2011 ANNUAL REPORT
Federally Insured by NCUA
MESSAGE FROM
GOVERNOR NEIL ABERCROMBIE
In Recognition of the Hawai‘i State Federal Credit Union January 25, 2012
On behalf of the people of Hawai‘i, I extend a heartfelt aloha to the Hawai‘i State
Federal Credit Union, its Board of Directors, employees, and more than 75,000
credit union members statewide
The HSFCU has been open to Hawai‘i’s State, City and County employees and
their families and has provided them with financial services administered by
a member-owned, democratically controlled, financial cooperative promoting
community development and thrift.
The HSFCU’s long history of dedicated service to the people of our State is highly commendable. Since
it’s founding in 1936 by 15 government workers, the HSFCU has gained $1.2 billion in assets and has
expanded to branches in Aiea, Honolulu, Mililani, Kaneohe, Kapolei, and Kahului, Maui.
I extend my best wishes to the Hawai‘i State Federal Credit Union for 2012, and much success and
prosperity in the years to come.
Aloha,
NEIL ABERCROMBIE
Governor, State of Hawai‘i
SPECIAL MESSAGE FROM
E
MESSAGE FROM
MAYOR PETER B. CARLISLE
It gives me great pleasure to extend warm greetings of aloha to members
and their families of the Hawaii State Federal Credit Union as it celebrates its
75th Anniversary.
Mahalo to the Board of Directors, management, and staff for your excellent
leadership during a challenging year for state and county employees. I commend
your dedication and commitment to providing your membership of more than
75,000 with the best financial services, highest dividend savings, lowest loan rates
and $1.2 billion in assets.
Since its founding in 1936, the Hawaii State Federal Credit Union has continued to grow and improve
upon its services, making banking more convenient and accessible, and allowing members to conduct
transactions at any time of the day or night.
On behalf of the people of the City and County of Honolulu, I congratulate you on a successful year,
and extend best wishes for continued prosperity and growth.
Peter B. Carlisle
The five story office building on Halekauwila
Street opened on March 20, 1981 and has
served as our Main Branch ever since.
In 1995 Hawaii State FCU opened its first branch
office at 1100 Alakea Street. In 2006 the branch
moved across the street to the Ali’i Place building
and became known as the Ali’i Branch. HSFCU
now operates branch offices in Pearlridge,
Kaneohe, Mililani, Kaimuki, Kapolei, and Kahului.
The Main Branch on Halekauwila Street opened
in 1981. Credit union members, employees,
and volunteers attended the groundbreaking
ceremony in September 1979.
In 2005 Hawaii State FCU expanded
its field of membership to include
employees of the City and County
of Honolulu, County of Maui, County
of Hawaii, and County of Kauai and
their immediate family members.
In December 2008 Hawaii State FCU
opened its first neighbor island branch in
Kahului, Maui.
HSFCU THROUGH THE YEARS
75
TH
ANNIVERSARY MESSAGE | HISTORY OF HSFCU
One of our founding members
Gov. Josepah B. Poindexter
Hawaii State Federal Credit Union’s story began 75 years ago in 1936. The Great Depression had crippled
much of the nation’s economy, driving many banks out of business thus shrinking the amount of credit
available to America’s citizens. Millions of individuals of humble means requiring relatively small loans found
themselves being denied credit by the banks that remained. In response to this growing crisis President Franklin
D. Roosevelt signed into law the Federal Credit Union Act enabling common working people to pool their
money together, provide loans to each other, and collectively improve their economic condition.
It was in this spirit that 15 employees of the Territory of Hawaii came together to form the Hawaii Territorial
Employees Federal Credit Union on October 26, 1936. Included among the original 15 members was the
Governor of the Territory of Hawaii – Joseph B. Poindexter, a Franklin Roosevelt appointee. The original
members made up a diverse cross-section of government employment including treasurers, auditors, surveyors,
and engineers. The names of the original members are printed below:
Howard H. Adams
Toe Y. Awana
Herbert Bacon
H.N. Browne
Louis S. Cain
W.R. Dunham
James L. Friel
W.E. Holt
M.N. Huckestein
Ernest K. Kai
James Y.T. Leong
Alexander May
William C. McGonagle
Joseph B. Poindexter
Francis H. Smith
75 years later, Hawaii State Federal Credit Union now serves over 75,000
members with nearly $1.2 billion in total assets. Though our size and scope
has grown, our core philosophy remains the same: “people helping people”
to collectively improve the lives of each credit union member and the
communities we serve.
