Keith Reynolds, SVP Lending CEFCU

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1 Keith Reynolds, SVP Lending CEFCU CEFCU - $5.5 Billion in Assets 20 Branches in Central Illinois 4 Branches in Metro San Jose, CA 320,000 Members, 870 Employees

2 Loan Portfolio of $4B, 83% Loan-to-Share Ratio Delinquency.42% Net Charge-offs.30% $1.55B in Consumer Loans

3 CEFCU Will Originate $760M in Consumer Loans Will Risk Price $225M of those loans Principal Objective Achieve sustainable growth based on disciplined underwriting and pricing, consistent with CEFCU s values.

4 Corporate Values Create Constraints No Excessive Dealer Flats No Dealer Mark-ups No Incentive Pay Decentralized Lending

5 Strengths Illinois Market Share/ Name Recognition Established Branch Network Management Continuity (including Branches)

6 Weaknesses Strengths do not translate to California Core System/Legacy Applications not nimble

7 Strategies Impact Market Share

9 Analytics to Validate/Invalidate Strategies

10 From the Federal Reserve Bank of New York From 2001 to 2006, total balances of second lien borrowing grew from under $200 billion to $1.1 trillion.

11 Risk Pricing Strategy High Low

12 Auto Loans 60 Day Delinquency Charge-Offs 12% rate bump between top tier rate and highest risk tier rate

13 PSL s 2011 Delinquent $ Net Charge-offs similar to 710 FICO Auto Loan Yield 200 basis points higher Variable rate

14 Good Decisions Require Good Information

15 July Year-Over-Year Consumer Loan Volume Dropped 15%

16 30.0% CEFCU Market share IL 14 Counties % of Financed Units 25.0% 20.0% 21.7% 21.1% 21.6% 22.7% 21.8% 21.9% 22.6% 22.7% 21.3% 21.6% 21.4% 15.0% 1Q Q Q Q Q Q Q Q Q Q Q 2016

1,446 1,000 500 0 393 288 283 178 224 121 125 159 July

17 2,500 SANGAMON COUNTY Total Financed CEFCU Financed 2,173 2,000 1,500 1,512 1,688 1,736 1,777 1,625 1,905 1,446 1, July 09 July 10 July 11 July 12 July 13 July 14 July 15 July 16

18 Layered Risk (Attribute Analysis)

19 2014 Indirect Loans LTV Avg Loss Comparison (650+ vs <650) Average of Cho Balances Column Labels Row Labels < >120 Grand Total $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $ $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $ $0 $0 $0 $0 $0 $0 $0 $0 $8 $0 $0 $0 $0 $0 $0 $0 $ $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $394 $356 $0 $ $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $ $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $56 $0 $86 $0 $441 $207 $ $0 $0 $0 $0 $0 $0 $0 $2 $0 $0 $0 $0 $0 $214 $672 $0 $ $71 $0 $0 $0 $0 $0 $16 $43 $0 $0 $0 $25 $387 $0 $352 $0 $ $0 $0 $0 $0 $0 $41 $0 $107 $84 $0 $449 $0 $0 $168 $234 $0 $ $0 $0 $0 $53 $0 $146 $96 $118 $155 $71 $168 $124 $324 $134 $291 $193 $152 Grand Total $3 $0 $0 $2 $0 $10 $9 $22 $25 $8 $81 $22 $119 $110 $314 $49 $44 Average of Cho Balances Column Labels Row Labels < >120 Grand Total $0 $0 $0 $0 $288 $38 $0 $34 $279 $415 $348 $689 $396 $164 $855 $293 $ $0 $0 $0 $70 $0 $139 $334 $254 $579 $1,085 $532 $1,107 $717 $851 $1,548 $1,945 $ $242 $477 $207 $0 $0 $303 $1,183 $947 $751 $1,081 $850 $1,506 $1,522 $2,274 $1,496 $1,067 $1, $0 $0 $215 $291 $587 $361 $402 $1,353 $868 $881 $1,574 $1,278 $1,388 $1,141 $3,876 $4,217 $1, $19 $0 $0 $697 $391 $1,760 $313 $583 $1,317 $1,332 $732 $1,267 $895 $1,918 $1,567 $0 $ $28 $0 $56 $843 $1,184 $564 $1,480 $1,045 $1,109 $3,448 $397 $2,822 $0 $2,504 $14,901 $1, $0 $0 $1,592 $834 $528 $1,837 $1,623 $1,652 $1,082 $3,841 $2,525 $2,802 $0 $0 $1, $0 $978 $0 $0 $0 $0 $379 $1,184 $0 $1,312 $0 $0 $0 $ $0 $0 $0 $0 $0 $4,891 $0 $7,307 $1, $2,948 $0 $0 $983 <350 $13 $0 $0 $527 $429 $650 $1,219 $1,047 $1,300 $1,247 $1,045 $370 $0 $0 $3,114 $842 Grand Total $27 $117 $77 $303 $356 $637 $685 $855 $828 $1,034 $835 $1,075 $869 $927 $1,401 $1,437 $832

20 Cost % 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% Auto Loan Portfolio FICO Score Collection Loan Loss

21 ROA on Auto Loans 12/31/2014 6/30/2016 > % 0.60% % 1.48% % 2.86% % 5.65% % 7.76% % 11.42% < % 9.94%

23 What is the Threat? Loan Product Convenience OR Delivery Channel Convenience?

24 From American Banker Banks are among the most unlikable brands with Millennials. 92% of Millennials would choose a bank for digital services. J.D. Power Retail Banking Survey of Millennials found large banks had higher satisfaction ratings than both community banks and credit unions for the first time ever.

25 CEFCU Consumer Lending Direct Volume Today 46% originated through Branches 31% originated through Contact Center 23% originated through Web/Mobile

26 Is it economically sustainable to try to be all things to all people through all channels? What happens in 2020 when today s millennials are 46% of the workforce?

27 Origination Cost per Delivery Channel 3X for Branch vs. Mobile

28 Meet Marcus, Goldman Sach s Online Lender for the Masses Goldman Sachs, which has been rolling out its first foray into banking for the little guy, is going back to its history to name its new big push: an online lender for the masses. Initially, Marcus will offer relatively small consumer loans, a business that Goldman has traditionally avoided. In a separate operation that was introduced in April, Goldman began offering online savings accounts with no minimum under the brand GS Bank. From The New York Times, August 18, 2016

29 Delivery Channel Shift Goal by % Direct Loan Volume in Branches 20% through Contact Center 60% through Mobile

1Q17 Quarterly Supplement

1Q17 Quarterly Supplement April 13, 2017 2017 Wells Fargo & Company. All rights reserved. Table of contents 1Q17 Results Year-over-year results Retail Banking customer activity 1Q17 Highlights Page 2 Balance