Chair s Report. Judy Cartmell

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2 Chair s Report During 2016 our 80th year - your credit union continued to be financially strong and committed to improving our member-owners overall financial well-being. We showed our commitment to member-owners with continued exemplary service. In the 2016 Member Survey, 96.1% of our members rated the quality of our service as Satisfactory or Very Satisfactory. That satisfaction was demonstrated through increased participation. Your credit union s total assets grew by 10.3% from $1.7 billion in 2015 to $1.87 billion in Also during 2016, your deposits grew to more than $1.65 billion a 10.25% increase over These valuable deposits enabled us to fund loans made to member-owners. Total loans increased by $240 million, growing from $1.27 billion in 2015 to more than $1.5 billion in December We saw significant gains in credit cards, auto loans, mortgages, and business lending as you chose your credit union to provide you these important loan products. Your credit union processed more than 3.66 million member transactions in branches and through the Call Center. Members increasingly accessed remote financial services in 2016, as well. For example, members deposited more than 231,000 checks through mobile check deposit in We also intensified our efforts to effectively communicate with members and the communities we serve. In 2016, we sent more than 1.6 million member communications, which were opened 81% of the time. Additionally, credit union members and the public at-large are looking to social media both to learn and to obtain customer service. During calendar year 2016, the credit union s Facebook page likes grew by 80.3% over 2015; Twitter followers increased by 73.8%, and LinkedIn followers grew by 37.1%. Because of our unprecedented growth, the credit union hired 118 new employees in 2016; and the employee retention rate was 83.61%, saving members money in onboarding and training expenses. Additionally, we provided 545 employees with 12,306 hours of in-house training, ensuring they have the most up-to-date information and resources to help you. Since we are a not-for-profit cooperative, your Board of Directors approved Earn Your Return dividends for all qualified members in good standing. Members earn returns for consolidating financial relationships with their credit union through Earn Your Return. In 2016, between Community Rewards and Earn Your Return, your credit union distributed more than $10.1 million to you, your fellow member-owners, and the communities we serve in both financial and in-kind support. In addition, through the Community Rewards program, members like you continued to earn cash rewards for themselves and their communities just by signing their Visa Debit Card transactions. We also provided more than $18.6 million in direct benefits to members in the form of better rates and lower fees in 2016, for a total of $190 million in member benefits and returns in the last decade. Students in more than 150 New Mexico schools, colleges, and community organizations are benefiting from your credit union s mission to help students succeed by using an exclusively developed and delivered, Common Core-aligned, Financial Capability curriculum. We conducted more than 500 money management workshops, with more than 10,000 participants; and we conducted more than 45 university student orientations, reaching more than 10,000 students. We presented financial wellness information to more than 50,000 potential members through more than 525 Select Employer Group events. Thanks to your active participation in your credit union, Nusenda is one of the soundest and safest financial institutions in the country. We look forward to serving you, your family, and your communities throughout Respectfully Submitted, Judy Cartmell Chair of the Board

3 President s Report As we wrap up our 80th year of service, I want to start by saying thank you to our more than 170,000 member-owners! It s a tremendous honor for us to provide you all the member benefits you ve come to expect, as well as the exemplary service that you deserve. Your member-owned, not-for-profit cooperative is stronger than ever. We now have 18 branch offices - and more on the way. Because of that strength and stability, we re able to deliver financial products and solutions that work for you, along with solid fiscal performances that ensure steadiness for years to come. And unlike maximizing our own profits like a bank does, we return and reinvest our profits directly to you and our communities. Our sound business practices have enabled us to assist members with all their financial needs throughout Some highlights: 2016 membership increased by 5.9% over The loan growth and deposit growth in 2016 increased 18.9% and 10.2%, respectively, over 2015 s growth rates. Our name change continues to resonate within the communities we serve. For example, four out of five Albuquerqueans say they ve heard of Nusenda Credit Union. And in an effort to strengthen our brand, we launched a member campaign that shared their personal stories and credit union relationships on our website, on social media, in print, and on billboards. Soon, you ll be seeing a campaign showing how your Community Rewards contributions have positively impacted the communities in which we live and work. Many of you visited your new Unser and 98th Street branches in ,535 members met with financial consultants at 98th Street, and 10,814 members did the same at the Unser branch. And more convenient locations are on the way at La Orilla and Coors in Albuquerque and a new, updated branch in Taos. Upgraded Mobile and Internet Banking services provided new functionality, such as member-to-member transfers, expanded alert options, and TouchID for Apple device users. Other notables: The Albuquerque Journal s readership named Nusenda Best Credit Union, as well as one of the Top Workplaces ; the UNM Daily Lobo named us Best Banking Service in its Lo Mejor awards; and the Valencia County News-Bulletin named us Valencia County s Best Financial Institution. Nationally, Nusenda Credit Union was named one of the Top 10 Best Credit Unions to Work For by the Credit Union Journal. In 2017, we re renewing our commitment to be a trusted financial advisor to our members; and to continue to be a strong partner that helps shape our communities into better places to live, work, and play. While we strive for understanding of the rapid changes occurring in our nation and in New Mexico, our members can always depend on these things: Nusenda Credit Union operates under a group of cooperative principles. We put you our members first. We will continually improve what we do and how we do it to better serve your needs so you can take care of the things that matter most to you. And we will continue our mission to perform well, so we can do good by putting money in your pocket and making a real impact in your community. Great things happen when people join together for common goals. It s what we call The Power of WE. Terry Laudick President/CEO

