ANNUALREPORT

2015

Benjamin Moreno Dorothye HarrisonChairman Secretary

Greater teXaS Federal Credit Union

63rd annUal MeetinG MinUteS, FebrUary 19, 2015The 63rd annual meeting of Greater TEXAS Federal Credit Union was held February 19, 2015 at the John H. Winters Complex, 701 West 51st St., Austin, Texas.

The meeting was called to order at 6:00 p.m. by Benjamin Moreno, Chairman of the Board of Directors. Verification that a quorum was present was affirmed by Dorothye Harrison, Secretary.

The Invocation and Pledge of Allegiance were given by E. Wayne Kuykendall. Frankie Fowler sang our National Anthem. Paul Leche was designated as Parliamentarian.

A motion was made by Edith Musgrove and seconded by Joan Huntley to waive the reading of the previous annual meeting minutes. Copies were printed in the 2014 Annual Report. The motion carried.

Chairman Moreno introduced the following board members and supervisory committee chairman: Jane L. Woods, First Vice Chairman; Daniel Kaderka, Second Vice Chairman; Penny V. Rychetsky, Treasurer; Dorothye Harrison, Secretary; Larry Fisher, Member; Charlotte Schneemann, Member; and Wesley Yeager, Supervisory Committee Chairman. Chairman Moreno recognized all former volunteers who were present: Damon Holditch, Reynaldo Morales, Paul Root, Jeffrey Archer, E. Wayne Kuykendall, Robert Rosales and Robert Bordovsky.

Geraldine Boydson, former 27 year employee was mentioned. She was unable to attend due to recent health issues.

The Treasurer’s report was accepted as presented by Penny V. Rychetsky on a motion by Paul Root, seconded by Jeffrey Archer.

Wesley Yeager, Supervisory Committee Chairperson, presented the Supervisory Committee report. He introduced his committee consisting of: Marilyn Eaton, Secretary; Linda Lothringer, Flora Fearon, and Stephen A. Mason, Members. The Supervisory report was accepted as presented on a motion by Robert Bordovsky, seconded by Marilyn Ellison.

Chairman Moreno, presented the Chairman’s Report. He asked members to refer to his written report in the annual report.

There was no unfinished business.

Damon Holditch, Chairman of the Nominating Committee, was introduced by Chairman Moreno. Mr. Holditch introduced the Committee Members, Reynaldo Morales,CPA; and Ken Owens. The following nominations were submitted for a three year term: Penny V. Rychetsky and Wesley Yeager.

The Chairman called for nominations from the floor; hearing none, a motion to elect the nominees by acclamation was made by E. Wayne Kuykendall, seconded by Joan Huntley. The motion carried with no opposition.

President/CEO, Tommy D. Seargeant, was introduced by Chairman Moreno. Mr. Seargeant presented Certificate of Service plaques to the following.

Petra Alicia Esparza from Bingle and Laura Vega from Edinburg received their 5 years of service certificates last week in their local branches. Leonel Salinas from Edinburg and Christina Saucedo from San Marcos received their 10 years of service certificates last week in their local branch. Rosa Maria Campos from Texas Transportation and Josephine Segura from San Marcos received their 15 years of service certificates last week in their local branch.

5 Years – Dustin Davino, Marchelle Featherson, Paul Hernandez, Jill McNabb, Isela Romero10 Years – Theresa C. Alvarado, Suzanne Hayes, Jason Nowak, Suzi M. Sobeck15 Years – Tammy L. Carter, Don Hudgens20 Years – Carolyn S. Muise25 Years – Juanita PaxmanNAFCU Quarter Century Honor Roll – Benjamin Moreno, Juanita Paxman

Mr. Seargeant recognized retired employees present: Patricia A. Aldridge, David Keller, and Joe Gathright. Mr. Seargeant presented Employee of the Quarter for 2014 plaques: Shadon Calip - First Quarter; Jason Nowak - Second Quarter; Jaime Goodman from South West Parkway - Third Quarter, received her award at her local branch; and Courtney Jasso - Fourth Quarter.

