for Energy Capital Credit Union

Minutes of the 81st Annual Meeting

Federally Insured by NCUA

201582nd Annual Report

The 81st Annual Meeting of the shareholders of Energy Capital Credit Union (ECCU) was held at Grace Community Church, 24400 I-45 North, The Woodlands, Texas and began at 12:00 Noon, Thursday, February 26, 2015. R. Dixon introduced Chris Ruisaard, Chair, who opened and presided over the meeting.

Chuck Smith, Secretary and Treasurer, verified that a quorum was present for the meeting.

A motion to accept the minutes of the February 27, 2014 meeting was made by Karl Strobl and seconded by Stu Johnson and the motion was unanimously approved.

The Chair’s Report was presented by Chris Ruisaard. He welcomed everyone to the 81st Annual Meeting of Energy Capital Credit Union and thanked his fellow board members for their dedicated service, commitment, and passion. They have contributed greatly to the success of ECCU. He noted that the Credit Union has performed well in fiscal years 2013-2014 and reported the following:

• Membership at Energy Capital Credit Union now stands at 18,700.

• The Credit Union’s 18,700 members have added more than $7,014,569 to deposit accounts.

• The members and owners of the Credit Union have borrowed more than $62,501,478, adding more than 4,522 new loans.

• In fiscal year 2013-2014, Energy Capital Credit Union wrote 41 mortgage and home equity loans, worth more than $7,578,585.

• Favorable interest rates and a strengthening economy motivated many of the Credit Union’s Members to buy new vehicles. In calendar year 2013-2014, Energy Capital Credit Union wrote 775 auto loans worth more than $19,373,955.

• The median delinquency ratio at Energy Capital Credit Union is now .31%, which means that Members are staying on top of their debt obligations.

Ongoing participation at Energy Capital Credit Union means that the Credit Union will remain in a strong financial position to continue meeting Member’s financial needs, offering new products and services as well as new branch locations. This Credit Union will continue to strive to be an asset to the communities it serves.

C. Ruisaard noted that by exercising sound business and service strategies, the Credit Union can help Members navigate life-stage challenges, especially in these uncertain economic times. The Credit Union recognizes the true benefits of membership and is continuously planning for a brighter credit union future by learning and changing our processes as well as looking for new and better ways of defining and redefining our success as we grow. He noted that the Credit Union wants to:

• Offer more and better resources that allow the Credit Union to focus more attention on members using the most efficient and safe use of technology available;

• Target particular segments of the community where the Credit Union can make the greatest impact—for example, helping with financial literacy and account management

for members who are most vulnerable, such as pre-high school children, young adults, retirees, and our elderly;

• Consider how the Credit Union can responsibly aid and finance life activities, such as education, small businesses, and transportation and health care.

• Be a knowledge center for our members’ financial lives by allowing them to trade peer advice and insights about budgeting, buying, retiring, and saving.

• Most effectively serve members and strengthen the credit union movement by working through local, regional, national, and even international structures.

• Support advocacy efforts because the Credit Union understands the impact legislation has on our ability to serve member’s financial needs.

C. Ruisaard reported that in 2014 alone, the Credit Union opened a new branch location on the Spring ExxonMobil Campus and broke ground on the new Spring Community branch, as well as launched Mobile Check Deposit where a member can deposit a check from anywhere as long as they have a mobile device.

In 2015, the Credit Union will be opening the new Spring Community branch location in the second quarter and launching a new website. The Member Referral program achieved great results in 2014 and has been extended until the end of 2015. Word of mouth and referrals about the credit union is the best advertising and the Credit Union is thankful to members who are referring the Credit Union to their friends and family.

C. Ruisaard expressed confidence in the leadership of Randall Dixon, the guidance of the esteemed board of directors, the commitment of a dedicated staff, and the support and loyalty of the 18,700 members. He assured members that Energy Capital Credit Union is well positioned to face any challenge and seize any opportunity that presents itself in 2015.

