for Energy Capital Credit Union Minutes of the 81st Annual Meeting Federally Insured by NCUA 2015 82nd Annual Report The 81st Annual Meeting of the shareholders of Energy Capital Credit Union (ECCU) was held at Grace Community Church, 24400 I-45 North, The Woodlands, Texas and began at 12:00 Noon, Thursday, February 26, 2015. R. Dixon introduced Chris Ruisaard, Chair, who opened and presided over the meeting. Chuck Smith, Secretary and Treasurer, verified that a quorum was present for the meeting. A motion to accept the minutes of the February 27, 2014 meeting was made by Karl Strobl and seconded by Stu Johnson and the motion was unanimously approved. The Chair’s Report was presented by Chris Ruisaard. He welcomed everyone to the 81st Annual Meeting of Energy Capital Credit Union and thanked his fellow board members for their dedicated service, commitment, and passion. They have contributed greatly to the success of ECCU. He noted that the Credit Union has performed well in fiscal years 2013-2014 and reported the following: • Membership at Energy Capital Credit Union now stands at 18,700. • The Credit Union’s 18,700 members have added more than $7,014,569 to deposit accounts. • The members and owners of the Credit Union have borrowed more than $62,501,478, adding more than 4,522 new loans. • In fiscal year 2013-2014, Energy Capital Credit Union wrote 41 mortgage and home equity loans, worth more than $7,578,585. • Favorable interest rates and a strengthening economy motivated many of the Credit Union’s Members to buy new vehicles. In calendar year 2013-2014, Energy Capital Credit Union wrote 775 auto loans worth more than $19,373,955. • The median delinquency ratio at Energy Capital Credit Union is now .31%, which means that Members are staying on top of their debt obligations. Ongoing participation at Energy Capital Credit Union means that the Credit Union will remain in a strong financial position to continue meeting Member’s financial needs, offering new products and services as well as new branch locations. This Credit Union will continue to strive to be an asset to the communities it serves. C. Ruisaard noted that by exercising sound business and service strategies, the Credit Union can help Members navigate life-stage challenges, especially in these uncertain economic times. The Credit Union recognizes the true benefits of membership and is continuously planning for a brighter credit union future by learning and changing our processes as well as looking for new and better ways of defining and redefining our success as we grow. He noted that the Credit Union wants to: • Offer more and better resources that allow the Credit Union to focus more attention on members using the most efficient and safe use of technology available; • Target particular segments of the community where the Credit Union can make the greatest impact—for example, helping with financial literacy and account management for members who are most vulnerable, such as pre-high school children, young adults, retirees, and our elderly; • Consider how the Credit Union can responsibly aid and finance life activities, such as education, small businesses, and transportation and health care. • Be a knowledge center for our members’ financial lives by allowing them to trade peer advice and insights about budgeting, buying, retiring, and saving. • Most effectively serve members and strengthen the credit union movement by working through local, regional, national, and even international structures. • Support advocacy efforts because the Credit Union understands the impact legislation has on our ability to serve member’s financial needs. C. Ruisaard reported that in 2014 alone, the Credit Union opened a new branch location on the Spring ExxonMobil Campus and broke ground on the new Spring Community branch, as well as launched Mobile Check Deposit where a member can deposit a check from anywhere as long as they have a mobile device. In 2015, the Credit Union will be opening the new Spring Community branch location in the second quarter and launching a new website. The Member Referral program achieved great results in 2014 and has been extended until the end of 2015. Word of mouth and referrals about the credit union is the best advertising and the Credit Union is thankful to members who are referring the Credit Union to their friends and family. C. Ruisaard expressed confidence in the leadership of Randall Dixon, the guidance of the esteemed board of directors, the commitment of a dedicated staff, and the support and loyalty of the 18,700 members. He assured members that Energy Capital Credit Union is well positioned to face any challenge and seize any opportunity that presents itself in 2015. The President’s Report was presented by Randall Dixon, CEO/President of ECCU. R. Dixon noted that because of member’s trust and involvement, the Credit Union is able to thrive and provide so many important benefits, not only to members but to the community. R. Dixon reported that Energy Capital Credit Union is a well-capitalized financial institution, with a strong capital ratio of 8.51%. The regulatory requirement is 7%. The Credit Union’s 2014 results illustrate that Energy