2014 ANNUAL REPORT. Here to Help

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1 2014 ANNUAL REPORT Here to Help

2 Here to Help is more than a slogan. My husband and I have had car loans through three other credit unions. But when there was a mishap with the dealer, Mr. Tomasello [at Credit Union of Colorado] took care of us like we have been members since Credit Union of Colorado opened its doors! His kindness was remarkable, and his detail in explaining all of our options was far beyond anything I have dealt with in the past. Yvette D. TRUE MEMBER STORIES

3 BOARD OF DIRECTORS REPORT Dr. Will Fleckenstein, P.E., Chairperson In 2014, the Credit Union of Colorado achieved a significant milestone. It is a milestone worth celebrating. We reached, and then surpassed, the 100,000 member mark. It is both gratifying and humbling to think 100,000 members trust us with their finances. How does it happen that our credit union has grown this large while many other credit unions who were founded at the same time as ours no longer exist? This is a question we ask on a regular basis, with an eye to staying relevant and valuable to members today and in the future. The question is best answered simply; we are Here to Help. We use the phrase Here to Help quite a bit around the credit union. This phrase would be easy to dismiss as an empty promise if we used it solely to capture more business with no intention of honoring this promise. This is not the case. If it were, we probably would not be here today, certainly not at the same level of member satisfaction and participation. So, how did we help our members in 2014? Here are a few of the highlights: We continued to improve lending operations on behalf of members. For example, members can now complete the entire loan process online from application to funding without ever stepping in one of our offices or resorting to snail mail. We relocated our office in Cañon City to a new expanded location to serve the growing needs and membership in Cañon City and Fremont County. We began construction on a new data center and member contact center to help us better meet member demands via e-channels and over the telephone. We made significant progress on creating a new business account portfolio, which we plan to unveil in the first part of We brought mortgage servicing in-house in order to save money and provide a higher level of member service. These improvements put us in a better position to build member value. Yet, the most significant accomplishment in 2014 was that we continued to help our members live better. Throughout this report we have shared member stories, illustrating how we support members every day. I hope you find them as compelling and important as I do. Our credit union takes a step forward every time we help a member. On behalf of the entire board of directors, we pledge to continue to help create success stories for our members. Successes lift individual members, our credit union, and our communities. TREASURER S REPORT Lloyd Wicke, Secretary/Treasurer 2014 marked another year of solid financial performance for the credit union. Membership was at the root of this performance, fueling growth in total assets, loans, and deposits. As important, on the loan side the vast majority of members who borrowed money are paying it back as agreed, a key to strong results. Highlights of 2014 compared to 2013 include: Total assets grew by $81.4 million to more than $1.2 billion, a 7.2% increase. Loans grew 5.2% to $627.3 million. Deposits increased by $72 million to $1.1 billion, up 7.3%. Loan losses as a percent of average total loan portfolio were.36% compared to.51% in NET WORTH Our net worth retained earnings since our beginning is the principal gauge of our credit union s financial strength. It reflects our ability to withstand even the most challenging economic times safeguarding the financial interests of our members and ensuring our ability to operate effectively regardless of the economic environment. Our net worth grew in 2014 to $132.2 million. That compares to $127.2 million in 2013, resulting in an increase of 3.9%. It is worth noting that our net worth as a percentage of assets in 2014 was an outstanding 10.9%. That is much higher than the 7% required to be designated as well capitalized by the National Credit Union Administration (NCUA). This continues to place us in the upper level of all credit unions nationwide. LOOKING AHEAD Going forward, our solid financial performance in 2014 has set the stage for further growth in Our performance boosts our ability to meet the evolving needs and expectations of our members with new and enhanced products and services, while safely guarding the long term financial health of the credit union.

