for Energy Capital Credit Union

Minutes of the 82nd Annual Meeting

The 82nd Annual Meeting of the shareholders of Energy Capital Credit Union (ECCU) was held at 24400 I-45 North, The Woodlands, Texas and began at 12:00 Noon, Thursday, February 25, 2016. R. Dixon introduced Brent Rawson, Chair, who opened and presided over the meeting.

Greg Gessel, Secretary and Treasurer, verified that a quorum was present for the meeting.

A motion to accept the minutes of the February 26, 2015 meeting was made by Karl Strobl and seconded by Deborah De Bram and the motion was unanimously approved.

The Chair’s Report was presented by Brent Rawson. He welcomed everyone to the 82nd Annual Meeting of Energy Capital Credit Union and thanked his fellow Board members for their dedicated service, commitment, and passion and noted that the success of the Credit Union is due in large part because of their efforts. He reported that the Credit Union performed well in fiscal year 2014-2015 and noted the following:

• Membership at Energy Capital Credit Union now stands at 19,234 which is an increase of 534 members over 2014.

• In total, the Credit Union’s 19,234 members have added more than $11,080,265 to their accounts.

• Members and owners of the Credit Union have borrowed more than $68,466,307 adding 4,091 new loans, which represents optimism in the economy and trust in the Credit Union.

• In fiscal year 2014-2015, Energy Capital Credit Union wrote 29 home loans worth more than $6,004,010.

• Favorable interest rates and a strengthening economy motivated many members to buy new and used vehicles. In fiscal year 2014-2015, Energy Capital Credit Union wrote 1,106 auto loans worth more than $34,603,865.

• The delinquency ratio in 2015 was .59%.

B. Rawson noted that Member’s ongoing acceptance and use of the products and services offered by Energy Capital Credit Union means that the Credit Union will remain in a strong financial position that allows the Credit Union to continue meeting member’s financial needs. By exercising sound business and service strategies, the Credit Union can help members navigate life-cycle challenges and weather uncertain economic periods like the recent oil and gas industry turndown. B. Rawson reported that in 2015 alone, the Credit Union opened a new branch location on I-45, successfully transitioned staff and resources from ExxonMobil branch locations and launched a new website. In 2016, the Credit Union will be implementing a core system conversion to be launched in October which will significantly decrease transaction times and improve the overall member experience. As well, the Credit Union will be continuing the Member Referral Program, hosting two community shred days and putting on a Member Appreciation Event.

B. Rawson expressed his confidence in the leadership of the CEO, Randall Dixon, the wisdom and guidance of the board of directors, the commitment of the Credit Union’s dedicated staff, and the support and loyalty of 19,234

members. He noted that he is extremely optimistic about the future because Energy Capital Credit Union is well positioned to face any challenge and seize any opportunity that presents itself in 2016.

The President’s Report was presented by Randall Dixon, CEO/President of ECCU. He noted that it was then and remains to this day, the Credit Union’s unique business model that empowers every single member to have a voice. And that’s “One member, one vote.”

R. Dixon reported that as the Credit Union’s membership grows, so do assets, which is the barometer of how well members are receiving the products and services this Credit Union has to offer. The Credit Union’s current assets are $225 million. Membership at Energy Capital Credit Union increased over 2 percent in 2015 and now stands at 19,234. As loan demand has increased 16% year over year, delinquencies remain low at .59%.

Highlights from 2015 that demonstrate the Credit Union’s dedication to providing products and services that benefit you and your families:• Brand new website• Opening of our Spring Community Branch• Launch of Mobile Check Deposit• Successful transition of our staff from closed

branches R. Dixon reported that Energy Capital Credit Union is a well-capitalized financial institution, with a strong net worth ratio of 8.64% and explained that a net worth position above 7 percent is considered well capitalized by the Credit Union’s regulators.