Mr. Seargeant then presented outgoing Chairman Moreno a plaque recognizing him for his 26 years of volunteer service to GTFCU. He concluded his remarks by announcing his retirement at the end of 2015. He thanked the current and past board members for a very rewarding 40 year career.

Winners of the door prizes were:

10 - $50 Cash Prizes: Shirley Greathouse, Nora J. Schlueter, Anna Callahan, Dan Anderson, Nora Saldana, Frieda A. Musgrove, Janine Kuykendall, Joe Flores, Dorothy Crawford and Lupie S. Doak.

Other Gift Certificates from vendors: Enterprise Car Sales, $50 Shell gift card – Robert Rosales; Liberty Mutual, $50 Visa gift card – Ruben Hernandez; Experian, Credit Educator Session – Paul Root; Cornerstone Financial Education, $50 Home Depot gift card – Clifford Walker; Paul Strang from GTFCU Investment Center, Tote bag with cap and golf towel – Erin Rosales; Texas Legal, $50 Visa gift card – Bob Compton; TSYS Merchant Services, Nike Backpack – Walter Bagley; OneLogos, $50 Starbucks Gift Card, Connie Brown; and Jerry Meley from Auto Exam, $50 Visa gift card – Dorothy L. Mogonye.

Mr. Seargeant turned the meeting back to Chairman Moreno.

Chairman Moreno announced immediately following adjournment, a cake reception would be held in the prefunction area. There being no further business to discuss, a motion to adjourn the meeting was made by Paul Root, seconded by Rey Morales. The meeting adjourned at 6:50 PM.

2015 annUal report

All graphs represent data as of December 31, 2015

Total Loans Outstanding: $363,879,520

Total Dividends: $764,006

Total Deposits: $513,464,648 Reserves & Undivided Earnings: $44,279,101

Net Income: $3,158,237

Total Assets: $563,416,098

100

150

200

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400

2007 2008 2009 2010 2011 2012 2013 2014 2015

Loan

s in

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10

2007 2008 2009 2010 2011 2012 2013 2014 2015

Div

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2

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4

2007 2008 2009 2010 2011 2012 2013 2014 2015

Net

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me

in M

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Year

100

200

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600

2007 2008 2009 2010 2011 2012 2013 2014 2015

Dep

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s in

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10

15

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35

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2007 2008 2009 2010 2011 2012 2013 2014 2015

In M

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100

200

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400

500

600

2007 2008 2009 2010 2011 2012 2013 2014 2015

Ass

ets

in M

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)

Year

CondenSed ConSolidated

StateMent oF FinanCial Condition

Loans to Members

Allowance for Loan Losses

Cash

Investments

Furniture & Equipment

Land & Building

Other Assets

Total Assets

Accounts Payable and Other Payables

Drafts Payable

Regular Share Accounts

Share Draft Accounts

IRA Accounts

Money Market Security Accounts

Share Certificates

Other Shares

Total Liabilities

Regular Reserve

Undivided Earnings

Total Equity

Total Liabilities and Equity

Net Expenses

Dividends & Interest on Borrowed Money

Addition to Allowance for Loan Losses

Net Income

Gross Income

aSSetS

liabilitieS & eqUity

diStribUtion oF inCoMe

2013

$332,680,576

(777,246)

9,754,135

147,343,362

1,120,298

16,333,320

11,679,439

$518,133,884

2013

$4,362,546

1,257,755

154,842,729

100,709,881

31,955,727

117,197,057

71,289,819

454,347

$482,069,862

4,570,907

31,493,115

$36,064,022

$518,133,884

2013

$16,198,153

80.64%

1,290,962

6.43%

669,903

3.33%

1,939,4021

9.65%

$20,088,217

2014

$343,982,440

(718,159)

7,194,902

158,979,062

1,041,459

16,032,499

12,968,760

$539,480,961

2014

$6,208,898

1,906,973

174,024,451

114,436,486

23,848,534

114,395,452

65,107,293

650,489

$500,578,576

4,570,907

34,331,479

$38,902,385

$539,480,961

2014

$16,364,675

81.46%

910,935

4.53%

347,003

1.73%

2,657,579

13.23%

$20,275,546

1Net income in 2013 reflects a $368,085 expense paid to the NCUA Corporate Stabilization Fund.

