Teachers Credit Union» ANNUAL REPORT Partnering with our communities to achieve their financial success one member at a time.

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1 Teachers Credit Union» ANNUAL REPORT 2017 Partnering with our communities to achieve their financial success one member at a time.

2 Vision Partnering with our communities to achieve their financial success one member at a time. Mission Commitment to listen, understand and explore solutions to help you on your path to achieving financial success.

3 Chairman s Report This is my final Chairman s Report. After serving on Teachers Credit Union s board since 1982, and chairing it for many of those years, I am stepping down and will leave the board at the end of my current term in April During my time on the board, I ve seen our credit union work to earn our members loyalty and support. Our efforts, always focused on better meeting member needs, have resulted in amazing growth. Assets increased from $146 million in 1982 to $3.1 billion at the beginning of During that time, membership increased from 52,646 to nearly 300,000 and we expanded from seven locations to 54. Additionally, we introduced numerous technological changes to meet our members ever-changing preferences in accessing TCU s services. We also added new financial products and offerings as our members needs changed, continually adding newer and broader services. All this growth would not have been possible without TCU s focus on understanding our members needs and earning their loyalty and trust. In my time on TCU s board, I have had the privilege of working with three CEOs Ben Hawkins, Rick Rice and our current CEO, Paul Marsh. All have been a pleasure to work with, and all have kept our members and their well-being at the forefront of their planning and decision making. The significant growth TCU has experienced is certainly a result of this memberfocused leadership. This strong leadership continues with TCU s Board of Directors, which consists of successful business professionals from across the state who are devoted to TCU and our members success. With this sound leadership, I am confident TCU s future will continue to be strong and its growth will exceed what has been accomplished during my tenure. Respectfully, David R. Sage Chairman of the Board

4 President s Report As I reflect on 2017, what comes to mind are both the growth experienced at TCU, and the many advances we achieved. For starters, deposits increased by 5.8%, strengthening our balance sheet. This included growth in commercial deposits and an increase in relationships in our Business Services area. Our deposit growth was rounded out by a 3.8% increase in loan balances and steady increases in our mortgage and commercial lending areas. We also continued to grow memberships and will soon have the pleasure of assisting our 300,000th member with their financial needs. We also enhanced our products and services to better assist our members. This included renovating eight service centers, realigning our operations for better efficiencies, upgrading our online offerings and adding new products and services. We remained focused on making improvements wherever possible to provide the best possible banking experience to our members. TCU continued to make a significant impact in our communities through the giving of our time, talent and treasure. Our team members volunteered extensively, sharing their expertise to make a difference. Financially, TCU and the TCU Foundation gave back more than $750,000 to nonprofit organizations in the communities we are a part of. This past year, we also reinforced what is important to us by developing new vision and mission statements. We focused on our sense of community. After all, that s what led to TCU s founding 86 years ago when a group of teachers pooled their savings to lend to others in need of credit. Our new vision is clear partnering with our communities to achieve their financial success one member at a time. As is our mission a commitment to listen, understand and explore solutions to help our members on their path to achieving financial success. Our vision and mission, of course, are forward-thinking, and are based upon our core values and the ideals we are dedicated to: We Serve. We Commit. We Innovate. We are Accountable to Each Other. We are TCU. Each of us at TCU commits to living these values and being a community partner who people can trust in to find solutions to their financial needs. We do great work and go the extra mile, jumping through hoops when our members depend on it. Thank you for being a part of TCU! I am extremely proud of what we have accomplished and I look forward to a great future! Best regards, Paul A. Marsh President and CEO

5 About TCU Eighty-six years ago, a small group of teachers pooled their savings to lend to others in need of credit. From these humble beginnings, Teachers Credit Union has grown to become Indiana s largest credit union with more than $3 billion in assets and 54 service centers throughout the state of Indiana and southwest Michigan. Today, we have nearly 300,000 members and encourage anyone to apply for membership. TCU helps its members achieve their goals by offering honest advice and personal service, treating them like people, not account numbers. We also don t profit off members we invest in them. Any earnings are returned to members through better rates, lower fees and enhanced products and services. Personal Banking» TCU offers top-of-the-line financial services like checking, savings, loans, mortgages and credit cards, as well as specialized services like trusts and investments, insurance and travel. Business Services» From business checking to merchant services and commercial lending, TCU Business Services is experienced at providing financial solutions for businesses of all sizes. Other benefits of banking with TCU include:» The latest in online and mobile banking» Free access to nearly 400 ATMs in Indiana and reduced fees at nearly 30,000 ATMs nationwide» Access to over 5,600 shared service centers nationwide» Perks like earning cash back for using a TCU debit card or rewards with our Platinum Rewards Credit Card» Outstanding personal service See tcunet.com for membership eligibility. Alliance One ATMs are free only in the state of Indiana. All other Alliance One ATMs are subject to a $2 foreign transaction fee. See TCU Debit Mastercard terms and conditions for details. See TCU Visa Platinum Rewards Credit Card terms and conditions for details. NMLS# TCU Trust Services: Trust services available through MEMBERS Trust Company, Riveredge Drive, Suite 280, Tampa, FL 33637, a Federal Thrift Chartered by the Office of Thrift Supervision. This is for educational purposes only and is not intended to provide legal or tax advice regarding your situation. For legal or tax advice, please consult your attorney and/or accountant. TCU Investment Services: Securities sold, advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor. CBSI is under contract with the financial institution to make securities available to members. Not NCUA/NCUSIF/FDIC insured, May Lose Value, No Financial Institution Guarantee. Not a deposit of any financial institution. TCU Insurance Agency: TCU Insurance Agency, LLC is a subsidiary of TCU. Insurance products are offered through various approved carriers.