He noted that the 2015 results illustrate that Energy Capital Credit Union is a strong, sustainable, and efficient financial institution, but is also an integral part of the community. The Credit Union’s commitment to and presence in the community can be seen in some of the activities the Credit Union has taken part in during 2015. In 2015, the Credit Union:• Participated in 39 different community

events, volunteered more than 110 hours, and reached over 155 students thru financial literacy

• Staff and vendors donated $790 to the American Heart Association

• Sponsored The Dolphins little league football team in Cy-Fair Sports Association

• Participated in a Bowling Tournament with the Houston Chapter of Credit Unions benefiting Texas Children’s Hospital which raised $20,000

• Participated in a Health and Wellness Fair with ExxonMobil

R. Dixon noted that the Credit Union also has a highly capable volunteer board of directors that shares an enormous amount of time, knowledge, and expertise in guiding the organization. There’s no doubt about their desire to ensure they remain a highly skilled and educated governing body.

As we continue to grow, we will keep our focus on doing what’s right. Locally, we will continue to provide better services and more convenience for our members. We will seek to help more people in our community get on solid ground through financial education and our charitable activities.

As the Credit Union embarks on the year ahead, Energy Capital Credit Union will continue to:• Grow responsibly, while listening and

responding to member’s needs;• Explore innovative product and service

solutions to enhance member’s financial life, such as improving the member experience with our new core system, seeking out new locations and areas to serve you best and offering community events such as Shred Days to keep member financial information safe and

• Developing staff and the Board so they can confidently and wisely serve Members.

The Report of the Treasurer was presented by Greg Gessel, Board Treasurer. He noted that maintaining a moderate asset growth has been a strategic objective since 2012 and the Credit Union grew by 5.15% in 2015 or more than twice the 2014 growth rate of 1.90%. This growth puts the Credit Union very close to the National Savings Rate of disposable personal income of 5.5%. A moderate asset growth rate helps to grow the Credit Union’s reserve ratio which is a key indicator of economic strength for credit unions. The Credit Union accomplished this objective by increasing our capital by .07% to 8.64%. The Credit Union’s ongoing commitment is to maintain high ratings for our 19,000+ members and steer the Credit Union’s well-being for financial safety and soundness.

G. Gessel reported that as of year-end 2015, Energy Capital hit a new high with over $225 million in assets and over $150 million in loans. This growth increases the percentage of loans to assets by over 6%; a ratio of 67.18%. The Credit Union’s 2020 plan is to build this ratio to 80% to help increase asset yield with better results in loan income than the volatile investment markets of 2015 with yields 2.5% or lower.

During 2015, the Credit Union made loans to members in the amount of $68M, or $6M over 2014. Energy Capital lent out over $10M in mortgage loan products in 2015, supporting our strong commitment to affordable housing rates for our members. Additionally, Energy Capital’s loan growth of 20.20% in 2015 was almost triple the national consumer credit increase of 7%.

The Credit Union’s strategy in 2015 was to maximize loan growth and shrink the investment portfolio to increase the yield on assets for the Credit Union. The Credit Union’s ending balance for investments as of December 2015 totaled $52M. The Credit Union’s second investment strategy was to increase short term investments to make sure the Credit Union was well positioned to manage liquidity needs in 2016 and beyond. With the recent increase in Fed Funds, the Credit Union is seeing better yields on short term investments and higher rates than the previous 3 years.

Energy Capital Credit Union has been serving members for over 80 years and ended 2015 with over 19 thousand members. Deposit accounts continued to grow steadily in 2015. Total deposits increased $11M over 2014 representing growth of 5.67%.

Reserves are the backbone of financial stability and ensure enduring success for financial institutions. Reserves at the end of 2015 were

over $17.9M with an ending capital to asset ratio of 8.64%. Regulatory capital required by NCUA is 7%.

In 2015, the Credit Union’s net income was $1.089 million; a new record for earnings the second year in a row. Provision for loan losses was $427 thousand or a decline of $162 thousand from 2014. This is a good indicator of sound and consistent underwriting. The Credit Union is watching delinquencies carefully in 2016 as the decline in oil prices have led to layoffs in the Houston area and job losses for some of our borrowers.