1. Hawaii State Federal Credit Union began in 1936 in the
Territorial Office Building in downtown Honolulu, first on the
mezzanine level and then in a one room office in the basement
of the building. The office was so small that if a credit union
employee was assisting a member seated in the office and
someone else wanted to come in, the member would have to
stand up so that the person could get through the door.
2. Needing more space for our growing membership and
operational needs, we moved to the third floor of the
Charles R. Kendall Building on Mililani Street in 1970.
3. The credit union continued to grow and expand and by
the late 1970s it became apparent that we would need our
own building. The five story office building on Halekauwila
Street opened on March 20, 1981 and has served as our
Main Branch ever since.
1
3
2
The History of the MAIN BRANCH
Mildred “Auntie Millie” Botelho
Member Since 1956
“The Credit Union employees make me feel so comfortable,
they know my name. They’re always wonderful, cheerful
and happy”
Kara Iwasaki
Member Since 2008
“I’m really big on customer
service and have had only great
experiences at Hawaii State FCU!”
Renwick “Uncle Joe” Tassill and
Aunty June Toguchi-Tassill
Members Since 1989
“You meet the nicest people at the
HSFCU Annual Dinner, people you would
love to be friends with the rest of your life.
That’s where I met my wife.”
Amy Akina
Member Since 2007
“I wanted to go back to school, because I wanted to be a
role model for my son and the college scholarship money from
Hawaii State FCU really helped because we are both in school.”
Dominic Madamba & Mae Simon
Members Since 2009
“Thanks to Hawaii State FCU, we were
able to purchase our first home!”
Ronald & Eleanor Diaz
Members Since 1975
“We always left the Bank upset, but at
Hawaii State FCU we always leave happy!”
Emily Vergara
Member Since 1982
“The Investing in Education Program provided
the funds to purchase supplies for my classroom
and make memory books for my students.”
Blair Thorndike
Member Since 1976
“My mom was a state worker and she helped me join
when I was 13 years old, so I could buy a new moped.
Over 30 years later, I still enjoy the quick and easy loan
process and super friendly staff.”
Pamela, Jamie & Paige Makiya
Members Since 1985, 1999 and 2010
“I joined Hawaii State FCU
because of the great financial
opportunities and wanted my
daughter and granddaughter to
have the same experience.”
Charles and Marie Mattson
Members Since 1970
“We enjoy doing business with
Hawaii State FCU because their
employees treat us like family.”
Jasen Andrade
Member Since 2009
“As a firefighter, my schedule constantly changes. That
is why I enjoy the convenience of banking with Hawaii
State FCU. They offer free online services and great
member service when I visit the branch
YEAR IN REVIEW
The credit union’s financial position remains strong. Our assets increased $47 million to over $1.2 billion
and our net worth rose 2 percent to over $139 million. Our net worth to assets ratio, a key indicator of
financial strength, was 11.27 percent and earnings were strong at $2.7 million. Total shares increased to
$1.09 billion, up $39.8 million from last year.
Our service to the community and our active participation in charitable events continued in 2011. In
May and June, we participated in a cell phone recycling drive that collected hundreds of old phones and
prevented their toxic materials from damaging the environment. In July and August we participated
in the Aloha Pono Lion’s Club Recycle for Sight program. Members brought in hundreds of pairs of
eyeglasses to be donated to men, women, and children in developing nations. In September, credit union
employees, friends, and family members participated in the Alzheimer’s Association Memory Walk
1
. As
the statewide sponsor for the event, we raised over $15,500 to donate to this worthy cause. In December,
we donated thousands of pounds of food and household supplies to homebound seniors in Kakaako,
Pearl City, and Kaneohe as part of our annual Cheer on Wheels program
2
.
