Annual Report 2014

ReviewYear in

Agenda Call to order 6:30 p.m.

Welcome & Introduction of Guests

Approval of Minutes

Nominating Committee Report

Chairman’s Report

Treasurer’s Report

Supervisory Committee Report

CEO’s Report

Unfinished Business

New Business

Election Report

Adjournment of Business Meeting

Door Prize Drawings

Closing

CEO’s ReportThe impact of A+ Federal Credit Union. This can be measured in so many ways — the $4.5 million in dividends we paid to members; the $390 million in loans we funded to provide members cars, homes, supplies in their classroom, or to start a new business; the 360 jobs we provide; and the numerous community efforts we support and participate in. It can also be measured in smaller ways — when proud new parents came to us for a loan to adopt a child from a faraway land or when a newlywed couple qualified for a first-time homebuyers rate on their mortgage or a class of 20 elementary children learning about savings. Sometimes it is a smile to greet you or a wish for a nice day.

We realize it is the little things as well as the big things that impact our community and the relationships we create along the way that keep you coming to A+. We will be with you every step as you continue to support A+ through your participation, by choosing A+ first for your financial needs, and referring your friends and family to your Credit Union.

Thank you,KERRY A.S. PARKER, CPACEO

2 0 1 4 H i g h l i g h t sLook what we accomplished together!

Giving back to the communities we serve is an important part of our culture and our mission.We especially focus on programs that foster financial education.

— Kerry A.S. Parker, CEO

Cash Back Checking 6,703,919 nickels given back to

members in 2014 — that's $335,195.95!

Austin American-Statesman named A+FCU one of Austin's Top Workplaces for 2014

Finalist for the Greater Austin Business Awards Cook-Walden Community Relations Award

Excellence in Financial Literacy Education (EIFLE) Award for Children's Education Program of the Year

(Planning and Money Management) Winner – Youth Financial Camps

CUNA Diamond Awards Winner Complete Campaign – Life is Crazy Enough Social Media – Holidays Are Crazy Enough

Financial Education – Boy Scout Merit Badge Financial Education – Youth Financial Camps

PlusPoints value

$1,231,225 saved by members through the PlusPoints loyalty program

Over $200,000 donated to help ISDs,

colleges, and community organizations in 2014

Small Business Loans80 new small business loans totaling $14,631,181

$5,148 given back to high schools through the custom debit card program

5000+ shared branches across the nation available for members

40 members bought their first home with a First Time Homebuyer Loan

Austin Oak Hill RotaryFour Points Chamber of Commerce

Bastrop Food PantryRotary Club of Bastrop CountyBastrop Education Foundation

Bastrop Chamber of CommerceYMCA Bastrop Board

Cedar Park Chamber of CommerceCedar Park Lions Club

Leander Chamber of CommerceLaces for Leander

Leadership LeanderLeander ISD Educational Excellence Foundation

Pflugerville Chamber of Commerce

Pflugerville Education FoundationSan Marcos Chamber of Commerce

San Marcos Chamber Advanced Networking GroupSan Marcos Education Foundation

Kyle Chamber of CommerceBuda Lions Club

Buda Chamber of CommerceBuda Library

City of Buda Tourism DepartmentHays CISD Education Foundation

Onion Creek Senior CenterRotary Club of Bee Cave

Bee Cave Police Department Benevolent FoundationBee Cave Library

Lake Travis Chamber of CommerceLake Travis Education Foundation

City of HuttoHutto Education Foundation

YMCA Southwest BoardRound Rock Chamber of Commerce

Greater Austin Chamber of CommerceYMCA of Austin

Boy Scouts of America Capitol Area Council BoardAustin ISD Back to School Bash Planning Committee

Austin Community CollegeGeorgetown Chamber of Commerce

Georgetown Area Junior Forum, Hospitality Committee

Employee Involvement In the Community

Over $3,500 given to local charities or families during the holidays

>116 3rd-8th graders attended the Youth Financial Camp

> 39 high school students attended the High School Financial Boot Camp

> Helped 93 scouts receive their Personal Management Merit Badge

> 35 paid high school internships in 2014

> 45 elementary schools participating in Green Apple Deposit Days

> Partnered with local elementary schools to run a MicroSociety Program

Programs funded include: literacy learning lab, nutrition and cooking, college readiness, music in play, circuitry in engineering, and integrating technology to foster and develop mathematics, reading, and science as well as assistive technology to conquer dyslexia

