2017 ANNUAL MEETING. Central Middle School th Street. Tuesday, February 28, :30 p.m.

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1 2017 ANNUAL MEETING Central Middle School th Street Tuesday, February 28, :30 p.m.

2 VISION STATEMENT The community s first choice today and tomorrow MISSION STATEMENT MCT has a passion for our Members financial well-being by responsibly delivering the most innovative products and services in a fun, friendly atmosphere while creating member loyalty.

3 BUSINESS MEETING AGENDA 1. Establish a Quorum 2. Approve 2016 Meeting Minutes 3. Board Chairman Report Randy Brown Introduction of Board Board Chairman Remarks 4. CEO Report Thad Angelle Introduction of Credit Union Staff Employee Service Recognition CEO Remarks 5. Audit Committee Report Mike Guidry 6. Old Business 7. New Business Election of Directors Door Prize Drawings 8. Adjournment

4 MCT CREDIT UNION ANNUAL MEETING MINUTES DATE: TIME: PLACE: DIRECTORS PRESENT: DIRECTORS ABSENT: ADVISORY PRESENT: ADVISORY ABSENT: ALSO PRESENT: February 23, :30 p.m. Port Neches Elementary School Port Neches, Texas Randy Brown, Vice Chairman Jimmy Myers, Secretary/Treasurer Mike Guidry Mike Laird Charles Lankford Randy Chance Trent Devenzio Becky Demeter, Chairman Peggy Delahoussaye Debbie Norris None Thad Angelle, Karen Frederick, Sandra Duvall, Jill Forse, Chad Powell, other employees and many members. I. CALL TO ORDER The Vice Chairman, Randy Brown called the meeting to order at 5:30 p.m. II. II. ESTABLISHMENT OF A QUORUM A quorum was established by Sandra Duvall. ANNUAL MEETING MINUTES Motion: A motion was made by Chad Powell and seconded by Randy Chance to dispense with the reading of the minutes. The motion carried with all in favor. III. IV. REPORT OF THE CHAIRMAN Mr. Brown introduced the Board Members and the Advisory Director. REPORT OF THE PRESIDENT Thad Angelle welcomed everyone to the 62 nd Annual Meeting. He asked for a moment of silence to remember the recent loss of a dear employee, Rhonda Arnold. Mr. Angelle introduced the staff by asking them to stand. Employee Service Awards Chad Powell - 10 years, Sandra Duvall - 10 years and Charise Hilton 20 years

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6 CHAIRMAN REPORT On behalf of the Board of Directors, I would first like to say that it is an honor and privilege to represent the membership of MCT by serving on the Board of Directors. The Board is tasked with the responsibility of maintaining a safe and sound financial institution and I can assure you that this is at the forefront of every decision made. I am proud to report MCT had another outstanding year in The Credit Union once again realized growth in membership, assets, loans, and shares. By continuing to grow each year, the Credit Union is able to offer innovative products and services to our membership. I would like to thank my fellow Board Members, Advisory Board Members, Management and Staff for your tireless dedication to MCT. Last but not least, I would like to thank you, the membership, for your continued support and belief in our Credit Union. Randy Brown Board Chairperson

7 CEO REPORT MCT Credit Union s mission and vision continue to be the catalyst which gives direction and purpose to the Board of Directors, Management Team, and Staff. Thanks to our members continued support and strong usage of our products and services, the Credit Union reported its seventh consecutive year of strong earnings and continued membership growth. Credit Union earnings was a direct result of positive loan demand in Total loans increased from $172MM to $180MM resulting in growth of 4.67% year-over-year. This loan growth was driven by strong new and used vehicle demand, reflecting increases of 15% and 12% respectively. This also equates to $7.8MM in consumer loan growth totaling $81.7MM in Commercial and mortgage lending was generally stagnate in the terms of loan growth for 2016, but mortgage did report strong loan production exceeding $40MM annually. Loan delinquency and losses continue to outperform other credit unions in like asset size reporting year end numbers at 1.09% and 0.36% respectively. Credit Union capital increased from $26.6MM to $27.3MM resulting in a strong capital ratio of 10.47%. Credit Union assets also continued to show solid growth of 3.86% totaling $255MM which was primarily driven by share growth of 3.70%. Finally, the 2016 membership increased to 21,113. In 2016, the Credit Union acquired additional services to ensure the safety and soundness of the debit and credit card programs by introducing the Europay, MasterCard, and Visa, (EMV) chip card technology. This effort should help reduce the growing amounts of fraud, which is a problem throughout the financial services industry. We completed an upgrade of the Credit Union s website which will now provide better user experience and allow Credit Union staff to be more responsive to members needs. The Credit Union also completed the renovation project for the Nederland branch location to have the new look and feel of the Credit Union s image. Finally, we welcomed Keith Fontenot to the Board of Directors as well as Dr. George Scott and Alan Tate to the Advisory Board will be a year of further infrastructure improvements. We plan to update the mobile app to create a better user experience and create online automation for the loan application and new account opening processes. We plan to create outreach programs to improve member product and services education as well as regular member and staff feedback. We will also renovate the Lumberton branch location to the new image of the Credit Union. Every year I end this President s Report with a sincere thank you and appreciation to you the members of MCT Credit Union. But, each year it becomes more apparent the importance you are to the success of the Credit Union and why we do what we do and work to improve your experience year after year. I also thank the Board of Directors for their leadership and continued guidance, support, and direction. The Credit Union is truly blessed to have a committed and passionate Management Team and Staff that understands MCT s mission and vision. I am grateful for our Thank God It s Monday philosophy and look forward to another successful year in Thad J. Angelle Chief Executive Officer