G. Gessel also reviewed the many independent internal and external audits conducted by the Credit Union’s processes and procedures in 2015. He acknowledged the efforts of the Board of Directors, Management and Staff who keep the Credit Union strong and healthy. He also recognized the support of the members of the Credit Union.

The Nominating Committee Report was presented by Chuck Smith. He explained that the bylaws of Energy Capital Credit Union require that a Board of nine directors be elected from the membership to provide general direction and control of the affairs, funds and records of the Credit Union. The regular term of office for a director is three years with one third of the directorships expiring each year. The bylaws also provide that directors may serve more than one term. The search for director candidates involves the efforts of a nominating committee appointed by the Board as well as a direct appeal to members interested in serving as a director. The direct appeal was included in the quarterly Credit Union newsletter mailed to members last November. The Nominating Committee consisted of Chuck Smith, Cheryl Suter and Karl Strobl.

C. Smith presented Vince Elder, Mark Janda and Brent Rawson as the new 2016 Board candidates to the members and shared each candidate’s professional history along with their personal information.

A motion was made by Geneva Parker to approve the Board officers as presented. The motion was seconded by Laura Tranchita, and was unanimously approved by voice vote.

A Plaque was presented to Board Member, Mike Estep, Ryan Ruppert, and Chuck Smith for their years of service by Brent Rawson, Chairman of the Board. A gavel plaque was presented to Brent Rawson for his years of service as Chairman of the Board by Vince Elder.

At 12:35 p.m. the 82nd Energy Capital Credit Union’s Annual Meeting was adjourned by acclamation.

Vince Elder, Chair

2016REPORT

ANNUAL

different. change.Some things

never

Some things are

Federally Insured by NCUA

Welcome to the 83rd annual meeting of Energy Capital Credit Union. It’s wonderful to see you all here. I can see you care not only about your financial future, but the future of your credit union as well. I’m delighted to speak to you today and humbled by the trust you’ve placed in me and my fellow board members whose leadership, dedication, and passion for credit unions are integral to our success.

As a credit union member, you can take comfort in knowing that, unlike for-profit financial institutions such as banks, your board of directors serves on a volunteer basis and doesn’t profit from that service. Though the credit union needs to make a profit to keep the doors open, we don’t work for shareholders demanding to collect high profits. Our sole interests are in your interests. We are the stakeholders in this credit union, and we all share in its future. Whenever we can, we will distribute profits back to you.

As you can see in the Annual Report, Energy Capital Credit Union performed well in fiscal year 2015-2016. Some of the highlights of that report include: • In total, our 16,619 members have added

more than $1,531, 610 to their savings and checking accounts. When we see people putting money away for the future, we hope our efforts to enhance the financial education of our members has contributed to this increase.

• You, the members and owners of this institution, have borrowed more than $68,893,111, which added more than 2,521 new loans in the 2015-2016 fiscal year and reflects the continued optimism in our economy and trust in your credit union.

• I’m delighted that so many of you are turning to your credit union for your mortgage needs. In fiscal year 2015-2016, Energy Capital Credit Union wrote 11 home loans worth more than $3,853,082.

• Favorable interest rates and a strengthening economy motivated many of you to buy new vehicles. In fiscal year 2015-2016, Energy Capital Credit Union wrote 622 auto loans worth more than $25,323,841.

• The median delinquency ratio is now .86 percent. This means that 99.14% of members make their payments on time. This is also more evidence of a strengthening economy, something for which we can all be grateful.

In addition to establishing policies and ensuring that the credit union adheres to pertinent laws, regulations, and sound business practices, we are also charged with making sure new products and services are developed to assist our members with all of their financial needs. With the continued success of Energy Capital Credit Union, we can offer beneficial savings and wealth-building tools and other financial products and services that enhance your life, improve our delivery channels, and expand our community outreach.