2015

$363,879,520

(700,197)

7,832,444

162,964,751

968,677

17,890,239

10,580,664

$563,416,098

2015

$5,905,604

1,599,831

189,863,927

135,642,308

23,320,334

107,768,601

56,078,703

790,775

$520,970,083

4,570,907

37,875,109

$42,446,015

$563,416,098

2015

$17,003,050

84.64%

764,137

3.80%

320,054

1.59%

3,158,237

15.72%

$21,245,478

The Supervisory Committee is composed of five members who are appointed by the Board of Directors. During 2015, the Committee was responsible for several tasks. One task was to satisfy National Credit Union Administration (NCUA) requirements that an annual audit be conducted. NCUA regulations require a credit union with assets of $500 Million or more to have an opinion audit by a public accounting firm. To facilitate the opinion audit, a fiscal year ending date of June 30 was selected by the Board of Directors. The certified public accounting firm of CliftonLarsonAllen LLP was used by the Committee to perform an audit of the Greater TEXAS Federal Credit Union’s (GTFCU) statement of financial condition as of June 30, 2015 and June 30, 2014. Their report expressed an unqualified opinion on the statement of GTFCU’s financial condition. Copies of the complete statement of financial condition and the related footnotes are available upon request.

Closed account verification samples are conducted at the end of each month. Letters are sent to approximately 10% of members who closed accounts during the month in order to confirm the closing of accounts by members and to inquire about the reasons for closing the account. The Committee also conducts random samples for loan verifications. A random sample of new loans is selected each month for review, with letters being mailed to the applicable members requesting confirmation of the accuracy of the loan information. In addition, the Committee along with the Board of Directors continued an internal audit program through our contracted audit firm, RSM US, LLP (formerly McGladrey & Pullen, LLP and McGladrey, LLP). This firm will audit monthly activities including reviews of member and staff loans, and accounting records. The Committee also reviews the internal audit work schedule annually and can redirect the focus, if necessary.

Throughout the calendar year, the Committee analyzed key financial trends and ratios. The following represents ratios on December 31, 2014 and December 31, 2015 with a comparison to peers across the nation. 12-31-14 12-31-15 Peer 9-30-15

Loans/Shares 69.85 70.87 79.40

Loans/Assets 63.63 64.58 67.19

Delinquency Ratio 0.95 0.78 0.68

Return on Average Assets 0.50 0.56 0.82

Net Worth /Assets 7.62 7.86 11.06

As the members’ representatives, we want to ensure that our credit union is providing prompt, courteous and efficient service. We welcome your questions and comments at any time concerning the overall operation of the credit union or your individual account.

Thank you to all of our Committee members for the many hours of work in conducting their duties this past year!

Flora A. FearonChair, Supervisory Committee

report oF the SUperviSory CoMMittee

ChairMan’S reportIt has been an honor to serve as your Chairman this past year. Seeing the service GTFCU staff provides to our members from this perspective adds new meaning to being “Your Financial Partner for Life.” Personally this year has been very challenging as the Chairman, with the unexpected death of Jane Woods, 1st Vice Chairman, and the search for a new President and CEO with the retirement of Tommy Seargeant. The Board realized hiring a new President and CEO was the single most important

