People Helping People

2017 Annual Report2017 Annual Report

P e o p l e H e l p i n g P e o p l e

Paul Paulsen Chairman Board of Directors

James D. Poplin President/CEO

2017 was another very successful year for Austin Telco Federal Credit Union. Members turned to Austin Telco for help financing homes, buying vehicles, and saving for retirement; and we stayed committed by providing our members great loan rates, outstanding financial products, competitive dividends, and exceptional member service.

This past year our assets ended the year at an impressive $1,460,986,894, while loans had significant growth of 28.2% to $927.9 million. Membership grew to 84,630 members. This shows us that members value our competitive rates and outstanding service.

In 2017, we enhanced many of our online products to make them more convenient and easier to use. The Austin Telco app got a completely new look and is now easier to access the many available features and tools offered. The upgraded mobile app includes: loan applications, member to member transfers, access to loan rates and Touch ID login. Online banking also received an enhanced overall appearance with responsive design and access to new account opening.

Austin Telco Retirement and Investment Services transitioned to a new broker/dealer, CUNA Brokerage Services, Inc. (CBSI)*. CBSI, an affiliate of the trusted CUNA Mutual Group,who shares our commitment to helping our members achieve financial success. In partnering with CUNA Brokerage, we will be better positioned to service the evolving financial needs of our membership through the offering of a more comprehensive and integrated range of investment products and services.

The Austin Telco staff is committed to providing exemplary service to our members. We would like to thank management and staff for their dedicated service and making sure that our members are our top priority.

We also want to extend a special thank you to those of you who offer your time and leadership on our Board and Supervisory Committee. Your dedication keeps Austin Telco moving in the right direction, and you are appreciated.

Finally, we would like to thank all of our members for putting their trust in Austin Telco. We are excited about the opportunities that lie ahead in 2018. The strength of Austin Telco comes from the strength and dedication of our almost 85,000 members!

Report from the Board Chairman & President/CEO

Treasurer’s Report

Report from the Treasurer

Report from the Treasurer

Steve Read Treasurer

Treasurer’s Report

Gross Income

Operating & Provision Expense

Net Income

Dividends

Undivided Earnings

Regular Reserves

Allowance for Loan Loss

Total Equity

Total Assets

Member Savings

Number of Loans Outstanding

Loans Outstanding

Delinquent Loans

Number of Members

Number of Checking Accounts

2015 $ 45,604,698

$ 23,771,966

$ 15,586,601

$6,251,147

$ 154,613,348

$ 5,133,801

$ 1,000,302

$ 159,747,150

$ 1,353,081,886

$ 1,195,177,581

25,108

$ 593,896,361

$ 388,682

78,665

46,487

2016 $ 45,892,928

$ 25,419,537

$ 14,317,635

$6,195,769

$ 168,930,983

$ 5,133,801

$ 1,183,516

$ 174,064,784

$ 1,419,321,196

$ 1,245,730,761

28,757

$ 723,538,912

$ 484,892

81,670

49,157

2017 $ 50,518,038

$ 27,937,933

$ 16,889,148

$6,092,608

$ 185,820,131

$ 5,133,801

$ 1,641,186

$ 190,953,932

$ 1,460,986,894

$ 1,270,769,015

35,009

$ 927,899,592

$ 1,863,788

84,630

51,895

2017 was another financially strong year for Austin Telco Federal Credit Union. We continued to grow in assets, loans and number of members. Austin Telco closed the year at $1,460,986,894 in total assets. Loans increased by an incredible 28.2%, increasing our total loan portfolio to $927,899,592. Austin Telco ended 2017 with a total capital increase of 9.70% ending the year with a very strong 13.07% net worth ratio. Our membership grew to 84,630; and we continue to be a leader among credit unions in Texas and nationwide.

As we move forward in 2018, Austin Telco is committed to remaining a financially resilient organization. The Board of Directors and management team at Austin Telco Federal Credit Union thank you for your membership. In the year ahead, we will continue

providing the innovative, competitive, and sound products and services that you have come to expect from your credit union. Without our wonderful membership base, none of this would be possible.

Supervisory Committee

Report from the Supervisory Committee Chairman

Report from the Supervisory Committee Chairman

Supervisory Committee

Lea Luchsinger, Chairman Irene Guerra, Secretary Marsanna Beseda, Member Larry Lantrip, Board Liaison

The Supervisory Committee is appointed by the Board of Directors to monitor and report on the activities of the credit union on behalf of the members. The two main objectives are to ensure the credit union operations are in compliance with the regulations established by the National Credit Union Administration (NCUA) and that that the credit union is protecting and being responsible with our members’ assets.

The committee achieves these objectives through internal monthly audits

Lea Luchsinger performed by Credit Union Resources Inc., and our annual CPA audit performedChairman by the CPA firm of CliftonLarsonAllen, LLP. In addition to audit functions, the

committee also monitors policies and procedures to protect members from fraud and errors, reviews internal controls, meets with auditors and Federal regulators, considers suggestions for improvement to the operation of Austin Telco Federal Credit Union, and responds to any concerns or complaints that members may direct to our committee.

Once again, we maintained a very high rating on this year’s examination by our regulators. Our committee is delighted to report that the financial condition of Austin Telco Federal Credit Union is strong and sound.

The Supervisory Committee would like to extend a special thank you to our management team and staff for your dedicated service to the credit union and special thanks to our loyal members for putting your trust in Austin Telco.

Assets Net Loans to Members $ 928,674,395 Loans Held for Sale $ 161,115 Cash on Hand $ 12,256,056 Investments $ 458,495,892 Land & Building $ 43,557,465 Furniture & Equipment $ 1,275,191 Other Assets $ 16,566,780 Total Assets $ 1,460,986,894

Liabilities & Equity Member Savings $ 1,270,769,015 Liabilities $ 9,629,360 Regular Reserves $ 5,133,801 Undivided Earnings $ 185,820,131 Unrealized G/L (AFS) Securities [$ 7,048,817] Other Comprehensive Income [$ 3,316,596] Total Liabilities & Equity $ 1,460,986,894

Distribution of Income Total Gross Income $ 50,518,038 Operating Expense $ 27,079,561 Gain [Loss] on Sale of Forclosed Assets $ 5,911 Gain [Loss] on Investments $ 395,740 Dividend Expense $ 6,092,608 Provision for Loan Losses $ 858,372 Change to Undivided Earnings $ 16,889,148

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Statement of Financial Condition

2013 - 2017 Asset Growth

Board of Directors

Board of Directors

Paul Paulsen Chairman

Larry Lantrip Vice Chairman SecretaryTreasurer

Joe Bain Membership Officer

David Westlund Security/Safety Officer

Paul Tidrick Board Member

Steve Read Fran Berns

Management

2018 Annual Meeting Agenda

James D. Poplin, President/CEOTony Rawls, SVP, Lending/CLOKaren Smith, SVP, Human Resources & Branch OperationsRobert Hernandez, SVP, Finance/CFOJim Howey, VP, LendingRaye Anne Cawthon, VP, AccountingPamela W. Cotton, VP, Member ServicesChristopher Mraz, VP, Information Technology/CIOKathleen Miller, AVP, Administrative ServicesSandie Peña, AVP, Branch OperationsGeorgia Hayes, AVP, Information TechnologyJeannie Rowell, AVP, LendingKatrina Levenick, AVP, Marketing

InvocationCall Meeting to OrderDetermination of a QuorumReading and approval of 2017 minutesOfficers’ ReportsNew BusinessElection of the Board of DirectorsUnfinished BusinessAdjournment of the Meeting