6 With more than $3 billion in assets, TCU has grown to become Indiana s largest credit union 54 service centers throughout the state of Indiana and southwest Michigan Serving nearly 300,000 members

7 Highlights Grew total deposits by nearly 6% and loan balances by almost 4% New for 2017» Updated and enhanced eight service centers to better serve our members» Added a TCU Insurance Agency office in Chesterton to expand our presence in northwest Indiana» Upgraded internet banking and added integrated bill pay» Expanded the Touch ID login feature to Android mobile users» Introduced Positive Pay for business members Crossed the $17 million mark in net income for the first time Helped members save $6,492, with Everyday Savings Gave back $3,592, to members via debit rebate Rebated $619, to Platinum Reward Credit Card holders» Enhanced credit card services by adding electronic balance transfers and mobile wallets for Samsung Pay and Android Pay» Restructured internal operations to improve service to members TCU Insurance Agency: TCU Insurance Agency, LLC is a subsidiary of TCU. Insurance products are offered through various approved carriers. TCU Investment Services: Securities sold, advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor. CBSI is under contract with the financial institution to make securities available to members. Not NCUA/NCUSIF/FDIC insured, May Lose Value, No Financial Institution Guarantee. Not a deposit of any financial institution. The CFP certification marks are not affiliated with CUNA Brokerage Services, Inc. TCU Trust Services: Trust services available through MEMBERS Trust Company, Riveredge Drive, Suite 280, Tampa, FL 33637, a Federal Thrift Chartered by the Office of Thrift Supervision. This is for educational purposes only and is not intended to provide legal or tax advice regarding your situation. For legal or tax advice, please consult your attorney and/or accountant. NMLS# See TCU Everyday Savings terms and conditions for details. See TCU Debit Mastercard terms and conditions for details. See TCU Visa Platinum Rewards Credit Card terms and conditions for details. Samsung Pay and the Samsung Pay logo are trademarks of Samsung Electronics Co., Ltd. Android, Android Pay and the Android Logo are trademarks of Google Inc. Android Pay will be available for any NFC-enabled Android device running Android OS 4.4.(KitKat) or higher.

8 Mortgage Achieved major efficiencies resulting in faster mortgage closing times Investment Services Advisors helped manage more than $750 million in assets for TCU members Trust Services More than $97 million in assets under management, a 21% increase from the prior year Insurance Agency Received multiple awards from insurance carriers recognizing our status as a top 10 agency in Indiana and top 240 agency nationwide Business Services Added more than 500 new business accounts and increased commercial deposits by over $50 million Commercial Lending Closed more than $115 million in commercial loans, a 57% increase from 2016 Indirect Lending Continues as Indiana s #1 indirect auto lender

9 Community Involvement 2017 Impact 2017 Highlights» Continued our commitment to education by forging new partnerships with Warsaw Community Schools and School City of Mishawaka while maintaining strong relationships with several other school corporations across the state.» Leading donor of the Indiana Credit Union League s new Indiana Military Veterans Hall of Fame in Indianapolis.» Together, TCU and Team Members contributed more than $116,000 to United Way agencies across our footprint.» Sponsor of community events including Indianapolis Christmas at the Zoo, the Best Week Ever in South Bend, Westfield in Lights, United Way of Southwest Michigan s Christmas in June, Huntington Heritage Days Festival, the Elkhart County 4-H Fair and many more. Time Team Members volunteered thousands of hours to organizations like Habitat for Humanity, the Boys and Girls Club and Special Olympics. Talent Team Members offered their expertise serving on nonprofit boards and in leadership roles with many organizations. We were honored to have Team Members be inducted into the Indiana Credit Union League Hall of Fame, named Forty under 40 recipients by chambers of commerce in South Bend and Fulton County and as a Southwest Michigan Four Flags Chamber of Commerce Ambassador of the Year. Treasure In all, TCU and the TCU Foundation gave back more than $750,000 to nonprofit organizations in the communities we are a part of.