decision we would ever make, and it was not taken lightly. At the beginning of 2016, we announced Howard N. Baker as the new President and CEO. Howard brings a wealth of leadership, knowledge and a strong commitment to GTFCU and to the credit union philosophy. The credit union is fortunate to find a candidate with Howard’s experience and talent to lead us into the next chapter. It is important to recognize the many hours of volunteer service that our Board and Committee members provide; without their volunteer service this unique concept called a credit union would not exist. As Chairman, I offer my congratulations and sincere appreciation to all of those who helped make GTFCU the success it is today. Much of that success has been a direct result of the leadership, knowledge and vision Tommy Seargeant has provided over his 40 years of service to GTFCU. Under his guidance this Credit Union has grown from $6 million to over $560 million in assets. He has been a champion for implementing the latest technology and tools to ensure the continued growth we have experienced, and has overseen the expansion from one location to the 18 locations we currently have today. Above all, Tommy has always kept the members and staff his first priority. We wish Tommy all the best as he begins this new chapter in his life! As you know, the nation has been experiencing economic difficulties for several years, operating at historical low interest rates. A recent announcement by the Federal Reserve indicates that the low interest rates will begin to move upward, but that movement will be slow. These low interest rates will continue to negatively impact those who were depending on their savings to help with retirement or everyday living expenses. Borrowers, however, are still able to borrow money for automobiles and homes at historically low rates. Despite the low rate environment, your Credit Union continues to be operated in a safe manner and maintains a strong capital position. Despite a depressed economy, GTFCU has continued to grow as we opened our latest branch in Kyle on June 10, 2015, and the new Tower Point branch in south College Station is scheduled to open this spring. We have plans for continued growth as we further search for suitable new branch locations and additional space for the Main Office. In the area of new products, Apple Pay was recently introduced. In 2016, we will introduce bill pay in our mobile app, offer Android and Samsung Pay and upgrade GTNet, our online banking platform. All of our new product offerings will provide greater convenience to our membership. All indications are that the national economy will take several years to fully recover. The Board of Directors and senior management will continue to ensure that GTFCU remains financially strong and responsive to our member needs. I want to thank my fellow Board members, Supervisory Committee members and our excellent staff for the outstanding service they provide to our members.

Penny V. RychetskyChairman, Board of Directors

Order of Business5:30 P.M. Barbeque Dinner

6:30 P.M. Call to Order: Penny V. Rychetsky, Chairman

Determination of Quorum: Dorothye Harrison, Secretary

Invocation: E. Wayne Kuykendall

Pledge of Allegiance: E. Wayne Kuykendall

National Anthem: Otha McClinton

Treasurer’s Report: Larry Fisher, Treasurer

Supervisory Committee Report: Flora Fearon, Chairman

Chairman’s Report: Penny V. Rychetsky, Chairman

Unfinished Business: Penny V. Rychetsky, Chairman

New Business: Penny V. Rychetsky, Chairman

Nominating Committee Report: Ben Moreno, Chairman

Elections: Penny V. Rychetsky, Chairman

President’s Report/Awards: Howard N. Baker, President/CEO

Former President/CEO Remarks: Tommy D. Seargeant

Door Prizes

Adjournment: Penny V. Rychetsky, Chairman

Retirement Reception for Tommy D. Seargeant

64th annUal MeetinG

Thursday, February 18, 2016

board oF direCtorSCHAIRMAN: Penny V. Rychetsky

FIRST VICE CHAIRPERSON: Daniel KaderkaSECOND VICE CHAIRMAN: Wesley J. Yeager

TREASURER: Larry FisherSECRETARY: Dorothye Harrison

MEMBERS: Marilyn Eaton Veronda L. Durden

SUperviSory CoMMitteeCHAIRMAN: Flora Fearon

SECRETARY: Linda LothringerMEMBERS: Stephen Mason

Norm Godwin

CREDIT UNION ManaGeMentPRESIDENT/CEO: Howard N. Baker

SENIOR VICE PRESIDENT/CLO: Larry Hudson, CCE, SCMSSENIOR VICE PRESIDENT/CFO: Mike Miller, SCMSSENIOR VICE PRESIDENT/COO: Jason Goodman

VICE PRESIDENT OF INFORMATION TECHNOLOGIES: Carolyn Muise VICE PRESIDENT OF HUMAN RESOURCES: Tammy L. Carter, SPHR

VICE PRESIDENT OF MARKETING: Brandy Conway