To help our members through the uncertainties of 2020, we adjusted the hours of operation at several of our branches and temporarily closed others, while increasing the number of staff and services provided through our True North Hub, so that members could access the services that they needed, without having to come into a branch. Many of our members faced unforeseen financial struggles and needed our understanding, support and guidance. Northern responded by processing over 1600 payment alterations, and over 450 applications for the Canada Emergency Business Account (CEBA). These extra efforts supported our members at a time when they needed it most.
2020 also strengthened our resolve to focus on delivering streamlined and efficient end-to-end processes that would allow us to collectively deliver more efficient and effective services to our members. As the financial landscape changes and evolves, Northern must continue to ensure our business processes remain relevant and reflect the changing needs of our members. In 2020, working closely with an expert in credit union operations, we launched a review of our internal business processes. The purpose of this review was to explore opportunities to deliver a superior member experience, and build a sustainable and viable Northern Credit Union for the future. As we move into the second phase of this project in 2021, we will be consolidating our branch footprint, and streamlining our resources. It is the ability to make these difficult decisions that will ensure that Northern can continue to modernize our services, keep up with changing member behaviours and industry trends, and ensure our long-term sustainability.
From a financial perspective, we, like all other financial institutions, were significantly impacted by the sudden drop in interest rates and demand for lending. This lack of demand resulted in lending decreasing by approximately 1.5% or over $20 million. Unlike the recession of 2008, members' spending habits shifted resulting in significant growth in deposits. As a result, we ended the year with total assets increasing just under 10% or just shy of $1.7 billion. Net income was significantly impacted by a drop in margin and other income, as well as an increase in loan losses. Through proactive management of expenses and outreach to our members, we were able to end the year with a net income of just under $2.0 million. In summary, 2020 has been a very unusual year with all areas of Northern’s business being impacted.
Despite the challenges of 2020, which were especially evident in the last two quarters of the year, Northern was successful in many areas. In response to member feedback, we introduced a renewed suite of deposit products, and members were especially pleased to benefit from free E-transfers and online void cheques. We also introduced “Fred”, our chatbot. Fred provides our members with answers to routine questions, leaving valuable time for our staff to have deeper conversations with our members. Much work was also undertaken to introduce our fully redesigned website, which was launched in early 2021. We were especially proud to learn that six of Northern’s younger members were awarded over one-third of the total scholarship funds offered through the Credit Union Succeed Bursary.
2020 was the first year that our Annual General Meeting was held virtually, and the first time that all of our 70,000+ members had the opportunity to electronically vote on matters coming before the membership. “One member, one vote” gives all of our members a say in the election of our Board of Directors and the future of our Credit Union. In 2020, 664 of our members voted and exercised their benefit of membership. I am especially pleased to report that votes were representative of all age groups and communities within our footprint. A similar process will be used in 2021 and we are confident we will have an even greater voter response.
Once again, in 2020, both our members and our staff have voiced their support for Northern. Throughout the year, members have overwhelmingly indicated that Northern's service and advice met their expectations related to the services we provide. Overall, our members are very pleased with the level of service they receive from both our in-branch and self-serve channels, and they indicate that they would recommend us to others. Staff have once again confirmed that Northern is a Great Workplace™ as determined by our annual staff engagement survey, which resulted in Northern being certified, as a “Great Place to Work in Canada”.
I am always impressed, but never surprised, by the level of giving back to our communities that are initiated by both our members and our staff, and this was evident again in 2020. Very early in the pandemic, staff quickly rose to the task of creating a COVID relief fund, called the True North Stronger Fund. Through this fund, member donations were matched by Northern and many members in our communities benefited from this fund, administered through our partnership with United Way. Staff and members also contributed to the Making Spirits Brighter Fund where one deserving member in each of our communities received financial support in advance of the holiday season. Staff also organized and supported many other branch sponsored and local events. Northern has demonstrated once again, that in good times and bad, we are there for them. As always, in 2020, our members and their communities benefited from the ongoing support of their credit union.
As we move into 2021, we have much to do. We will continue with the work we commenced in 2020 - to realign our organization to find ways to be more efficient and improve our processes to ensure that we are ready to meet the ever changing needs of members. Our goal is to stay relevant, improve the banking experience, and enhance core processes. We will focus on building a viable organization that allows us to continue to invest in our members and our communities.
Respectfully,
Richard Adam, President, and CEO
