2022 UNCLE Credit Union Annual Report

2022 ANNUAL REPORT

P A T H W A Y S EXPANDING OPPORTUNITIES

CHAIRMAN OF THE BOARD REPORT Chung Bothwell, JD, LLM | Chairman, Board of Directors

UNCLE has been a proud season sponsor for going on five years, this new sponsorship included the naming of the Bankhead’s art gallery, the UNCLE Credit Union Art Gallery. This art gallery located inside the Bankhead Theater in downtown Livermore features a lineup of unique art themes that rotate throughout the year. The sponsoring of the art gallery is just one example of how our credit union encourages members and employees to give back to our neighboring communities and support the local economy. Further community support came in the form of events and educational seminars that were held throughout the year. These events included our yearly Shred Fests and Wealth Management seminars, both of which were offered completely free to current and potential members. During our Fall Shred Fest, we partnered with a corporate e-waste company to host the “Tech for Good” event, which asked community members to donate used laptops which are refurbished and given back to our city’s community members in need. Partnerships like these are how UNCLE Credit Union continues to live by our People Helping People philosophy. In addition to celebrating our own anniversary, we had the honor of sponsoring and attending the 70th anniversary of the Lawrence Livermore National Laboratory. It is always with great honor to be included in these milestones with Lawrence Livermore National Lab, as our credit union continues to be the preferred financial institution by most laboratory employees. UNCLE continued celebrating in big ways in 2022 including receiving the Top Workplace designation from San Francisco Chronicle. This

is a highly coveted title that many companies and organizations strive for and will continue to help UNCLE grow as we recruit more talented individuals in this current competitive job market. Among other awards and accolades received by UNCLE in 2022 included “Best Credit Union in the East Bay” by the East Bay Times, and runner up in four categories for the “Best of San Joaquin” hosted by the Stockton Record. Our “Best in East Bay” title has earned us Hall of Fame status, for a consecutive 5-year sweep for the credit union category. These competitions are voted on by readers of each newspaper outlet, and do not categorize companies by size or employee number, which means we are put up against competitors two-to-three times our size—a great accomplishment in itself! At the end of December 2022, we achieved assets over $734 million and served over 34,000 members. This remarkable growth rate further reinforces our reputation for providing excellent services to our members. While we know that 2022 has been a challenging year for many, we want to remind our members, employees, and community that UNCLE’s number one priority is keeping your money in good hands. UNCLE has taken every measure to protect each member’s share as we navigate through high inflation, sophisticated scammers, and a potential recession. In doing so, UNCLE also continues to focus on growth within our organization, which will ultimately help us continue to be stronger and resilient for years to come. We support all our members to the fullest regardless of financial circumstances and will continue to do so as we progress along this path together.

PEOPLE HELPING PEOPLE is a phrase we use regularly to describe how our credit union supports its employees, members, and our local community. As we reflect on what UNCLE has accomplished throughout 2022, it is clear People Helping People was at the top of our priorities when celebrating our 65 th year in business and this motto has continued to be our goal for the credit union. As part of our 65 th anniversary celebration, UNCLE Credit Union focused heavily on community involvement and service. Our group of leaders and employees contributed over 900 hours of community service as part of UNCLE’s employee volunteer program. These volunteer opportunities included food packing around the holiday season, bringing cheer to hospice patients, collecting food for shelter animals, and many hours volunteering for a variety of professional groups in our industry. Our team is proud to have contributed this many hours, exceeding the organization’s goal of 650 hours of community giveback. In addition to volunteered time, our organization contributed more than $150,000 in sponsorships and donations to other local charitable organizations, including the sponsorship of Livermore Valley Arts at the Bankhead. While

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PRESIDENT AND CEO REPORT Harold Roundtree, President/Chief Executive Officer

loans, with over 23% in annual growth. UNCLE’s total loans grew by over $115 million in 2022, demonstrating the credit union’s ability to quickly meet the financial needs of the membership. Auto loans and home equity lines of credit were in high demand and the credit union took great pride in offering highly competitive products to be the lender of choice for many consumers. While there continues to be fluctuations in federal interest rates, home equity lines remain a great option for members who own real estate, whether owner or non-owner occupied. Another success the credit union celebrated throughout 2022 was the implementation of Zelle, a digital payment platform that offers real- time money transfers. This project was supported and executed by several key areas within the credit union to ensure the product was fully functional when introduced to members. With the implementation of Zelle, members can now easily and directly transfer funds to family, friends, or between their accounts at different institutions, all within UNCLE’s digital banking platform. Having this capability available to members is an immense achievement for the credit union, as we continue to compete with larger financial institutions that offer these types of services. At the end of 2022, over 51,000 Zelle transactions were successfully processed through the UNCLE mobile app, which currently holds an average app rating of 4.78 in the Android and IOS app stores. As the credit union expanded our digital services, UNCLE also continued to upgrade technology systems to mitigate potential threats of fraud. For example, additional measures were taken to protect members from new and emerging vulnerabilities by creating a dedicated Fraud

