2024AnnualReport-DIGITAL-3.19.25

This is Frontwave Credit Union's Member Newsletter for First Quarter 2019

2 0 2 4 Annual Report

Forging our own path since 1952. Banking • Lending • Saving • Planning

Chairman’s REPORT

Expanding Our Services We continued to enhance our products and services to deliver more valuable and better experiences for our Members across all channels, including online and mobile banking. Recognizing the evolving needs of our Members, we launched a new Business Banking platform to better serve small business owners, entrepreneurs, and professionals with financial solutions to help their businesses grow and thrive. By improving operational efficiencies, we reduced overall operating expenses while increasing investments in technology, demonstrating our commitment to responsible fiscal management.

2024 LEADERS

In 2024, we saw a year of growth and innovation through our unwavering commitment to serving our Members and the communities we call home. We reinforced our financial strength, but more importantly, we deepened community ties and enhanced the services that matter most to our Members. I am honored to share the key milestones and achievements that shaped this remarkable year.

Brian Sutton Chairman

Michael Brigagliano Vice Chairman

Financial Performance

Frontwave maintained a strong financial position in 2024 while navigating a challenging interest rate environment. We delivered solid financial results through prudent management, strategic decisions, and a steadfast commitment to providing the most value to our Members. We earned $7.3 million in net income, boosting our Net Worth Ratio to a healthy 9.99%, reinforcing Member deposit security and paving the way for continued growth and innovation. This performance also enabled us to pay a record $16.7 million in dividends to our Members.

Looking Ahead

Amanda Cook Treasurer

Gary Greving Secretary

Building on the success of 2024, we look ahead to 2025 with confidence and excitement. Frontwave Credit Union will continue to innovate, adapt, and deliver the financial solu- tions and resources that drives the greatest positive impact on the evolving needs of our Members. Our commitment re- mains strong, and we’re ready to seize new opportunities to serve, support, and empower those who trust us with their financial future. Thank you for your ongoing trust, support, and Membership. We look forward to serving you for many years to come.

Member Impact

Recognition & Trust

We gave back more than ever, paying record dividends on deposits. It’s a testament to our commitment to ensuring our Members’ hard-earned money works harder for them. We also provided over 60,000 hours of financial education, equipping Members with the knowledge and tools to turn their financial dreams into reality.

The communities we serve recognized our commitment to improving the financial wellness of our Members. In 2024, Frontwave was honored as San Diego’s Best Credit Union by the San Diego Reader and Best Bank in the Morongo Basin by the High Desert Times. These awards reflect the trust and loyalty of our Members and reinforce our dedication to delivering exceptional service and value.

Sally Arnett Director

Kelley Mayer Director

Dream Big. We Got You.

Brian Sutton Chairman of the Board

Community Philanthropy & Engagement

Joseph Mitilieri Director

Gerald Polyascko Director

Giving back is at the heart of Frontwave. In 2024, we expanded our impact, strengthening communities through action and partnership. We launched Frontwave Give360 to turn dollars into real change by funding vital programs, supporting nonprofits and uplifting the neighborhoods where we live, work and serve. The Frontwave Foundation provided $43,550 to charitable organizations, investing in scholarships, financial education and emergency relief to build lasting solutions. Our commitment grew with the grand opening of Frontwave Arena in September 2024. As the financial sponsor of the San Diego Sockers, San Diego Clippers and San Diego Strike Force, we proudly support local sports and create opportunities for Members to connect. We don’t just believe in change. We make it happen. Stronger communities aren’t built in a day. They’re built every day.

Ann Regan Director

Bill Birnie President/CEO

Treasurer’s Frontwave Credit Union continues to successfully fulfill its mission making financial dreams come true, both within the Marine Corps and the communities we serve in San Diego, Riverside and San Bernardino counties. As a result, the Credit Union’s financial performance continued to improve in 2024 as it supported members through a high-interest rate environment. Short-term interest rates peaked during the year at over 5%, however the Federal Reserve began reducing short-term rates with a 0.50% reduction in September followed by an additional 0.25% reduction in both October and December. Despite higher rates reducing member demand for consumer and real estate loans, Frontwave was successful in growing its loan portfolio by 1.72% from the prior year end. Higher rates also led to increased dividend payments to members. During 2024, Frontwave paid its members a record $16.7 million in dividends. REPORT

Assets Cash, prepaids, receivables & other assets 2024 Financial Statements*

12/31/24 120,887,531 778,479,337 61,605,884 120,355,353 (7,714,340) 299,000,822 11,094,747 25,389,465 1,409,098,797 1,109,827,517 52,046,020 88,701,808 (28,734,047) 187,257,500 1,409,098,797 48,256,059 12,781,157 28,030,076 89,067,292 (26,015,998) (24,980,437) (3,153,693) 4,292,720 33,072,009 ( 2 5 , 8 1 4 , 96 0 ) 7,257,050

12/31/23 151,875,343 833,537,732 58,696,601

$

Regular loans to members Visa ® loans to members Purchased loans Less allowances for loan losses Investments NCUA Share Insurance Fund Fixed assets (net) Total Assets

51,971,059 (7,707,017) 304,003,373 11,229,831 26,273,826 1,429,880,748 1,203,417,728 52,046,638 81,444,759 (35,634,058) 128,605,681 1,429,880,748 41,974,964 7,614,687 27,311,539 76,901,190 (25,271,702) (32,486,032) (3,013,424) 4,824,656 20,954,688 ( 1 6 , 7 1 4 , 41 9 ) 4,240,269

$

Liabilities and Equity Shares of members

$

Reserves Undivided earnings Unrealized gain/(loss) on AFS Investments Other liabilities Total Liabilities & Equity