Our commitment to education continued as well. At the beginning of the year, we launched our
16th annual scholarship program which awarded $30,000 to members and their dependents seeking
higher education. In February, dozens of credit union employees and their family members volunteered
their time to help restripe the parking lot at Salt Lake Elementary School as part of the Hawaii
3Rs program
3
. Also in February, we sponsored LifeSmarts, a statewide competition that teaches high
school students essential life skills such as consumer rights and responsibilities and financial literacy
4
.
1
3
2
In August, we donated hundreds of pounds of school supplies to the Kapolei Rotary Club as part of
their annual school supply drive
5
. In September and October, we provided over $$23,500 in grant
funds to Hawaii Department of Education teachers as part of our Investing in Education program.
We also participated for the first time in the Hawaii Jaycees Adopt-A-School Day program. We
adopted Heeia Elementary School in Kaneohe and donated hundreds of pounds of much needed
school supplies.
The credit union also introduced a number of programs that rewarded members for their years of loyalty,
for taking advantage of our services, and for actively helping us grow our institution. We once again
offered our new member referral program in which existing members received $50 for each new member
they referred. New members were also awarded up to $25 for opening a checking account and enrolling
in paperless e-statements. In July, our Gimme $5 promotion rewarded over 1,100 members with $5 just
for switching to e-statements. In August and September, we awarded nine lucky members with three-
night stays at the new Disney Aulani Resort in Ko Olina just for opening new checking accounts, while
in October, 75 lucky members won cash prizes totaling over $19,000 as part of our 75 Prizes for 75 years
member loyalty drawing.
Hawaii State Federal Credit Union looks forward to another year of success in all avenues of operation
and will continue to develop new products and services. We hope you join us for another year of growth
and innovation.
HSFCU
COMMUNITY
SERVICE
4
5
3
BOARD OF DIRECTORS
William Milks
Vice Chairman
Lowell Kalapa
Treasurer
Louise
Akamine
Secretary
Tit Mun Chun
Director
David
Shimabukuro
Director
James Takushi
Director
MESSAGE FROM THE CHAIRWOMAN
This past year the Hawaii State Federal Credit Union celebrated its 75th
anniversary. Since 1936, your credit union has been dedicated to serving the
needs of you, your family, and the broader community. Our success could not
have been achieved without your continued loyalty. Thank you for your support
and patronage.
I am pleased to report that because of our members’ continued support, 2011
was another year of growth and success for the credit union. Membership
remained stable at over 75,000 members while our assets grew $47 million to
over $1.2 billion.
Our strong financial performance allowed us to reinvest in our members and the communities we serve
in numerous ways. In 2011 our 75 Prizes for 75 Years drawing rewarded members for their years of
loyalty with over $19,000 in cash prizes while our new member referral program rewarded members
with $50 for each new member they referred. Our active role in the community continued by raising
over $15,500 for the Alzheimer’s Association, delivering thousands of pounds of food to homebound
seniors, and awarding $30,000 in scholarships.
Looking ahead, we promise to continue delivering the finest financial services available. In 2012 we
will be unveiling a number of technological upgrades that will make your credit union experience more
convenient than ever. However, no matter how sophisticated our new services become, we are still
committed to retaining the personal service that has earned us our reputation and your loyalty while
remaining a safe and sound financial institution. We look forward to serving the future needs of you
and your family for many years to come.
Amy Motooka,
Chairwoman
Warren Motosue
Chairman
Wayne Horie
Member
Derrick Inouye
Member
Manu Kaiama
Member
SUPERVISORY COMMITTEE REPORT
The Supervisory Committee is pleased to report that Hawaii State Federal Credit Union continued to be
in sound financial condition in 2011. A copy of the audited financial statements is available for viewing at
the credit union’s administrative office.
A supervisory committee is required by the Federal Credit Union Act. Committee members are appointed by
the Board of Directors and are responsible for ensuring the credit union’s records are maintained properly,
honestly, and accurately; that policies established by law and by the board of directors are carried out
faithfully; and that members’ assets are safeguarded and used according to the purposes of the credit union.