Department in 2022. This team works diligently to prevent and mitigate fraud losses across all channels, including ACH, mobile deposits, online banking, and real-time payments. UNCLE consistently makes fraud prevention a priority to ensure the safety and soundness of the credit union, and most importantly, members’ investments and earnings. We look forward to continued successes and achievements at UNCLE Credit Union as we work hard to deliver the products and services to meet members’ needs well into the future.

UNCLE CREDIT UNION closed out 2022 on top, with a successful merger, strong membership and loan growth, and new technology and services for members, despite an unpredictable economy, including several interest rate hikes. Throughout the year, UNCLE’s dedicated and talented staff remained ready to take on each new challenge. A key highlight of the year was the successful merger of UNCLE Credit Union and Moore West Federal Credit Union. Moore West was a small, San Leandro-based, credit union with limited ability to continue to provide expanded financial products and services to their membership. After weighing the outcomes and risks, the credit union decided completing this merger would result in a big win for UNCLE, as well as the members of the former Moore West. As a result, UNCLE acquired nearly 800 new members, along with nearly $12 million in assets, contributing to the credit union’s strong asset growth and over 10% membership growth in 2022. The credit union also welcomed the staff of Moore West who joined the UNCLE team and continues to serve the combined membership base which now extends further into Alameda County and the greater Bay Area.

On behalf of UNCLE Credit Union’s Chairman of the Board and President/CEO, thank you for your ongoing support and for your trust in us. Together we will continue to make UNCLE a premier financial institution for many years to come.

Along with growth within the membership, the credit union also saw a significant increase in

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EXPANDING AND COMING TOGETHER

2022 was a year of expanding our pathways, while connecting employees with the community more than ever. Including employees from different areas of the organization, we attended more than 100 events in 2022. Spanning from San Francisco to Stockton, the UNCLE Team appeared everywhere to celebrate milestones of our own, along with celebrating the achievements of others in our community.

Top Workplace Awards Ceremony. The UNCLE Team at Oracle Park in San Francisco to accept our 2022 Top Workplace award!

Stockton Ribbon Cutting Ceremony. After a prolonged delay due to the pandemic, our Stockton Financial Center grand opening was celebrated with a ribbon-cutting ceremony! We thank the multiple organizations and members of the San Joaquin community who supported this memorable moment for UNCLE.

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2022 AWARDS & RECOGNITION

2022 Top Workplace in the San Francisco Bay Area Recognized by The San Francisco Chronicle

Livermore Valley Arts and the UNCLE Credit Union Art Gallery. We announced our largest contribution to date

in the amount of $100,000 to help with long-term support of the visual art exhibits in the Bankhead Theater. This partnership allows UNCLE and the Livermore Valley Arts to ensure the current and future enrichment of our city and surrounding areas, giving our next generations programming and opportunities to learn and grow. In July of 2022, the UNCLE Team, Livermore Valley Arts , and many members of the community celebrated our partnership and the unveiling of the UNCLE Credit Union Art Gallery at our ribbon-cutting ceremony.

Best Credit Union in the East Bay , Fifth Consecutive Year Recognized by The East Bay Times

Best of San Joaquin Finalist in the categories of Credit Union, Auto Loans, Business Loans and Mortgage Lending Recognized by The Stockton Record

Marketing Association of Credit Unions Award Winner in the categories of Social Media and Non-Commercial Video Recognized by the Marketing Association of Credit Unions

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COMMUNITY INVOLVEMENT

HOURS OF VOLUNTEERING! 900+

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VTO Volunteer Time Off is an employee program at UNCLE that encourages employees to become more involved in the local community. As an organization, UNCLE strives to make a difference outside of banking, which is why social responsibility is such an important value to our company culture. Along with volunteer hours contributed, UNCLE also committed sponsorships and donations to charitable organizations such as Valley Humane Society, Brighter Christmas of Tracy, Toys for Tots and more. UNCLE management and employees are committed to continuing this level of local give back for many years to come.

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AUDIT COMMITTEE REPORT

Robin Morris , Audit Committee Chair

The Audit Committee of UNCLE Credit Union independently evaluates the soundness of UNCLE Credit Union’s operations and activities. Throughout the year, the committee meets with management to monitor the internal controls and initiatives implemented.

