 84000 CASH PAYMENTS