4 CREDIT OFFICER S REPORT Debbe Kirkpatrick, Credit Officer When it comes to credit, our promise is to enthusiastically help our members with their credit needs. Whether it s helping a member buy a car, finance a home purchase, tap into their home equity, or obtain a fairly priced credit card, we are here to assist our members with service that is personal, quick, easy, and economical. To that end, in 2014 we were able to make strides in these areas with the delivery of three new helpful programs. CONVERSION TO IN-HOUSE MORTGAGE SERVICING Until 2014, when we made a mortgage loan to a member, servicing of the loan for example, taking care that real estate tax escrow and homeowner insurance payments are disbursed in a timely fashion was outsourced. We outsourced prior to 2014 because we did not have enough mortgage loan business to service mortgages ourselves. Fortunately, our mortgage portfolio has grown enough to take advantage of the benefits of servicing our own mortgages. The list of the benefits we have gained from this switch include: Faster turnaround time on member inquiries Branches are able to access additional information in our system Members appreciate talking to someone locally, not to someone out of state Reduced cost of mortgage servicing Increased flexibility to address member requests esignatures The ability for members to sign loan documents electronically became available in August To date, we have funded hundreds of loans utilizing esignatures. The benefits of esignatures are many: Members now have the ability to complete their loan funding without the need to visit a branch. Instead members can sign remotely from any computer, smart phone, or tablet. A loan that could have taken days to complete can now be closed in as little as 15 minutes from the time of application. Branches also use this technology to replace the need for mailing documents to members and waiting days for them to return. PREFERRED DEALER NETWORK The Preferred Dealer Network program is a group of auto dealers who have met our rigorous standards for ethical, high-quality member service. They have committed to give our members the best service possible. In 2014, we completed the first full year for the Preferred Dealer program, which was first introduced in In 2014, we had 38 dealers on the preferred dealer list. They were located in cities across the state, giving members the opportunity to shop at participating dealers locally. Many members took advantage of this benefit to the tune of more than $17.4 million in auto loans. While we are pleased about our 2014 innovations, we continued to focus on the fundamental aspects of our mission that is, keeping up with increasing loan processing volume while making prudent, consistent decisions about granting credit. Items of note for 2014 were as follows: As stated in the Treasurer s Report, the loan portfolio expanded by 5.2% to $627.3 million in This includes both consumer and mortgage loans. We funded 16,935 loans in 2014, compared to 17,057 loans in Our delinquent loan ratio increased from.32% at the end of 2013 to.40% at the end of This compares favorably with the.82% delinquency ratio for all credit unions, according to the most recent report of the National Credit Union Administration. We are pleased that we could help our members save time, save money, and enjoy more personal, responsive service, while still taking care of our fundamental priority: maintaining a sound loan portfolio.

5 SUPERVISORY COMMITTEE REPORT Ron Hinton, Chairperson The role of the Supervisory Committee is to monitor our business operations and ensure that policies and procedures are sufficient to protect our members assets. This encompasses making sure our financial reporting requirements are met and regulatory requirements are properly followed. Our committee is pleased to inform you that all regulatory requirements were met in 2014, and there were no significant deficiencies to report. With the support of the Internal Auditing Department and credit union management, we were able to comply with the ever growing number of regulatory changes. We succeeded in making these changes, which will provide further safeguards for our members, protect our assets, and keep us on a careful course of sound financial growth. In pursuing our key mission keeping our members money safe and secure we are assisted by the external accounting firm of Holben Hay Lake Balzer CPAs LLC. This firm aids us by testing our internal audit controls and providing us with an opinion audit concerning our financial statements. This audit ensures that these statements are prepared in keeping with generally accepted accounting principles. The Supervisory Committee appreciates that our role is to help protect our members assets. We look forward to continuing to serve our members in 2015, ever vigilant in looking out for their best interests. TRUE MEMBER STORIES Credit Union of Colorado has our business for life! Thanks to you and your Preferred Dealer Network, I got in contact with my car salesman who was absolutely dynamite to work with, and went far above and beyond to help us buy this car. Now we have our fabulous family car raring to go for winter driving with ease. Julie S.

6 MANAGEMENT REPORT Terry Leis, President/CEO I just love the credit union! You have always taken such good care of me and my husband. Now that he s passed, I am looking at moving out of state to be closer to my family but the credit union will be coming with me! Dorothy M. We passionately serve members. Where other credit unions and financial institutions often measure success by reviewing a financial statement each month, we look first to member feedback. We believe great financial results always follow great member experiences. And, great experiences come from a passion to help. In 2014, we expanded upon an important practice. The practice is to share organization wide how we helped individual members. These member stories, some of which are shared in this report, are posted on our company intranet. While we have always been member-focused, this focus has led to even more enthusiasm and commitment to do what is right for members. As a matter of fact, our annual member survey reported that overall member satisfaction is the highest it has been in a number of years. We take listening to membership very seriously. We know we can better serve members if we regularly listen to what you are telling us, so our list of feedback tools is more than our annual survey. The tools include monthly experience surveys, regular staff feedback, social media posts, and member phone calls. This feedback shapes our future actions. Throughout 2014, we introduced many improvements on behalf of members and their feedback. The enhancements included more convenient access options, improving lending efficiency and service, and workforce development. You can now access us more quickly and more easily, get a loan approved and funded faster, and work with staff who are more adept to serve you. In closing, we passionately serve our members by listening carefully and then acting upon your feedback. We are indeed Here to Help, and can best do so if you tell us how we can improve. We will continue to listen and we will continue to help. TRUE MEMBER STORIES