4 Statement of Financial Condition* as of: ASSETS TOTAL LOANS LESS: ALLOWANCE FOR LOAN LOSSES CASH AND CASH EQUIVALENTS TOTAL INVESTMENTS LAND AND BUILDING OTHER FIXED ASSETS OTHER REAL ESTATE OWNED OTHER ASSETS TOTAL ASSETS LIABILITIES TOTAL BORROWINGS TOTAL SHARES AND DEPOSITS ACCOUNTS PAYABLE AND OTHER LIABILITIES EQUITY REGULAR RESERVES AND UNDIVIDED EARNINGS UNREALIZED GAIN/LOSS INVESTMENTS TOTAL LIABILITIES AND EQUITY INCOME (OPERATING): INCOME AND EXPENSE SUMMARY INTEREST ON LOANS (GROSS-BEFORE INTEREST REFUNDS) INCOME FROM INVESTMENTS FEE INCOME OTHER OPERATING INCOME TOTAL GROSS INCOME EXPENSES (OPERATING): EMPLOYEE COMPENSATION AND BENEFITS TRAVEL AND CONFERENCE EXPENSES OFFICE OCCUPANCY EXPENSE OFFICE OPERATIONS EXPENSE EDUCATIONAL AND PROMOTIONAL EXPENSES LOAN SERVICING EXPENSE PROFESSIONAL AND OUTSIDE SERVICES PROVISON FOR LOAN LOSS OPERATING FEES (EXAMINATION AND/OR SUPERVISION FEES) MISCELLANEOUS OPERATING EXPENSES TOTAL OPERATING EXPENSES INCOME (LOSS) FROM OPERATIONS NON-OPERATING GAINS OR LOSSES NET NON-OPERATING GAIN/(LOSS) INCOME (LOSS) BEFORE COST OF FUNDS COST OF FUNDS: INTEREST ON BORROWED MONEY DIVIDENDS ON SHARES NET INCOME BEFORE MEMBER REWARDS LESS: NCUSIF/TCCUSF STABILIZATION EXPENSE EARN YOUR RETURN NET INCOME (LOSS) *UNCONSOLIDATED & UNAUDITED 1,273,470,654 (8,070,762) 52,058, ,323,665 32,746,188 3,355, ,111 44,091,067 1,699,138,391 2,724,921 1,499,502,395 28,015, ,895,882 1,699,138, ,537,978 3,681,267 16,696,488 14,359,002 86,274,735 27,731, ,345 2,603,697 13,122,790 4,577,172 4,119,634 5,164,057 6,806, ,204 1,992,444 66,490,471 19,784, ,755 20,220, ,246 3,714,679 16,167,094-3,700,000 12,467,094 1,513,865,655 (9,623,260) 61,300, ,749,606 29,747,179 7,342,062 22,786 50,264,548 1,873,669,456 1,266,385 1,653,168,143 31,450, ,784,093 1,873,669, ,698,031 3,680,018 18,667,706 15,597,835 98,643,590 30,550, ,746 2,812,165 15,352,829 4,128,944 4,509,011 3,534,491 8,095, ,204 1,716,060 71,104,199 27,539, ,200 27,983, ,430 4,261,570 23,208,591-4,100,000 19,108,591

5 Supervisory Committee Report Your credit union experienced a good year in High-quality service, efficient operations, and competitive products continue to sustain the credit union s financial position. The Supervisory Committee of the credit union is appointed by the Board of Directors and oversees the audit function of the credit union. The internal and external audits performed at the credit union are 100% outsourced for efficiency and to ensure expertise. This arrangement has proven to be beneficial to the credit union. The internal audits are performed by Moss Adams, LLP and the opinion-audit of the financial statement is conducted by OCM & Company, CPAs. These audits verify the continuing efficiency of the operation and adherence to applicable regulations in order to safeguard the credit union s assets. In addition to these audits, the National Credit Union Administration (NCUA), our federal regulatory agency, performed its annual examination of the credit union. The NCUA exam further ensures our continuing compliance with everchanging regulatory requirements. The Supervisory Committee continues to strive to assure members that the credit union s management practices are protecting members assets, as well as complying with laws, regulations, and Board policies and procedures. We welcome your questions or suggestions in order to better serve your interests. Please address these in writing to Nusenda Credit Union, c/o Supervisory Committee, P.O. Box 8530, Albuquerque, NM Respectively, Craig Kallsen, Chair Javier Machuca, Vice Chair Ed Maestas, Secretary Randy Trask, Member John Landis, Board Representative 2016 BOARD OF DIRECTORS Judy Cartmell Ann Brooks Leigh Anne Chavez Chair of the Board Vice Chair Secretary/Treasurer Dick Brown Denise Irion John Landis Director Director Director Ray Renteria Martin Serna Ralph Wallace Director Director Director

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