The President’s Report was presented by Randall Dixon, CEO/President of ECCU. R. Dixon noted that because of member’s trust and involvement, the Credit Union is able to thrive and provide so many important benefits, not only to members but to the community.

R. Dixon reported that Energy Capital Credit Union is a well-capitalized financial institution, with a strong capital ratio of 8.51%. The regulatory requirement is 7%. The Credit Union’s 2014 results illustrate that Energy Capital Credit Union is a strong, sustainable, and efficient financial institution.

R. Dixon noted that the Credit Union is far more than an institution that offers financial products and services. A few differentiators that make the Credit Union special:

• The Credit Union has a real presence in the community. In 2014, the Credit Union:

• Took deposits from our youngest members every Friday morning at Hairgrove Elementary through our Bank at School Program

• Held 12 Financial Management and Social Security Seminars

• Hosted a reality fair with YES Preparatory School with 400-500 8th and 9th grade students

• Participated in various ExxonMobil Health Fairs

• Staff and vendors donated $2,000 to the American Heart Association.

Looking at the year ahead, R. Dixon noted that Energy Capital Credit Union will continue to:

• Grow responsibly, while listening and responding to member’s needs;

• Work with each of our members to make your money work harder by:

• Reducing member’s current debt and fees by consolidating your loans and accounts with Energy Capital Credit Union.

• Providing free financial planning to prepare members for major life events such as retirement, college and homeownership.

• Provide easy access to member’s finances with tools such as:

• Quicken one step update interface• Full e-services suite of products• Expanded branch and shared branch

networks• Explore innovative product/service solutions

to enhance member’s financial life, such as new branch locations, updated website and identity theft assistance; and

• Develop our staff and board so they can confidently serve members.

The Report of the Treasurer was presented by Chuck Smith, Board Treasurer.

C. Smith noted that maintaining a moderate asset growth was a strategic objective in 2013 and 2014. The Credit Union’s goal was to further grow reserves which are a key indicator of economic strength for credit unions. The Credit Union accomplished this objective by increasing assets by less than 2% and increasing capital by .19% to 8.51%. The ongoing commitment to our members is to maintain high ratings for our 18,000+ members and steer our well-being for financial safety and soundness. C. Smith reported the following results:

As of year-end 2014, Energy Capital hit a new high with over $214 million in assets. The Credit Union’s Net Promotor Score was over 70% in 2013 and 2014 which is a high score within the financial industry and members continue to put their savings and trust in Energy Capital Credit Union during this ongoing economic recovery.

Over 60% of total assets are invested in the member loan portfolio, an increase of over 18% in loan growth from 2013 and the Credit Union ended 2014 with over $130M in loans outstanding. During 2014, the Credit Union made loans to members in the amount of $62M. Energy Capital lent out almost $7M in mortgage loan products to members in 2014.

C. Smith noted that reserves are the backbone of financial stability and ensure enduring success for financial institutions. Reserves at the end of 2014 were over $17.9M with an ending capital to asset ratio of 8.51%. Regulatory capital required by NCUA is 7%.

In 2014, the Credit Union’s net income was $1,047 thousand a new record for earnings. NCUA discontinued assessments in 2014, which helped increase net income by over $139 thousand from 2013. The Credit Union’s provision for loan losses was $589,048 or an increase of $69,000 from 2013. Most of the increase was due to the growth of loans

outstanding and a slight increase in charged-off loans of .07%. C. Smith assured members that their funds are safe and are being handled in accordance with National Credit Union Administration rules and regulations.

C. Smith also reviewed the many independent internal and external audits conducted on the Credit Union’s processes and procedures in 2014. He noted that the Credit Union did not have an exam by the Texas Credit Union Department (“TCUD”) or National Credit Union Administration (“NCUA”) in 2014 but both the TCUD and NCUA conducted their exam in early February 2015. C. Smith acknowledged the efforts of the Board of Directors, management and staff who keep the Credit Union financially strong and healthy. He also recognized the support of the members of the Credit Union.