10 Financial Empowerment Teachers Credit Union provided financial education to students at 128 Indiana high schools with the TCU Financial Empowerment Program powered by FoolProof. Through this online financial education program, TCU helped provide quality instruction about valuable financial topics to more than 5,200 students. The TCU Financial Empowerment Program is considered a national model for financial education. This past year, the Credit Union National Association awarded TCU the Desjardins Youth Financial Education Award in recognition of our commitment to financial literacy. TCU Foundation Since 1994, the TCU Foundation has made a positive impact in the communities we serve. In 2017, the TCU Foundation approved more than $215,000 in grants in support of financial literacy, college scholarships, high impact educational programs and member matching initiatives of special interest to our membership grantees included Fernwood Botanical Garden Library & Education Center, South Bend Museum of Art, Union-North United School Corporation, Huntington County Community Learning Center, the Indianapolis Public Library and Kosciusko Literacy Services.

11 Balance Sheet Assets Cash and due from banks... $102,638,772 $87,287,533 Interest-bearing time deposits ,324 2,040,534 Available for sale securities ,592, ,525,029 Loans, net of allowance for loan losses of $17,733,634 and $17,533, ,677,924,539 2,578,449,103 Premises and equipment... 51,915,356 51,837,069 Federal Home Loan Bank stock... 20,287,100 19,767,300 National Credit Union Share Insurance Fund and other deposits... 21,430,607 20,199,426 Alloya membership shares... 2,759,747 2,759,747 Goodwill... 1,653,707 1,831,l I I Intangible assets, net of accumulated amortization of $5,062,987 and $4,626, ,509,168 3,110,021 Other assets... 35,823,066 32,256,472 Total assets... $3,129,887,938 $3,028,063,345 Liabilities Members share accounts... $2,463,2 I7,050 $2,335,410,242 Nonmember share accounts...7,236,000 - Borrowings...369,933, ,364,989 Other liabilities...28,921,091 24,587,128 Total liabilities...2,869,307,287 2,787,362,359 Members Equity Regular reserve...185,796, ,168,398 Undivided earnings...76,875,676 72,862,876 Accumulated other comprehensive loss...(2,091,319) (4,330,288) Total members equity - substantially restricted ,580, ,700,986 Total liabilities and members equity...$3,129,887,938 $3,028,063,345

12 Income Statement Interest Income Loans and leases... $91,502,097 $83,369,980 Investment securities... 4,211,611 4,053,020 Interest-bearing deposits , ,267 Other interest and dividend income , ,202 97,373,092 88,607,469 Interest Expense Share accounts... 14,022,757 14,092,899 Borrowings... 5,755,604 3,991,997 19,778,361 18,084,896 Net Interest Income... 77,594,731 70,522,573 Provision for losses on loans...6,918,042 5,573,607 Net Interest Income After Provision for Losses on Loans...70,676,689 64,948,966 Other Income Service charges and fees on share accounts...30,606,830 29,703,905 Annuity and other commissions...7,841,070 7,763,908 Gain on investments...42, ,759 Gain (loss) on other real estate owned and repossessions...53,477 (324,119) Gain on sale of portfolio loans...445,157 - Other income... 2,111,114 2,454,270 41,099,774 40,042,723 Other Expenses Salaries and employee benefits... 48,881,970 43,089,855 Net occupancy expenses... 6,675,481 6,481,983 Equipment and data processing expenses... 13,426,472 13,393,512 Printing and office supplies... 2,392,269 2,381,294 Marketing and public relations... 3,775,656 3,143,095 Loan expenses and fees... 2,338,494 2,967,563 Plastic card processing... 5,087,104 4,933,700 Professional outside services... 2,088,766 1,709,328 Other expenses... 9,652,105 10,770,735 94,318,317 88,871,065 Net Income...$17,458,146 $16,120,624