The Audit Committee also meets with various regulators and oversees the internal audit function as well as meeting with the financial statement auditors to discuss the annual audit. Based on the results of the annual audits performed by our certified public accountants, as well as examinations conducted by state and federal regulators, we conclude that UNCLE Credit Union has adequate financial controls and is financially sound.

KEY PERFORMANCE METRICS

ASSETS

2022 $54,804,662

2022 $734,869,392

2020 $50,915,650 2021 $54,464,983

2021 $635,989,386

2020 $568,131,777

NET WORTH

LOANS

2022 $602,137,653

2021 $484,186,255

2020 $459,688,150

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BOARD OF DIRECTORS

Left to right: Lee Neely, Bob Corey, Neda Gray, Hugh Bussell, Robin Morris, Chung Bothwell, John Freeman, John Stein, Mila Shapovalov, Clay Smith, Peter Goldstein

SENIOR MANAGEMENT

Upper left to right: James Fisher, Blair Conner, Harold Roundtree, Lower left to right: Terry Bishop, Gina Bloomfield, Dree Johnson, April Ingram

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2022 FINANCIAL PERFORMANCE

Statement of financial condition

2020

2021

2022

ASSETS Loans to Members Allowance for Loan Losses Cash & Cash Equivalent Total Investments NCUSIF Land & Building

459,688,150 (2,663,430) 66,439,521 12,850,865 4,307,002 2,291,330 2,296,165 1,468,296 21,453,878 568,131,777

484,186,255 (1,792,719) 82,625,708 36,798,696 4,844,659 2,406,463 2,005,285 1,402,879 23,512,160 635,989,386

602,137,653 (2,358,902) 40,979,317 71,112,164 5,107,308 2,280,080 1,675,935 1,901,193 12,034,644 734,869,392

Other Fixed Assets Other Receivables Other Assets TOTAL ASSETS

LIABILITIES Accounts Payable & Other Liabilities Notes Payable TOTAL LIABILITIES SHARES & DEPOSITS Shares & Deposits TOTAL SHARES & DEPOSITS

6,508,275 12,500,000 19,008,275

5,448,337 5,000,000 10,448,337

7,272,570 84,500,000 91,772,570

500,651,620 500,651,620

572,853,732 572,853,732

596,131,681 596,131,681

EQUITY Regular Reserves Accumulated Unrealized Gain(Loss) Available for Sale Securities Accumulated Unrealized Gain(Loss) Pension Undivided Earnings Equity Acquired in Merger TOTAL EQUITY TOTAL LIABILITIES, SHARE & EQUITY

5,252,406 263,259

5,252,406 131,808

5,252,406 (6,036,719) (2,498,881) 47,389,958 2,858,377 46,965,141 734,869,392

(3,403,106) 43,132,633 3,226,690 48,471,882 568,131,777

(2,605,553) 46,681,966 3,226,690 52,687,317 635,989,386

UNAUDITED

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Income and expenses

2020

2021

2022

Year Ending

Dec. 31, 2020

Dec. 31, 2021

Dec. 31, 2022

INCOME Interest on Loans Income on Investments Other Income TOTAL INCOME EXPENSES Salary & Benefits Travel & Conference Office Expenses

18,458,458 581,527 6,757,695 25,797,680

18,073,191 439,438 5,421,157 23,933,786

20,813,539 1,357,013 7,574,803 29,745,355

9,120,849 217,873 5,151,075 606,261

9,585,839 157,703 5,857,264

11,291,404 281,892 6,656,018 833,033 2,554,440 2,144,524 1,679,807 81,250 338,014 25,860,382 795,524 840,740 1,636,264 0 (1,540,717) 707,992

Education & Promotion Provision for Loan Losses Professional & Outside Services Loan Servicing Expense

748,022 290,009

2,097,676 1,675,820 1,325,332 61,517 159,642 20,416,045 969,806 169,070 1,138,876 0 20,591 4,263,350

2,225,294 1,364,782 70,240 128,373 20,427,526

Operating Fees Misc. Expenses TOTAL EXPENSES

Dividend & Interest Expense Paid to Members Interest on Borrowed Money TOTAL DIVIDEND & INTEREST EXPENSE

546,797 125,807 672,604

Gain (Loss) on Disposition of Assets Gain (Loss) on Investments NET INCOME(LOSS)

1,867 713,810 3,549,333

“ Where you come from does matter, but not nearly as much as where you are headed. ” - Jodi Picoult, American writer

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