To fulfill our responsibilities, we contracted the certified public accounting firm of KMH LLP to perform
a financial audit of the credit union’s accounting records as of December 31, 2011; assigned two full-time
internal auditors to conduct audits of the credit union’s operations; worked closely with the National
Credit Union Administration’s (NCUA) examiners; attended Board of Directors meetings; attended Asset/
Liability Committee meetings; investigated member complaints; participated in educational programs;
verified closed accounts; verified members’ accounts; and completed special investigations/studies as we
considered necessary. Finally, we monitored policies established by the Board of Directors to ensure they
promoted the credit union’s mission and were in compliance with NCUA regulations and applicable laws.
We would like to express our
gratitude to the credit union’s
Board of Directors and staff for
their support in helping us to
serve you in 2011.
Warren Motosue
Chairman, Supervisory Committee
SENIOR MANAGEMENT
Edmund Pang
SVP, Finance &
Credit Administration
Pat Hao
VP Human
Resources
Elliot Hatico
VP Sales and Branch
Operations
Jon Nakamoto
VP Internal Audit
Rachael Sasaki
Interim President
Joel Kumabe
Chief Information
Officer
Cindy Ching
VP Support
Services
SUPERVISORY COMMITTEE
LIABILITIES, SHARES AND EQUITY
Accounts Payable & Other Liabilites
Total Shares
Equity
Regular Reserves
Other Reserves
Undivided Earnings
Accumulated Other Comprehensive Income
Total Equity
Total Liabilities, Shares & Equity
$ 6,745,420
$ 1,085,669,957
29,435,000
25,500,000
84,400,358
4,172,741
$ 143,508,099
$ 1,235,923,476
$ 5,765,937
$ 1,045,850,600
29,435,000
25,500,000
81,689,576
(26,805)
$ 136,597,771
$ 1,188,214,308
FINANCIAL STATEMENTS
STATEMENT OF FINANCIAL CONDITION (UNAUDITED)
Loans, Less Allowance for Loan Losses of
$6,856,739 in 2011 and $5,743,618 in 2010
Cash and Cash Equivalents
Investments
Available for Sale
Held to Maturity
Restricted
Total Investments
Certificates of Deposit
Other
Accrued Income Receivable
Property and Equipment, Net Depreciation
National Credit Union Share Insurance Fund
Other Assets
Total Other
Total Assets
$ 550,667,461
$ 130,007,033
$ 455,465,696
2,343,172
2,198,300
$ 460,007,168
$ 60,099,000
3,839,064
16,705,123
10,663,185
3,935,442
$ 35,142,814
$ 1,235,923,476
$ 552,486,358
$ 84,367,227
$ 341,314,985
10,213,954
2,198,300
$ 353,727,239
$ 165,099,000
4,307,849
16,817,475
9,703,514
1,705,646
$ 32,534,484
$ 1,188,214,308
2011 2010
ASSETS
STATEMENT OF RESERVES AND UNDIVIDED EARNINGS (UNAUDITED)
2011
$ 136,597,771
2,710,782
4,199,546
$ 143,508,099
2010
$ 135,804,883
3,693,922
(2,901,034)
$ 136,597,771
STATEMENT OF INCOME
STATEMENT OF INCOME (UNAUDITED)
Interest on Loans
Interest Rebate on Loans
Income from Investments
Total Interest Income
Interest Expense
Dividends Paid to Members
Bonus Dividends Paid to Members
Interest on Borrowed Funds
Total Interest Expense
Net Interest Income
Non-Interest Income
Non-Interest Expense
Compensation and Employee Benefits
Provision for Loan Losses
Office Operations
Professional and Outside Services
NCUA Assessments
Office Occupancy
Loan Servicing
Promotions & Advertising
Member Insurance