7 2014 FINANCIAL REPORT CREDIT UNION OF COLORADO STATEMENT OF FINANCIAL CONDITION Assets Loans $627,309,012 $596,573,416 Loans in process $377,761 $20,448 Deferred net loan origination costs $526,541 $794,679 Loans held for sale $204,063 $187,345 Other assets held for sale $133,543 $312,239 Allowance for loan losses ($2,899,209) ($4,168,285) Other real estate owned $22,500 $ Accounts receivable $7,774,594 $8,116,011 Cash $7,346,472 $8,207,560 Investments $528,438,658 $482,959,198 Accrued income $2,621,900 $2,422,425 Land, buildings, furnishings, etc. $14,995,143 $11,593,043 Prepaid and other assets $23,423,683 $21,889,751 Total Assets $1,210,274,661 $1,128,907,830 Liabilities Accounts payable $3,126,861 $2,513,226 Other liabilities $13,720,712 $13,485,015 Deposits Shares $303,559,404 $264,640,632 Certificates $186,712,881 $194,221,336 Holiday accounts $543,363 $523,138 Money Market accounts $296,582,060 $279,652,229 IRAs/HSAs $66,265,435 $66,500,428 Share draft/checking $203,669,982 $179,761,682 Total Liabilities $1,074,180,698 $1,001,297,686 Equity Regular reserves $15,465,739 $15,465,739 Undivided earnings $116,685,900 $111,732,240 Unrealized gains on investments $3,942,324 $412,165 Total Equity $136,093,963 $127,610,144 STATEMENT OF INCOME AND EXPENSES Operating Income Loan interest $24,071,300 $24,041,041 Credit card interest $5,368,947 $4,667,628 Amortized net loan origination costs ($1,305,511) ($1,229,644) Investment income $4,293,237 $3,599,669 Other income $15,207,213 $14,622,201 Total Operating Income $47,635,186 $45,700,895 Operating Expenses Salaries and benefits $20,107,804 $19,094,746 Travel and conference $745,877 $682,266 Data processing $1,746,389 $1,514,601 Office occupancy $3,313,496 $3,177,793 Office operations $3,623,249 $3,334,375 Marketing $1,403,931 $1,489,325 Loan servicing $1,296,105 $1,291,072 Professional/outside services $1,283,244 $1,237,717 Insurance $333,497 $1,106,047 Plastic card and share draft $6,258,785 $5,099,377 Loan origination costs ($860,153) ($1,196,369) Misc. operating expenses $341,896 $335,666 Total Operating Expenses $39,594,120 $37,166,616 Provision for Loan Loss $899,421 $2,703,400 Gain on Disposition of Assets $983,156 $1,603,467 Cost of Funds Dividends Shares $283,314 $245,625 Dividends All other deposits $2,989,708 $3,342,076 Total Cost of Funds $3,273,022 $3,587,701 Provision for Income Taxes ($101,881) $8,201 Total Liabilities and Equity $1,210,274,661 $1,128,907,830 Net Gain From Operations $4,953,660 $3,838,444

8 2014 CREDIT UNION OF COLORADO OFFICIALS BOARD OF DIRECTORS Dr. Will Fleckenstein, P.E., Chairperson JoAnn Vondracek, Vice Chairperson Lloyd Wicke, Secretary/Treasurer Mary Ann Adams, Director Jim Dixon, Ph.D., Director Kimberly Howard, Director Dann Milne, Ph.D., Director Joe Montoya, Director Gerald O Halloran, Director John Van Sciver, Director Russ VanNostrand, Director SUPERVISORY COMMITTEE Ron Hinton, Chairperson Marilyn North, Secretary Jim Raughton, Ph.D.,Member Jeff Romeo, Member Jing Ye, Member SPECIAL THANK YOU We would like to thank all of our valued employees who helped Credit Union of Colorado grow throughout 2014 and who provided excellent member service. LOCATIONS Arvada 8770 Wadsworth Blvd., Unit R, Arvada, CO Aurora E. Quincy Ave., Aurora, CO Bear Valley 3100 S. Sheridan, Unit 1-F, Denver, CO Cañon City 2435 Fremont Dr., Cañon City, CO Central Denver 1390 Logan St., Denver, CO Colorado Springs 3606 Austin Bluffs Pkwy., Colorado Springs, CO Fort Collins 2510 E. Harmony Rd., Fort Collins, CO Golden 1800 Jackson St., Golden, CO Grand Junction 202 Main St., Grand Junction, CO Greeley th Ave., Greeley, CO Lakewood 9140 W. 6th Ave., Lakewood, CO Parker E. Plaza Dr., Parker, CO Pueblo 1721 Hwy. 50 West, Pueblo, CO Southeast Denver 7541 E. Iliff Ave., Denver, CO Thornton 3907 East 120th Ave., Thornton, CO PHONE NUMBERS Denver Metro Northern Colorado Southern Colorado Western Slope Toll Free TDD Website This credit union is federally insured by the National Credit Union Administration.