The Nominating Committee Report was presented by Chuck Smith. He explained that the bylaws of Energy Capital Credit Union require that a Board of nine directors be elected from the membership to provide general direction and control of the affairs, funds and records of the Credit Union. The regular term of office for a director is three years with one third of the directorships expiring each year. The bylaws also provide that directors may serve more than one term. The search for director candidates involves the efforts of a nominating committee appointed by the Board as well as a direct appeal to members interested in serving as a director. The direct appeal was included in the quarterly Credit Union newsletter mailed to members last October. The Nominating Committee consisted of Chuck Smith, Mike Estep, Doug Rasch and Karl Strobl.

C. Smith presented Don Daniels, Chris Ruisaard, and Steve Wright as the new 2015 Board candidates to the members and shared each candidate’s professional history along with their personal information.

A motion was made by Roy Lively to approve the Board candidates as presented. The motion was seconded by Karl Strobl, and was unanimously approved by voice vote.

C. Ruisaard announced that Chuck Smith and Mark Janda will be Advisory Directors in 2015.

A Plaque was presented to Board Members Vince Elder and Chuck Smith for their years of service by Chris Ruisaard, Chairman of the Board. A plaque was presented to Doug Rasch for his service as Advisory Director. A gavel plaque was presented by Chuck Smith to Chris Ruisaard for his years of service as Chairman of the Board.

At 12:45 p.m. the 81st Energy Capital Credit Union’s Annual Meeting was adjourned by acclamation.

It is with great pleasure and pride that I welcome you to the 82nd annual meeting of Energy Capital Credit Union. I am humbled by the trust you’ve placed in myself and my fellow board members. In fact, I’d like to take this opportunity to thank my fellow board members for their dedicated service, commitment, and passion. Our success is due in large part because of their efforts.

As you can see in the Annual Report, Energy Capital Credit Union performed well in fiscal year 2014-2015. Your ongoing acceptance and use of the products and services offered by Energy Capital Credit Union means that we will remain in a strong financial position that allows us to continue meeting your financial needs.

As not-for-profit cooperatives, credit unions are different than banks. This isn’t news to our valued members who recognize and appreciate how truly different a financial cooperative is. Though we have to make a profit to keep the doors open, we don’t work for shareholders demanding to collect their profits. When we can, we like to distribute our profits back to you, the owners of Energy Capital Credit Union.

By exercising sound business and service strategies, we can help you navigate your life-cycle challenges and weather uncertain economic periods like the recent oil and gas industry turndown we are all experiencing. Since credit unions were created during a time similar to this, it’s nice to see that our movement remains extremely healthy—this, despite the onerous regulatory burdens

placed on credit unions as a result of the detrimental practices of Wall Street and the banking industry.

We are excited about the bright future that lies ahead of us. It’s a future we can all share in, and one that encourages our highest potential and ensures our best purpose in serving you, our members. As a financial cooperative, we understand that we can most effectively serve you and strengthen the credit union movement by working through local, regional, national, and even international organizations. We are very involved in our local chapter of credit unions, as well as The Cornerstone Credit Union League which allows us to benefit from the training, tools, and resources available through our trade association.

We understand the impact of legislation on our ability to serve your financial needs, so we are very supportive of Cornerstone’s advocacy efforts on a state level and Credit Union National Association’s endeavors on a national level.

Unfortunately, tax reform is not yet off the table, and as federal legislators consider tax reform in 2016, we want to reiterate that a federal tax on your credit union is equivalent to a tax on you. Make no mistake; we are up against a massive banking lobby that’s doing its best to convince our lawmakers that the credit union tax exemption puts them at an unfair disadvantage. Because of that, credit unions will need to remain vigilant in their advocacy efforts.

With the continued success of Energy Capital Credit Union, we can offer beneficial savings and wealth-building tools and other financial products and services that enhance your life, improve our delivery channels, and expand our community outreach. In 2015, we opened a new branch location on I-45, right outside this building, successfully transitioned our staff and resources from our ExxonMobil branch locations and launched a new website. 2016 is going to be an even more exciting year. We will be implementing a core system conversion to be launched in October which will significantly decrease transaction times and improve the overall member experience. As well, we will be continuing our Member Referral Program, hosting two community shred days and putting on a Member Appreciation Event.