A+ Education Foundation Grant Program81 Winners, $72,000 in grant money

Scholarships 21 Austin Area high school & college students

received $1,000 scholarships

Volunteer hoursOver 7000 employee hours to help ISDs, colleges, and community organizations

Over 250 adults attended free financial education workshops

Over 1300 youth attended financial education events

Over 1160 people used online financial

education

Just under 1700 kids participated in the A+FCU-sponsored Spike’s Junior Sluggers Kids Club with the Round Rock Express

NEW!NEW!What's New?

Pflugerville Branch Grand Re-Opening • RRHS Branch Opening

Apple Pay • Mobile Deposit

New Employee Groups addedCorvalent • Huntington Learning Center • Killeen ISD • Lake Travis ISD The Austin Can Academy • Hawaiian Falls • American Federation of

State, County, and Municipal Employees • Chick-fil-A (Bastrop)

With you every step.For the past 65 years, A+FCU has embodied the

credit union motto of "People Helping People."

Our employees continue to exemplify this philosophy through ongoing community leadership, financial

education, and charitable support.

February 12, 2014 • 6:30 p.m. • A+FCU Main Office

The 65th Annual Membership Meeting of the A+ Federal Credit Union was held on February 12, 2014 at the main office, 6420 Hwy. 290 E, Austin, Texas. Board Members present were Joe Thedford, Lester Lindig, Sadie Smallwood, David Torres, Georgia Johnson, Lolly Guerra and Terry Lord. Members of Senior Management present were Kerry Parker, Dennis Loftis, Sharon Gaugler, Rob Tomasino, Stan Cowan and Rick Holley.

Call to Order Chairman Joe Thedford called the meeting to order at 6:30 p.m.

Welcome & Introductions Mr. Thedford thanked everyone for attending the Annual Meeting and introduced the guests at the Head Table: Lester Lindig, Vice Chairman; Georgia Johnson, Treasurer; Terry Lord, Secretary; Sadie Smallwood, Supervisory Committee Chair; David Torres, Director; Lolly Guerra, Director; Kerry Parker, CEO; and Olivia Hailson, Recording Secretary. These Board Members volunteer approximately 200 hours a year to give back to the community, Mr. Thedford stated his appreciation for their hard work, commitment, and is honored to be Chairman of this Organization.

Introductions of Distinguished Guests Mr. Thedford recognized employees from the Investment Services Department, and A+ Trust Services and recognized former Board Members, Marian Richards and Frank Partée.

Approval of Minutes Chairman Thedford requested a motion to approve the minutes from the 64th Annual Meeting. Karen Flournoy made a motion to approve the minutes and Dorothy Gold seconded the motion. The motion carried by a unanimous vote of the Membership.

65th Annual Membership

Meeting Minutes

part of A+ and encouraged the membership to read the ALM Committee Report in the brochure that was distributed.

Supervisory Committee Report Sadie Smallwood, Chair of the Supervisory Committee thanked the membership for attending the meeting. Ms. Smallwood stated the Supervisory Committee meets once a month with the Internal Audit Department and monitors the Credit Union’s day-to-day operations. At this time Ms. Smallwood introduced the Supervisory Committee: Dr. Gloria Williams, Mark Rogers, Robert Hernandez, and Landon Spillmann. This Committee works very closely with Rick Holley, VP of Internal Audit. The Committee is responsible for hiring the external auditing firm that audits A+ once a year. Dean Rohne, partner from Clifton Larson Allen was introduced and the membership was told if there were any questions concerning the audit he was in attendance. Ms. Smallwood encouraged the membership to read the Supervisory Committee report in the brochure.