Our highest and most important purpose in serving you includes some of the following objectives: • We want to assist our surrounding

communities where we can make the greatest impact. Helping with financial literacy and the account management for our members who are most vulnerable, such as pre-high school children, young adults, retirees, and our elderly is one way we can do that.

• We want to be our members’ first resource for all things financial in their lives. By trading advice and insights about budgeting, buying, retiring, and saving we can maximize your financial potential.

• We want to continue to offer services that allow for the most efficient and safe use of technology available, placing access and control of your accounts in your hands, wherever you may be.

• We want to grow our community footprint to serve and give back to those who put their trust in us. It is important to us to work with members that face challenges in whatever financial cycle or life phase they might be in; and

• We want to help you finance life activities, such as education, small businesses, and transportation in a responsible way.

In closing, I’d like to express my confidence in the leadership of Randall Dixon, the wisdom and guidance of our esteemed board of directors, the commitment of our dedicated staff, and the support and loyalty of our members. We are extremely proud of the last year and all we have accomplished and optimistic about the future because Energy Capital Credit Union is well positioned to overcome any challenge and seize any opportunity that presents itself in 2017.

Thank you, ladies and gentlemen for your time and attendance today. Thank you for your continued membership with Energy Capital Credit Union and for the trust you put in us. I wish you and your families the very best this year.

Mission Statement As a premier credit union, Energy Capital Credit Union provides professional representatives who offer our members opportunities for financial success through a variety of effective, competitive products and services.

ChairmanVince Elder

Vice ChairmanDon Daniels

Treasurer & SecretaryGreg Gessel

Mark JandaBrent RawsonChris RuisaardBrenda ShortCheryl SuterSteve Wright

Huy Tran

Board of Directors 2016

Advisory Director

Summary of Significant Changes since last Annual Meeting 2/25/2016

Vince Elder, Chairman of the Board

The Chairman’s Report

Determination of Quorum

Approval of 2/25/2016 Minutes

Report of Chairman

Report of President

Report of Treasurer

Report of Annual Audit

Report of Nominating Committee

Election of Directors

Adjournments

Door Prizes (Must be present to win)

Agenda

2016 $ 6,303

6886,9911,798

$ 8,789

6,5431,360

211$ 8,113

126

126

$ 550

2015 $ 5,506

745 6,251 1,603

$ 7,854

6,166427173

$ 6,766

(2)

$ (2)

$ 1,090

ThousandsASSETSLoansCash In BankInvestmentsNational CU Share Insurance FundLandBuilding (net)Other AssetsTOTAL ASSETS

LIABILITIESPayables & Other Misc. LiabilitiesDividends PayableMember Savings, Checking, and Certificate AccountsReservesTOTAL LIABILITIES & EQUITY

2016

165,48914,15336,559

1,8722,3003,8263,544

$ 227,743

419

18206,691

19,615

$ 225,743

2015

150,92011,66552,000

1,8252,3003,0243,738

$ 225,472

380 16

206,159

18,917 $ 225,472

December 31

ThousandsInterest on LoansInterest on InvestmentsTOTAL INTEREST INCOMEFee and Other Income TOTAL INCOME

Operating Expenses Provision for Loan LossesDividendsTOTAL EXPENSES

(Gain)/Loss on Assets

TOTAL NON-OPERATING (GAIN)/LOSS

NET INCOME/(LOSS)

Statements of IncomeFor the year ending December 31

Comparative Financial Statement

2016

2016

2016

2011 2012 2013 2014 2015

2011 2012 2013 2014 2015

2011 2012 2013 2014 2015

MILLIONS

250

200

150

100

50

0

MILLIONS

150

120

180

90

60

30

0

THOUSANDS

20

15

10

5

0

Changes to Management None

Changes to bylaws: Board of Directors may serve up to three (3) consecutive terms of office.

Changes to articles of incorporation None

Important Notes to Changes to Financial Condition None

Changes to membership size: Members Dec 2015 19,234 Members Dec 2016 17,070 Net Member Increase (Decrease) (2,164)

Services offered since last annual meeting (February 2015) None