13 Statement of Cash Flows Operating Activities Net income... $17,458,146 $16,120,624 Items not requiring (providing) cash Provision for loan losses... 6,918,042 5,573,607 Loss on disposition of goodwill ,404 - Investment securities amortization, net... 2,981,299 2,792,052 Net loan origination cost accretion, net... (2,473,149) (2,117,168) Gain on sale of investments... (42,126) (444,759) Gain on sale of portfolio loans... (445,157) - (Gain) loss on other real estate owned and repossessions... (53,477) 324,119 Depreciation... 5,646,046 5,742,818 Amortization of intangible assets , ,934 Change in Interest receivable , ,040 Interest payable and other liabilities... 3,631,901 3,935,580 Prepaid expense and other assets... (1,443,352) (1,988,829) Net cash provided by operating activities... 33,208,794 30,826,018 Investing Activities Net change in interest-bearing time deposits... 1,687,210 2,573,615 Purchase of FHLB stock... (519,800) (699,100) Purchase of securities available for sale... (45,868,522) (73,513,799) Proceeds from maturities and paydowns of securities available for sale... 34,699,778 30,259,521 Proceeds from sales of securities available for sale... 27,401,017 28,641,032 Proceeds from sales of real estate owned and repossessions... 7,647,844 10,523,995 Proceeds from sales of portfolio loans... 48,580,324 - Net change in loans... (158,709,187) (192,343,173) Purchases of premises and equipment... (6,104,533) (6,367,647) Other receivable for related party...- (9,446,352) Increase in NCUSIF and other deposits...(1,231,18l) (1,077,518) Cash paid for purchase of Constellation Digital Partners, LLC Class A Units... (3,000,000) - Cash paid for purchase of insurance agency... (234,020) - Net cash used in investing activities... (95,651,070) (211,449,426) Financing Activities Net change in Certificates of deposit and individual retirement accounts... (19,386,380) (2,239,155) Other share accounts ,193, ,926,l30 Net change in nonmember share accounts... 7,236,000 - Proceeds from borrowings... 55,000,000 15,000,000 Repayment of borrowings... (57,431,843) (22,019,208) Net change in short-term borrowings... (55,000,000) 45,000,000 Membership fees received , ,270 Net cash provided by financing activities... 77,793, ,845,037 Net Change in Cash and Cash Equivalents... 15,351,239 (30,778,371) Cash and Cash Equivalents, Beginning of Year... 87,287, ,065,904 Cash and Cash Equivalents, End of Year... $102,638,772 $87,287,533 Additional Cash Flows and Supplementary Information Interest paid... $19,658,182 $18,048,835 Transfer of loans to other real estate owned and repossessions... 6,653,691 6,302,604 Transfer of premises and equipment to other assets , ,008 Deferred payment for purchase of insurance agency ,062 -

14 Consolidated Statements of Members Equity Years ended December 31, 2017 and 2016 Regular Reserve Undivided Earnings Accumulated Other Comprehensive Loss Balances, January 1, 2016 $159,602,609 $69,130,771 $(524,520) $228,208,860 Total Net income 16,120,624 16,120,624 Other comprehensive loss (3,805,768) (3,805,768) Regulatory transfers, net 12,388,519 (12,388,519) Membership fees received 177, ,270 Balances, December 31, ,168,398 72,862,876 (4,330,288) 240,700,986 Net income 17,458,146 17,458,146 Other comprehensive income 2,238,969 2,238,969 Regulatory transfers, net 13,445,346 (13,445,346) Membership fees received 182, ,550 Balances, December 31, 2017 $185,796,294 $76,875,676 $(2,091,319) $260,580,651

15 Leadership Board of Directors DAVID R. SAGE Chairman VINCENT HENDERSON Vice Chairman SHIRLEY GOLICHOWSKI Secretary PAUL A. MARSH Treasurer JIM DUBOIS Board Member WILLIAM HOJNACKI Board Member THEA KELLY Board Member DIANE MAAS Board Member JOHN MYERS Board Member ROGER THORNTON Board Member Executive Management PAUL A. MARSH President & Chief Executive Officer DAWN LARA Senior Vice President & Chief Operations Administration Officer NICOLE ALCORN Senior Vice President & Chief Member Experience Officer DAN ROUSSEVE Senior Vice President & Chief Information Officer LOUISE ARSENAULT Senior Vice President, General Counsel & Chief Compliance Officer TODD BROWN Senior Vice President & Chief Financial Officer CHAD DOUGLASS Senior Vice President & Chief Lending Officer

16 Supervisory Committee DAVID ARANOWSKI Chairman DERRICK TORAN Committee Member KEVIN SCOTT Committee Member TRACY WEBER Committee Member Supervisory Committee Report The TCU Supervisory Committee is responsible for independently assessing the soundness of the credit union s operations and financial status. Internal controls and policies are evaluated by the supervisory committee through discussions with internal and external auditors and reviews of audit and regulatory examination reports. The certified public accounting firm of BKD, LLP was retained to perform a comprehensive year-end audit of the credit union s financial statements. BKD s 2017 audit was conducted according to generally accepted auditing standards and resulted in an unmodified clean opinion for the 2017 financial statements. A portion of the audited financial statements are included in this report and a full copy is available upon request. Based upon the results of all audits and examinations performed during 2017, it is the opinion of the supervisory committee that TCU is in good financial condition. We can assure the membership that management s policies and practices are sound and effective.

17 Your savings federally insured to at least $250,000 and backed by the full faith and credit of the United States Government National Credit Union Administration, a U.S. Government Agency Visit tcunet.com to learn more about TCU s products, services and locations. NCUA

18 Teachers Credit Union» ANNUAL REPORT 2017