CEO’s Report Joe Thedford stated the CEO has been with the Credit Union for 14 years and A+ is fortunate to have her and the Executive Team. The Board has great confidence in Kerry Parker and she continues to do a great job for the membership. Ms. Parker has managed the Credit Union through this tremendous time of growth. Kerry Parker thanked the membership for attending the meeting. The Credit Union has reached the 100,000 member mark and one billion dollars. To celebrate A+ gave away iPads, grocery money, and one $10,000 winner who is a long-time member and her mother is a teacher and a long-time member. Other organizations are recognizing A+ as a billion dollar credit union as the foot print is extended throughout the community. There were a couple of tough projects and the Credit Union heard from the membership loud and clear. Change is hard and the staff is working diligently to address the challenges. A+ is planning and setting up for the next 65 years. Going back 65 years ago there were educators sitting around a picnic table at Zilker Park, the Dow Jones hit 200 that year, the cost of a stamp was three cents, it was a much simpler time, loan decisions took a week for $100 dollars. The Credit Union has come a long way. One thing that has not changed is the foundation; A+ is strong to support education throughout central Texas, financial education, creating rewards programs and innovative products for the membership. At this time Ms. Parker thanked Stan Cowan, VP of Marketing and his team for arranging the business meeting. Ms. Parker

Nominating Committee Report Lester Lindig, Vice Chair introduced Karen Flournoy Chairman of the Nominating Committee. Karen Flournoy stated when asking the two nominees why they wanted to serve, both nominees stated they wanted to give back to their community. It is the recommendation of the Committee to nominate Georgia Johnson and David Torres. Joe Thedford stated Ms. Johnson and Mr. Torres will be reinstated for another three year term. It was reported there was another applicant who could not attend the interview process. This applicant will resubmit next year.

Election No election was required.

Chairman’s Report Joe Thedford stated the Organization is in fine financial shape. The Credit Union has been challenged because of the margin squeeze, but this is not unique to A+ it is the sign of the times. In the mists of this economic climate A+ still continues to reward the membership. PlusPoints is one of the many ways the Credit Union pays the membership for their loyalty. Over $1 million in Plus Points have been awarded to members. The membership was rewarded with $300,000 in prizes throughout the year, 100 iPads were awarded to members under the age of 19. The credit union industry is reporting that branching is out, but A+ Members want to live in a five mile radius of a branch. Due to this fact, A+ now has 17 branches with a couple on the drawing board and the Pflugerville Branch is being renovated. The South Branch will soon start the renovation process. The Credit Union did have its challenges with new software and new applications for online banking. With the growing membership the call center has struggled to keep up with the demand. The Credit Union is working to eliminate issues related to these items. The fastest area of growth is home mortgage and A+ is proud to provide this service to the members. The Staff and Board will continue to strive to give you better service and hope that the membership will continue to let A+ help your dreams come true.

Treasurer’s Report Georgia Johnson thanked the membership for attending the meeting. Ms. Johnson stated she is also the ALM Committee Chair and introduced the members of the ALM Committee: Lester Lindig, Vice Chair; Kerry Parker, CEO; Dennis Loftis, Executive VP, Sharon Gaugler, CLO of Lending. The Credit Union is now a billion dollar credit union. The founding teachers 65 years ago had no idea A+ would grow to a billion dollars and over 110,000 members. Ms. Johnson thanked the members for being a

introduced the Executive Team and thanked them for a job well done, Dennis Loftis, EVP CFO; Rob Tomasino, VP of Operations; Sharon Gaugler, Chief Lending Officer; Stan Cowan, VP of Marketing; OJ Gilder, VP of Technology. Ms. Parker reported A+ has a lot in store for the membership over the next couple of years.

Unfinished Business None

New Business There was a question from Member Betty Blomquist concerning the procedure to transfer interest income from a CD to an outside account. At this time Ms. Blomquist explained her situation. Kerry Parker stated this was the first she had heard of this issue and reported if Ms. Blomquist would get with Rob Tomasino, VP of Operations, he would assist the Member and provide her with information concerning this type of transaction and her options.

Frank Partée asked for the NCUA assessment status. Kerry Parker gave history concerning the NCUA assessment. As time has gone on this amount has decreased and the last payment was approximately $717,000. There was a question concerning how long this was going to continue. It was reported originally it was going until 2021, but now it appears that in the next couple of years the Credit Union may not have to pay anything and might get some of the funds back. Mr. Partée asked what the return on assets were and it was reported .82 compared to last year .86. The Credit Union is in very good standing.

There was a question concerning having the ballgame and free hot dogs. It was stated there will be some member initiatives in 2014 to celebrate A+’s 65th birthday. There was a question concerning if the Credit Union would sponsor any more trips for the members with the Golden Apple. It was reported this initiative was too costly with not enough participation so it was discontinued.