Capital Credit Union is a strong, sustainable, and efficient financial institution. R. Dixon noted that the Credit Union is far more than an institution that offers financial products and services. A few differentiators that make the Credit Union special: • The Credit Union has a real presence in the community. In 2014, the Credit Union: • Took deposits from our youngest members every Friday morning at Hairgrove Elementary through our Bank at School Program • Held 12 Financial Management and Social Security Seminars • Hosted a reality fair with YES Preparatory School with 400-500 8th and 9th grade students • Participated in various ExxonMobil Health Fairs • Staff and vendors donated $2,000 to the American Heart Association. Looking at the year ahead, R. Dixon noted that Energy Capital Credit Union will continue to: • Grow responsibly, while listening and responding to member’s needs; • Work with each of our members to make your money work harder by: • Reducing member’s current debt and fees by consolidating your loans and accounts with Energy Capital Credit Union. • Providing free financial planning to prepare members for major life events such as retirement, college and homeownership. • Provide easy access to member’s finances with tools such as: • Quicken one step update interface • Full e-services suite of products • Expanded branch and shared branch networks • Explore innovative product/service solutions to enhance member’s financial life, such as new branch locations, updated website and identity theft assistance; and • Develop our staff and board so they can confidently serve members. The Report of the Treasurer was presented by Chuck Smith, Board Treasurer. C. Smith noted that maintaining a moderate asset growth was a strategic objective in 2013 and 2014. The Credit Union’s goal was to further grow reserves which are a key indicator of economic strength for credit unions. The Credit Union accomplished this objective by increasing assets by less than 2% and increasing capital by .19% to 8.51%. The ongoing commitment to our members is to maintain high ratings for our 18,000+ members and steer our well-being for financial safety and soundness. C. Smith reported the following results: As of year-end 2014, Energy Capital hit a new high with over $214 million in assets. The Credit Union’s Net Promotor Score was over 70% in 2013 and 2014 which is a high score within the financial industry and members continue to put their savings and trust in Energy Capital Credit Union during this ongoing economic recovery. Over 60% of total assets are invested in the member loan portfolio, an increase of over 18% in loan growth from 2013 and the Credit Union ended 2014 with over $130M in loans outstanding. During 2014, the Credit Union made loans to members in the amount of $62M. Energy Capital lent out almost $7M in mortgage loan products to members in 2014. C. Smith noted that reserves are the backbone of financial stability and ensure enduring success for financial institutions. Reserves at the end of 2014 were over $17.9M with an ending capital to asset ratio of 8.51%. Regulatory capital required by NCUA is 7%. In 2014, the Credit Union’s net income was $1,047 thousand a new record for earnings. NCUA discontinued assessments in 2014, which helped increase net income by over $139 thousand from 2013. The Credit Union’s provision for loan losses was $589,048 or an increase of $69,000 from 2013. Most of the increase was due to the growth of loans outstanding and a slight increase in charged-off loans of .07%. C. Smith assured members that their funds are safe and are being handled in accordance with National Credit Union Administration rules and regulations. C. Smith also reviewed the many independent internal and external audits conducted on the Credit Union’s processes and procedures in 2014. He noted that the Credit Union did not have an exam by the Texas Credit Union Department (“TCUD”) or National Credit Union Administration (“NCUA”) in 2014 but both the TCUD and NCUA conducted their exam in early February 2015. C. Smith acknowledged the efforts of the Board of Directors, management and staff who keep the Credit Union financially 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 October. The Nominating Committee consisted of Chuck Smith, Mike Estep, Doug Rasch and Karl Strobl. C. Smith presented Don Daniels, Chris Ruisaard, and Steve Wright as the new 2015 Board candidates to the members and shared each candidate’s professional history along with their personal information. A motion was made by Roy Lively to approve the Board candidates as presented. The motion was seconded by Karl Strobl, and was unanimously approved by voice vote. C. Ruisaard announced that Chuck Smith and Mark Janda will be Advisory Directors in 2015. A Plaque was presented to Board Members Vince Elder and Chuck Smith for their years of service by Chris Ruisaard, Chairman of the Board. A plaque was presented to Doug Rasch for his service as Advisory Director. A gavel plaque was presented by Chuck Smith to Chris Ruisaard for his years of service as Chairman of the Board. At 12:45 p.m. the 81st Energy Capital Credit Union’s Annual Meeting was adjourned by acclamation.