2 Annua 0 17 l Report 2017

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Delilah Lester
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1 0 Annual Report 2017

YOUR CREDIT UNION FAMILY We are California Credit Union providing our members with superior products, enhanced member services, and an exceptional branch experience.

2 YOUR CREDIT UNION FAMILY We are California Credit Union providing our members with superior products, enhanced member services, and an exceptional branch experience. We hold a strong commitment to financial literacy, enlightening our community and our youth providing the training and support they need from a true financial partner in San Diego and Los Angeles counties. Teacher Grant We celebrated our sixth year of the Teacher Grant Program, helping educators fund innovative learning opportunities for their students. In 2017, the program was extended into San Diego County. Since the program s inception in 2012, we have awarded more than $65,000 to educators.

A MESSAGE FROM THE PRESIDENT & CEO AND FROM THE BOARD CHAIR 2017 marked a very significant year for California Credit Union, as it was a time when our staff worked diligently to finalize our

As a newly combined organization, we have the advantage of offering an enhanced product line and new innovative services through our extended network of branches in Los Angeles and San Diego.

We are never too busy to listen, and never too big to lose sight of what is important our members first and foremost.

3 A MESSAGE FROM THE PRESIDENT & CEO AND FROM THE BOARD CHAIR 2017 marked a very significant year for California Credit Union, as it was a time when our staff worked diligently to finalize our integration into one credit union for the benefit of our members. As a newly combined organization, we have the advantage of offering an enhanced product line and new innovative services through our extended network of branches in Los Angeles and San Diego. As a member-focused financial institution, we are deeply committed to providing value, service and convenience for our members. We are never too busy to listen, and never too big to lose sight of what is important our members first and foremost. Over this past year, our efforts focused on several initiatives to better serve our members, both online and in-person. We invested in comprehensive training, the thoughtful evaluation of our products and services and the enhancement of our digital properties, including the introduction of a new website. Additionally, we consistently offered pre-approvals throughout the year, further simplifying the process to make obtaining a loan easy for our members. As noted in the report, our assets now exceed $3 billion, with a net income for 2017 of $15.4 million. As we continue as a newly combined organization, we look for new ways to offer the right financial solutions through contemporary channels to ensure that we continue to exceed our members expectations for years to come. California Credit Union takes pride in funding programs that enhance the community in which we live and work. With deep roots in the community, we continued to contribute to programs that invest in military support initiatives, educational enhancement opportunities and neighborhood programs. This past year, we granted 10 scholarships to college-bound high school students in the Los Angeles area, with the plans to offer 20 scholarships in both Los Angeles and San Diego during We honored teachers by offering Teacher Grants, First Year Teacher Awards and served as the Platinum Sponsor for the LACOE Teacher of the Year program for over a decade, contributing $400,000 to this initiative over the years. In 2017, we proudly contributed to hundreds of non-profit organizations including Boys to Men Mentoring, the Fleet Week Foundation, the Midway Foundation and more. In addition to our financial contributions, our employees volunteered their time through organized programs, receiving paid time off to encourage social responsibility. As we move into 2018, we continue to look for new ways to bring more benefits to our members. We extend a sincere thank you to our valued members for their continued commitment and look forward to a wonderful year ahead. Steve O Connell President & CEO Walton Greene, PsyD Board Chair Academic Decathlon We continued our sponsorship and staff volunteer participation in the Academic Decathlon with both the Los Angeles Unified School District and the Los Angeles County Office of Education.

4 FINANCIAL STATEMENTS STATEMENTS OF FINANCIAL CONDITION For the Years Ended December 31 (In Thousands) 2017 Assets Cash and cash equivalents $253,194 Investments Securities available for sale, at fair value 328,605 Other 26,304 Loans held for sale 5,357 Loans receivable, net of allowance for loan losses 2,147,551 Accrued interest receivable 8,226 Property and equipment, net of accumulated depreciation 117,932 National Credit Union Share Insurance Fund deposit 22,962 Other assets 121,164 TOTAL ASSETS $3,031,295 Liabilities and Members Equity Liabilities: Members shares $2,517,868 Borrowed funds 140,000 Accrued expenses and other liabilities 70,850 Total liabilities 2,728,718 Members equity, substantially restricted: Regular reserve 16,459 Undivided earnings 325,812 Accumulated other comprehensive loss (39,694) Total members equity 302,577 TOTAL LIABILITIES AND MEMBERS EQUITY $3,031, data unaudited, as presented.

5 STATEMENTS OF INCOME 2017 Interest Income Cash balances $2,289 Loans receivable 82,947 Investments 8,379 Total interest income 93,615 Interest Expense Members shares 6,649 Borrowings 1,467 Total interest expense 8,116 Net Interest Income 85,499 Provision for Loan Losses 5,386 NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 80,113 Non-Interest Income Member fees and service charges 14,831 Service income and other 13,562 Net gain on sale of property (43) Net gain on sale of loans 3,942 Net gain on sale of investments 69 Net real estate rental income 4,355 Total non-interest income 36,716 Non-Interest Expense Compensation and benefits 53,225 Office occupancy 10,124 Other 38,068 Total non-interest expense 101,417 NET INCOME $15,412

REPORTS Supervisory Committee Report Your Supervisory Committee is composed of volunteers elected from the membership.

These responsibilities are accomplished through an annual financial audit performed by Turner, Warren, Hwang and Conrad AC, CPAs, a national CPA firm with recognized expertise in the credit union

If you, as a member-owner, have any concern not resolved to your satisfaction by the credit union staff, you may write us at: Marcia Wade Supervisory Committee Chair Supervisory Committee PO Box

6 REPORTS Supervisory Committee Report Your Supervisory Committee is composed of volunteers elected from the membership. The Committee is charged with representing the members interests and validating the results of operations each year. These responsibilities are accomplished through an annual financial audit performed by Turner, Warren, Hwang and Conrad AC, CPAs, a national CPA firm with recognized expertise in the credit union industry. If you, as a member-owner, have any concern not resolved to your satisfaction by the credit union staff, you may write us at: Marcia Wade Supervisory Committee Chair Supervisory Committee PO Box Glendale, CA Board Financial Officer s Report 2017 concluded another strong year for California Credit Union with net income totaling $15.4 million, return on assets of 0.52%. These results include the impact of merging with North Island Credit Union on March 1, The regulatory net worth ratio is 10.51%. Victor Hanson Treasurer College Scholarship We awarded ten $1,000 scholarships to college-bound students across Los Angeles County through our annual College Scholarship Program. Since 2005, we have awarded more than $285,000 to local students.

OUR MISSION From the California community to educators to entrepreneurs and those who serve our country, California Credit Union puts our members first; through accessibility and convenience, we

7 OUR MISSION From the California community to educators to entrepreneurs and those who serve our country, California Credit Union puts our members first; through accessibility and convenience, we offer the service, security and stability they will always rely on, and the solutions and education they need to secure a stronger financial future. USS Midway We continued our sponsorship of the USS Midway s STEM Education Onboard Fieldtrip Program and No Child Left Ashore Scholarship Fund. These programs provide funding for onboard learning experiences in subjects such as Math, Science, and Social Studies, and also helps to assist with bus transportation to the museum.

8 701 North Brand Boulevard Glendale, CA ccu.com 5898 Copley Drive San Diego, CA northisland.ccu.com

A fresher, better-foryou,smarter. way to bank.

A fresher, better-foryou,smarter way to bank. Annual Report 2017 About Us In 1951, seven Lockheed Georgia employees dreamed of a better way to bank and LGE Community Credit Union was born. Today we serve