In closing, I’d like to express my confidence in the leadership of our CEO Randall Dixon, the wisdom and guidance of our esteemed board of directors, the commitment of our dedicated staff, and the support and loyalty of our 19,234 members. We are extremely optimistic about the future because Energy Capital Credit Union is well positioned to face any challenge and seize any opportunity that presents itself in 2016.

On behalf of the entire credit union staff and board of directors, thank you for being a part of the Energy Capital Credit Union family!

Mission Statement As a premier credit union, Energy Capital Credit Union provides professional representatives who offer our members opportunities for financial success through a variety of effective, competitive products and services.

ChairmanBrent Rawson

Vice ChairmanCheryl Suter

Treasurer & SecretaryGreg Gessel

Don DanielsMike EstepMark JandaChris RuisaardBrenda ShortSteve Wright

Vince Elder John Hollie II Chuck Smith

Board of Directors 2015

Advisory Directors

Summary of Significant Changes since last Annual Meeting 2/26/2015

Brent Rawson, Chairman of the Board

The Chairman’s Report

Determination of Quorum

Approval of 2/26/2015 Minutes

Report of Chairman

Report of President

Report of Treasurer

Report of Annual Audit

Report of Nominating Committee

Election of Directors

Adjournments

Door Prizes (Must be present to win)

Agenda

2015 $ 5,506

745 6,251

1,603 $ 7,854

6,166427173

$ 6,766

(2)

$ (2)

$ 1,089

2014 $ 4,943

1,309 6,252 1,338

$ 7,590

5,732589102

$ 6,423

(10)

$ (10)

$ 1,177

ThousandsASSETSLoansCash In BankInvestmentsNational CU Share Insurance FundLandBuilding (net)Other AssetsTOTAL ASSETS

LIABILITIESPayables & Other Misc. LiabilitiesDividends PayableMember Savings, Checking, and Certificate AccountsReservesTOTAL LIABILITIES & EQUITY

2015

150,920 11,665 52,000

1,825 2,300 3,024 3,738

$ 225,472

380

16 206,159

18,917

$ 225,472

2014

129,957 16,610 58,061

1,806 2,300 3,024 2,817

$ 214,445

891

7 195,079

17,562

$ 214,445

December 31

ThousandsInterest on LoansInterest on InvestmentsTOTAL INTEREST INCOMEFee and Other Income TOTAL INCOME

Operating Expenses Provision for Loan LossesDividendsTOTAL EXPENSES

(Gain)/Loss on Assets

TOTAL NON-OPERATING (GAIN)/LOSS

NET INCOME/(LOSS)

Statements of IncomeFor the year ending December 31

Comparative Financial Statement

2015

2015

2015

2010 2011 2012 2013 2014

2010 2011 2012 2013 2014

2010 2011 2012 2013 2014

THOUSANDS

250

200

150

100

50

0

THOUSANDS

150

120

90

60

30

0

THOUSANDS

20

15

10

5

0

Changes to Management Our VP of Member Service, Melissa Hagenbuch accepted a position at another credit union and our VP of Lending, Kanika Boutte was promoted to COO.

Changes to bylaws: Change of Field of Membership - New Location, 24396 I-45 North Freeway, Spring, TX 77386 for members within 10 miles of the branch, Members of Friends of Consumer Freedom, Montgomery County, TX.

Changes to articles of incorporation NoneImportant Notes to Changes to Financial Condition CUSO Investment for Member Home Loan changed from the cost to equity

method of accounting effective 10/31/2015. Earnings through 12/31/2014 were adjusted to reserves as a prior period adjustment for $129k and $52k in earnings were recorded for 2015.

Changes to membership size: Members Dec 2014 18,700 Members Dec 2015 19,234 Net Member Increase (Decrease) 534

Services offered since last annual meeting (February 2015) Indirect Auto Leasing ID Restore provided by EZ Shield Debt Protection