Our solid financial performance and contributions to the community reflect our commitment to strengthening the financial well-being of our members and communities. As a financial cooperative, our member-owners gain value by banking with Frontwave. We thank our loyal new members and encourage them to explore all available products and services Frontwave has to offer. We are grateful for our members’ trust as we continue to strive to be the best place they’ve ever banked. A strategic focus in 2024 was seeking operating efficiencies that improved the member experience and eliminated costs. This ongoing effort resulted in a net reduction in operating expenses in 2024 despite continued investment in technology designed to improve service to our members. As a result, Frontwave generated net income of $7.3 million, increasing its Net Worth Ratio to 9.99%. With a Net Worth Ratio of nearly 10%, Frontwave is considered well capitalized by industry regulators. Being well capitalized ensures member deposits are safe, and enables the Credit Union to grow, continue to enhance services, and offer competitive rates to our members.

$

TOTAL MEMEBRSHIP

Profit and Loss Analysis Interest from loans Interest from investments Other income Total Income

+0.64%

$

$

Compensation & benefit expenses Office operating costs Education and promotion Other non-operating income (expense) Available for dividends Less dividends paid Net Income

$

TOTAL ASSETS

-1.45%

$

TOTAL DIVIDENDS PAID TO MEMBERS +27.5%

Members

Shares (in millions)

Assets (in millions)

$1,176

117,291

$1,040

2021

2021

2021

2022 2023

2022 2023

2022 2023

$1,359

122,555

$1,086

$1,430

124,372

$1,203

2024

2024

2024

$1,409

125,171

$1,110

TOTAL INCOME

Loans (in millions)

Capital (in millions)

Net Income (in millions)

+15.82%

$636

$125

$8.36

2021

2021

2021

2022 2023

2022 2023

2022 2023

$941

$131

$5.58

$944

$133

$4.24

Amanda Cook Treasurer

2024

2024

2024

$960

$141

$7.26

*This information has been derived from the Credit Union’s annual unaudited financial statements.

GIVE360

Supervisory Committee REPORT

EVENTS

We believe in the power of community and the impact of meaningful partnerships. That’s why we’ve created Frontwave Give360, Frontwave Credit Union’s comprehensive, 360-degree approach to giving, ensuring every dollar raised and every resource donated is reinvested directly into the local organizations that strengthen the neighborhoods where we live and serve.

Our mission is simple: Foster a brighter future by empowering organizations to thrive and helping build stronger, more resilient communities, one partnership at a time.

PETS ADOPTED 26

The Supervisory Committee is responsible for ensuring that the assets of Frontwave Credit Union are safeguarded, an independent audit is performed annually, and appropriate controls exist to ensure compliance with management’s objectives and regulatory requirements. The Supervisory Committee is made up of volunteer members who independently evaluate the strength, safety, and soundness of the credit union’s operations and activities. As an independent and objective body, the Supervisory Committee engages in regular monitoring of financial reporting, verification of membership account balances, compliance with legal and regulatory requirements, and oversight of independent auditors and internal controls. In 2024, the Supervisory Committee contracted with the Certified Public Accountant firm of SingerLewak LLP to perform an independent audit of the Credit Union’s financial statements. In their opinion, the financial statements were presented fairly and, in all material respects, the financial position of Frontwave Credit Union as of December 31, 2024, is sound. The

results of operations and cash flows for the year were in accordance with Generally Accepted Accounting Principles (GAAP). The financial statements in this Annual Report are unaudited, since they reflect January through December 2024. The Supervisory Committee is satisfied that the records reflect Frontwave Credit Union’s financial condition and that it continues to operate with strong internal controls in accordance with board policies and the Credit Union procedures. The Supervisory Committee wishes to thank the Board of Directors, Executives, Management and employees for their diligence, support, and dedication to the wellbeing of our membership and of Frontwave Credit Union. The Supervisory Committee wishes to thank our members for your continued confidence and trust in Frontwave Credit Union.

PEANUT BUTTER DRIVE

SEMI-ANNUAL PET ADOPTION EVENT

800 lbs OF PET FOOD DONATED

Matched 26 pets with homes and donated 800+ pounds of pet food to local shelters.

Collected enough peanut butter for 3,000+ sandwiches to support the San Diego County Food Bank.

200 lbs PEANUT BUTTER DONATED

1k lbs FOOD DONATED TO BROTHER BENNO’S

ASYMCA SANTA’S WORKSHOP

HOLIDAY FOOD & CLOTHING DRIVES

Led holiday drives, donating 1,500+ pounds of food and mobilizing branches to support local nonprofits.

Spread cheer to 1,000+ military kids with toys, essentials, and holiday magic, plus a festive hot cocoa bar!

Robert Ross Chairman, Supervisory Committee

76,540 MARINE CONNECTIONS 60,085 HOURS OF FINANCIAL EDUCATION TAUGHT IN 2024 $270K GIVEN BACK TO OUR LOCAL COMMUNITIES 200+ MILITARY & LOCAL ORGANIZATIONS SUPPORTED THROUGH SPONSORSHIPS, EVENTS & VOLUNTEERISM

LOCATIONS

WEBSITE frontwavecu.com MEMBER SOLUTION CENTER 800.736.4500 EXPRESS LINE 800.829.7676

Barstow Camp Pendleton - Mainside Camp Pendleton - Pacific Plaza Camp Pendleton - SOI Escondido Oceanside - Fire Mountain Oceanside - Rancho Del Oro San Diego - MCRD

San Marcos Temecula - Winchester Twentynine Palms Wildomar Yucca Valley

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