8 BALANCE SHEET Assets 12/31/ /31/2015 Cash $1,761,235 $2,430,153 Personal Loans $81,774,426 $73,951,455 Real Estate Loans $88,493,823 $87,811,939 Business Loans $1,274,041 $1,722,966 Credit Card Loans $8,692,835 $8,703,640 Less Allowance for Loan Loss ($839,153) ($644,811) Land and Building $7,446,718 $7,296,433 Furniture and Fixtures $477,427 $454,397 Investments $57,945,832 $55,791,204 Other Assets $8,379,138 $8,407,102 TOTAL ASSETS $255,406,322 $245,924,478 Liabilities & Equity Accounts Payable $4,659,301 $3,857,633 Interest/Dividend Payable $103,146 $103,346 Other Liabilities $2,034,790 $1,451,022 Shares $96,376,473 $86,023,560 Share Drafts $82,249,521 $82,769,724 Certificates of Deposits $23,142,011 $22,765,976 Money Market Funds $12,536,898 $13,346,146 IRA s $10,991,221 $12,352,960 Other Comprehensive Income ($3,527,876) ($3,389,818) Reserve Fund $3,933,574 $3,933,574 Undivided Earnings $23,488,862 $22,737,478 Accumulated Unrealized Gain (Loss) on available for Sale Securities ($581,599) ($27,124) TOTAL LIABILITIES AND EQUITY $255,406,322 $245,924,478 Statistical Information Number of Members 21,113 20,901 Growth in Membership 1.02% 2.61% Operating Expenses as a 79.96% 77.25% Percent of Total Income Total Loans as a Percent of Assets 70.57% 70.02% Capital (Reserves & Undivided Earnings) 10.47% 10.82% Investments as a Percent of Assets 22.69% 22.69% Growth in Shares and Deposits 3.70% 5.38% Growth in Loans 4.67% 6.82% Growth in Assets 3.86% 4.99%

9 STATEMENT OF INCOME & EXPENSE Interest Income 12/31/ /31/2015 Income from Loans $9,476,834 $9,381,668 Income from Investments $591,248 $529,722 TOTAL INTEREST INCOME $10,068,082 $9,911,390 Interest Expense Dividends on Shares $258,691 $234,055 Interest on Deposits $1,070,171 $1,124,585 Interest on Borrowed Money $0 $51 TOTAL INTEREST EXPENSE $1,328,862 $1,358,691 PROVISION FOR LOAN LOSSES $829,217 $441,000 Non-Interest Income Fee Income $1,793,932 $1,749,118 Other Operating Income Gain(Loss)on Investments Gain(Loss)on Disposition of Fixed Assets Other Non-Operating Income(Expense) $2,677,749 $2,821,487 $11,775 $270 ($18,860) ($16,456) $2,500 $22,000 TOTAL NON-INTEREST INCOME $4,467,096 $4,576,419 Non-Interest Expenses Employee Compensation & $5,775,016 $5,731,634 Benefits Travel and Conference $264,502 $221,815 Office Occupancy $685,894 $687,467 Office Operations $2,501,650 $2,358,276 Promotion and Marketing $764,618 $654,957 Loan Servicing $323,882 $243,384 Professional & Outside $1,220,679 $1,094,522 Servicing Regulatory Fees $29,514 $36,195 Miscellaneous $59,960 $41,893 TOTAL NON- INTEREST EXPENSE $11,625,715 $11,070,144 NET TO UNDIVIDED EARNINGS $751,384 $1,617,974

10 BOARD & ADVISORY DIRECTORS NAME TERM OF OFFICE EXPIRES Charles Board of Lankford Directors Randy Brown, Chairman Rebecca Randy Chance Demeter Mike Rebecca Mike Laird Laird Demeter Trent Devenzio Jimmy Mike Guidry, Myers Secretary/Treasurer Randy Mike Laird, Brown Vice Chairman Charles Lankford Trent Jimmy Trent Devenzio Myers Peggy Delahoussaye Mike Advisory Mike Guidry Directors Keith Fontenot Randy Chance Debbie Norris George Scott Allen Tate Updated 06/07/2016 MANAGEMENT Executive Management Thad Angelle, Chief Executive Officer Mary Fadhli, Executive Vice President Chad Powell, Chief Financial Officer Jill Forse, VP/Human Resources Karen Frederick, Controller Mike McGee, VP/Business Lending Debra Crew, VP/Real Estate Lending Michael Frazier, VP/Information Technology Sandra Duvall, Marketing Director

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