Listening is a critical skill. It helps build trust, foster open communication, and offers valuable insights into an organization’s strengths and challenges. Last quarter, I embarked on a Listening Tour, visiting your Credit Union’s branches to meet our Members. Here are some things you shared, and what we’ve done with the information.
A big thank you to all who attended those sessions and provided invaluable feedback to help us grow and improve our services. I also want to share how we’re performing and transforming following the losses we sustained in 2024.
And before we go any farther, a happy, belated Fourth of July to all our Members! I trust you had a safe and relaxing celebration.
As I mentioned during the Annual Meeting in April, we incurred some losses in 2024, primarily due to unanticipated loan defaults in our unsecured agency loans.
The good news is that we’re seeing some improvements in our loan experience.
Agent terminations are down from last year, which contributed to loan defaults, and more of our loans are being repaid. We’re encouraged by these trends and are firmly positioned for profitability by the end of the year.
Contributing to these results are overhead cost savings. We made some tough decisions and trimmed our expenses, and are on track for a 6 percent cost reduction by year’s end!
We’re also making progress with debt recovery and loan-loss mitigation efforts. We are working closely with Members who are struggling to help them make their payments.
We also saw our charge-offs decrease last month—essentially, where we write off loans as unrecoverable. We hope these trends continue. Thank you to our Members for paying their loans, which enables us to continue making loans!
We’re also restructuring our balance sheet to build capacity for more loans, to better meet the demand of our Members.
This restructuring has also helped strengthen our net worth ratio—a key financial health measure that industry regulators focus on. We are on track to meet our year-end net worth goal of just shy of 10 percent, which is a strong result.
What else are we doing?
We’re bringing you more competitive rates on real estate loans and auto loans. We know budgets are tight, and our Members continue to need access to better rates for autos, HELOCs, and mortgages. We want to be there for you and support you, your families, and your businesses.
Our latest auto loan rates are truly exceptional, making it easier to buy a new or used car. Our recent cuts to home equity loan rates are also excellent, enabling you to access the equity in your home at a lower cost. Not only are you adding value to your home, but you may also qualify for a tax deduction as an added incentive.
If you’re thinking of buying or selling your home in the current market, we’re here to help with support and guidance throughout the process. We’ve just brought our real estate team in-house to provide you with even more innovative products and services, ensuring you get the best possible deals on buying, selling, and refinancing. We’re already seeing a positive response from Members.
There’s one more major initiative I’d like to highlight from the Listening Tour.
We heard from our business owners, Farmers Agents, and District Managers that we need to find new ways to make loans to support your business growth. We announced some new pricing for Farmers Agents in April, and by the end of August, we will be launching even more solutions to help Protégés and external agents! We’re also investing in improving our digital banking capabilities and offering banking solutions for small and mid-sized businesses. It’s a big strategic investment over the coming months and years!
Wishing you all a great rest of the summer. Thank you for being Members of Farmers Insurance Federal Credit Union. And thank you for putting your trust in us!
Warm regards,
Mirella Reznic
President & CEO