NCUA Operating Fee
Training
Association Dues
Annual Meeting
Other Operating Expenses
Total Non-Interest Expense
Income from Operations
Non-Operating Income (Loss)
Loss on Investment-Impairment
Other
Total Non-Operating Income (Loss)
Net Income
31,658,494
-
12,465,745
$ 44,124,239
8,971,136
-
2
$ 8,971,138
$ 35,153,101
$ 6,757,898
$ 13,210,571
6,637,000
4,966,115
4,768,324
2,665,796
2,014,717
1,607,317
1,210,008
303,166
240,137
144,653
118,660
114,427
273,703
$ 38,274,594
$ 3,636,405
-
(925,623)
$ (925,623)
$ 2,710,782
33,232,412
(952,806)
14,310,842
$ 46,590,448
11,613,102
959,992
6,192
$ 12,579,286
$ 34,011,162
$ 7,234,080
$ 13,671,026
6,331,500
4,592,031
4,094,043
2,478,448
1,925,498
1,554,864
1,213,547
281,761
234,501
328,714
130,279
84,544
272,065
$ 37,192,821
$ 4,052,421
(606,660)
248,161
$ (358,499)
$ 3,693,922
2011 2010
Interest Income
Balance as of January 1
Net Income
Other Accumulated Comprehensive Income (Expense)
Balance as of December 31
Main
560 Halekauwila Street
Honolulu, HI 96813
7:30 a.m. – 5:00 p.m. Mon – Fri
7:00 a.m. – 5:00 p.m. on State Paydays
Alii
1099 Alakea Street, Suite 100
Honolulu, HI 96813
7:30 a.m. – 5:00 p.m. Mon – Fri
7:00 a.m. – 5:00 p.m. on State Paydays
Kaimuki
Kaimuki Shopping Center
3221 Waialae Avenue, Suite 16-B6
Honolulu, HI 96816
8:30 a.m. – 4:30 p.m. Mon – Fri
9:00 a.m. – 1:00 p.m. Sat
Kapolei
Kapolei Shopping Center
91-590 Farrington Highway, Suite #140
Kapolei, HI 96707
9:00 a.m. – 6:00 p.m. Mon – Fri
9:00 a.m. – 1:00 p.m. Sat
Mililani Mauka
95-1095 Ainamakua Drive, #9
Mililani, HI 96789
9:30 a.m. – 6:30 p.m. Mon – Fri
9:00 a.m. – 1:00 p.m. Sat
Pearlridge
Westridge Shopping Center
98-150 Kaonohi Street, #C101
Aiea, HI 96701
9:00 a.m. – 6:00 p.m. Mon – Fri
9:00 a.m. – 5:00 p.m. Sat
Kaneohe
46-028 Kawa Street, Suite B1
Kaneohe, HI 96744
9:00 a.m. – 6:00 p.m. Mon – Fri
9:00 a.m. – 1:00 p.m. Sat
OAHU BRANCHES
MAUI BRANCH
Kahului
Triangle Square
425 Koloa Street, 101B
Kahului, HI 96732
8:30 a.m. – 4:30 p.m. Mon – Fri
9:00 a.m. – 1:00 p.m. Sat
AAFES Building
919 Ala Moana Blvd
State Capitol
Chamber Level
415 S. Beretania St.
Queen Liliuokalani Building
1390 Miller St.
Off Punchbowl, across Queens Hospital
Kalanimoku Building
1151 Punchbowl St.
Between S. King and Beretania St
Leiopapa A Kamehameha Building
235 S. Beretania St.
Corner of Beretania and Bishop St
Keelikolani Building
830 Punchbowl St.
Corner of Punchbowl and Halekauwila St
Kinau Hale (Department of Health)
1250 Punchbowl St.
Corner of Punchbowl and Beretania St
Kakuhihewa (Kapolei State Office Building)
601 Kamokila Blvd, 2nd Floor
Ronald T. Y. Moon Judiciary Complex
4675 Kapolei Pkwy.
UH John A. Burns School of Medicine
651 Ilalo St.
Kaneohe Branch
46-028 Kawa St, Suite B1
Pearlridge Branch
98-150 Kaonohi St #C101
Main Branch
560 Halekauwila St
Alii Branch
1099 Alakea St, Suite 100
Mililani Mauka Branch
95-1095 Ainamakua Dr, #9
Kaimuki Branch
3221 Waialae Ave, Suite16-B6
Kahului Branch
425 Koloa St #101B
Kapolei Branch
91-590 Farrington Hwy, Suite 140
Member Service Call Center
587-2700 (Oahu)
1-888-586-1056 (Neighbor Islands & U.S. Mainland toll-free)
Website
www.HawaiiStateFCU.com
Mailing Address
P.O. Box 3072
Honolulu, HI 96802
ATM LOCATIONS
CONTACT US