Adjournment Chairman Joe Thedford adjourned the Annual Business Meeting at 7:19 p.m. At this time the drawing for the door prizes was held.

Joe Thedford, ChairmanTerry Lord, Secretary

Statement of Financial ConditionAssets Loans ......................................................$ 779,585,477 $ 673,321,685 (Allowance for Loan Losses) ................$ (3,772,562) $ (2,607,748) Cash........................................................$ 10,200,740 $ 8,755,195 Investments ............................................$ 243,839,405 $ 300,123,696 Land & Building .....................................$ 45,587,835 $ 37,799,501 Furniture & Equipment ..........................$ 3,521,885 $ 3,392,178 Share Insurance Deposit ......................$ 9,516,845 $ 8,965,310 Other Assets ...........................................$ 40,365,496 $ 32,712,036Total Assets .................................................$ 1,128,845,121 $ 1,062,461,853

Liabilities Accounts Payable ................................$ 2,620,099 $ 2,035,228 Other Liabilities ......................................$ 7,836,781 $ 6,580,423 Notes Payable .......................................$ $Total Liabilities ............................................$ 10,456,880 $ 8,615,651

Equity Member Deposits ..................................$ 1,015,218,267 $ 963,111,829 Reserve & Undivided Earnings .............$ 103,169,975 $ 90,734,373Total Equity .................................................$ 1,118,388,242 $ 1,053,846,202

Total Liabilities & Equity $ 1,128,845,121 $ 1,062,461,853

December 31, 2014 December 31, 2013

Profit and Loss StatementIncome Loans ......................................................$ 35,388,880 $ 32,497,140 Investments ............................................$ 3,248,832 $ 2,895,365 Other Income ........................................$ 16,366,949 $ 14,869,760Total Income ..............................................$ 55,004,660 $ 50,262,265

Expense Dividends ...............................................$ 4,547,922 $ 4,935,345 Operations .............................................$ 40,525,322 $ 36,148,504 Total Expenses ......................................$ 45,073,244 $ 41,083,849

Net Operating Income ..............................$ 9,931,416 $ 9,178,416 NCUA Assessment .................................$ $ 717,225

Net Income $ 9,931,416 $ 8,461,191

December 31, 2014 December 31, 2013

*Statement of Financial Condition and Profit and Loss Statement are unaudited

Dividends to Members 8.27%Net Income Reinvested 18.07%Loan Loss Provision 7.55%Investment In Operations 66.11%

2014 Income Distribution

2010 $817,128,161 2011 $905,730,036 2012 $985,691,590 2013 $1,062,461,853 2014 $1,128,845,121

Total Assets

2014 Loan Distribution

Loans Outstanding $779,585,477Loans Funded 85,012

VehicleMortgage

Chairman’s ReportThe 65th year of operation for A+ FCU was completed in 2014. It was a “Three Pete” year for our organization. Again last year, and for several years in a row, A+ has increased in net deposit growth, net membership growth, and net loan growth. Our nearly 120,000 members, our 360 employees, our 7 Board members and 4 Supervisory Committee volunteers all contributed to a great 65th Anniversary year of providing excellent financial services to Austin and surrounding communities.

The PlusPoints Loyalty Program again returned over $1,200,000 to the members in 2014. The debit card rewards program paid the members in excess of $330,000 in 2014. I’m glad to announce that an additional membership reward program will begin soon.

The number and quality of our 18 branches continues to be a priority of the Board and management. The renovation of the Pflugerville Branch and the opening of our fourth high school branch in Round Rock ISD were completed in 2014. Our newest branch location is near the intersection of Hwy 620 and Hwy 2222 and is scheduled to open in early 2015. The South Branch, located on Stassney Lane, has a major renovation underway and should be completed in a couple of months.

The Board works very effectively to oversee the operations of the organization and to assist management in strategic planning. Each Board member counts it a privilege to

Supervisory Committee ReportThe Supervisory Committee is appointed by the Board of Directors and is responsible for monitoring daily Credit Union operations. The committee works closely with the Internal Audit Department. The Committee’s members are Mark Goulet, Andrew McBride, Landon Spillmann, Gloria Williams and Sadie Smallwood. The Internal Audit Department performs audits of various operating areas within the Credit Union. This ongoing effort ensures that the Board approved policies are being adhered to, internal controls are properly functioning to protect member assets, and generating ideas to improve operating efficiency. The Internal Audit Department works hand-in-hand with the Supervisory Committee in various areas throughout the year, including the annual audit and the handling of member complaints and concerns.

The Supervisory Committee is responsible for selecting the external auditor as well as verifying member accounts. CliftonLarsonAllen, the external CPA firm selected by the Supervisory Committee, conducted an independent audit. The results of the audit concluded that the financial statements reported fairly the financial position of A+FCU and the result of its operations and cash flows for the year ending June 30, 2014. This committee responds to complaints from members when he/she feels that the A+FCU management or staff has not resolved their situation. If you have a concern, please mail it to the committee at the Supervisory Committee’s mailbox. The

mailing address is Supervisory Committee, P. O. Box 15102, Austin, TX 78761.

The Supervisory Committee appreciates the confidence and trust you have placed in this committee, and we are confident that our efforts will continue to protect you, the member, in addition in benefiting the overall operations with A+FCU.

Thank you, Sadie SmallwoodChairman, Supervisory Committee

Here's to a

bright 2015!

represent the membership. The years of double digit organizational growth will someday end. One of our greatest challenges is to continue to reposition this organization to flourish in the new financial environment that is to come.

Sincerely,Joe Thedford, Ph.D.Chairman of the Board

Treasurer’s ReportAs Treasurer of A+ Federal Credit Union representing your Board of Directors and staff, I am proud to report the financial results of your Credit Union this past year. You will find this information in the Annual Report. Despite challenges with the national economy in 2014, we continued to show growth in deposits of $52.1 million bringing our total shares to $1,015,218,267. We also had a net increase of 8,657 members growing our membership total to 119,446. Due to the strength of our Credit Union and the hard working management team and staff, we had strong growth in total assets. We will face even more challenges in 2015 and will continue offering high quality services for our membership. Any changes or additions to the services our Credit Union provides will, as always, consider the financial needs of our members first.

Thank you,Georgia L. JohnsonTreasurer

BOARD OF DIRECTORSMr. Joe Thedford, Ph.D. (Chairman)Ms. Adelaida “Lolly” Guerra, Ed.D. (Vice Chairman)Ms. Georgia L. Johnson (Treasurer)Ms. Terry L. Lord (Secretary)Mr. Lester L. LindigMs. Sadie SmallwoodMr. David U. Torres

OFFICERSMs. Kerry A.S. Parker, CPA (Chief Executive Officer)Mr. Dennis Loftis, CPA (Executive Vice President, Chief Financial Officer)Ms. Sharon Gaugler (Chief Lending Officer)Mr. Rob Tomasino (Vice President of Operations)

SUPERVISORY COMMITTEEMs. Sadie Smallwood (Chairman)Mr. Landon SpillmanMs. Gloria L. Williams, Ed.D.Mr. Mark GouletMr. David McBride

AUSTIN - MAIN6420 US Hwy 290 E

AUSTIN - NORTH/18313087 Research Blvd

AUSTIN - SOUTH1402 W Stassney Ln

AUSTIN - SOUTHWEST6114 William Cannon Dr W

BASTROP731 W Hwy 71

BEE CAVE3600 RR 620 South, Ste D

BUDA15295 IH 35, Bldg A

CEDAR PARK1604 E Whitestone Blvd

CONNALLY HIGH SCHOOL13212 North Lamar Blvd

GEORGETOWN804 South I-35

HENDRICKSON HIGH SCHOOL19201 Colorado Sand Drive

HUTTO141 Ed Schmidt Blvd

LEANDER11255 Old Hwy 2243

PFLUGERVILLE15108 FM 1825

ROUND ROCK1000 South Mays St

ROUND ROCK HIGH SCHOOL201 Deep Wood Drive Bldg 1200

SAN MARCOS1204 Thorpe Ln

SAN MARCOS HIGH SCHOOL2601 Rattler Rd, Ste 100

TRAILS AT 6208300 North FM 620

Branch Locations

800.252.8148 • aplusfcu.org With you every step. Federally insured by NCUA