43rd Annual MeetingSeptember 8, 2020

Call to OrderWelcomeApproval of 2019 Annual Meeting MinutesVoteChairperson's Report- Ed LandersSupervisory Committee Report- Merritt SchifanoTreasurer's Report- Anoel KellyAdjournment- Ed Landers

*Anoel Kelly - Manager*Robert White - Asst. Manager & Dir. ofOperations*AmyBeth Decker - Dir. of Accounting*Hank Testa - Human Resource SpecialistChristopher Spencer - Coord. ofAccountingMatthew Marrotta - Coord. of SpecialProjectsJoshua McMahon - Marketing AssistantElizabeth Hasbrouck- Coord. of MemberServicesLisa Guardi - Senior MSRPatrick Shepard - MSRAshley Misner - MSRAndrea Parker - MSRDavid Chase - Maintenance Specialist

*Management Team

Edward Landers - ChairNathan Smith - Vice Chair

Samuel Hoskins, P.A. - SecretaryAnoel Kelly - Treasurer/CU Manager

Rose Craine - Dir. at LargeRichard Trimble, M.D. - Dir. at LargeRoger MacMillan, M.D. - Dir. at LargeCharles Ellsworth, M.D. - Dir. at Large

Jean Schifano - Dir. at Large

We are Leatherstocking Credit Union

Agenda

Staff Board of Directors

Merritt Schifano - ChairpersonVeronica PokornyMaureen Murray

SupervisoryCommittee

Chairman's ReportGood afternoon and welcome to the 2020 Leatherstocking Credit Union AnnualMeeting.  The 43rd meeting, your meeting.  I reported last year that 2018 was ourbest year ever.  I am pleased to report that 2019 equaled our best year.  Ourincome for the year was $559,000 which, when added to our resources, gives us afund balance of $6,100,000. Our assets as of December 31, 2019 were $51,034,000.  Our loan growth was up22% which was number one in the state for credit unions in the $50,000,000 to$100,000,000 category.  Our efficiency rating (operating expenses divided by netrevenue) was 65%.  That is, our expenses were 65% of our revenue whichtranslates to a profit margin of 35%. How are we able to do this?  As stated last year, we did this by investing in ourown people. Instead of hiring consultants, our staff did extensive coursework andtraining, which enabled them to do this work in-house, work that otherwise wouldhave been sub-contracted to consultants.  Our staff continues to do additionalcourse work, attend seminars and other educational matters both outside andinside the credit union. This was accomplished under the supervision of Mr. HankTesta, CPA and former Associate Dean Emeritus at Herkimer College and currentHuman Resource Specialist at our credit union. 

We are so fortunate to have Manager Anoel Kelly and Assistant Manager RobWhite leading our team.  I will leave it to Anoel to have the pleasure of introducingour dedicated staff. The Credit Union and its staff were also busy in the community as well.  The CreditUnion again sponsored the East Egg Hunt (over 450 people attending), weawarded 18 scholarships to member high school graduates, and raised funds forother charitable organizations. Anoel will provide more detail of ourparticipation in her report. Also, the Credit Union has undertaken a major expansion of our building, whichshould make members more comfortable and the staff more efficient. 

In conclusion, I would like to thank our Board of Directors for their dedicated workand I ask that they stand when I call their name. 

In addition, I would like to recognize the members of the Supervisory Committee. They literally supervise the counting of money, the counting of votes and theadherence to the rules and regulations of the Credit Union. We have MerrittSchifano, chairperson, and Veronica Pokorny and Maureen Murray to thank.

I would also like to thank our many volunteers who helped us along the way. Butmost of all, I would like to thank you, the members.  This is your credit union. Thank you very much.

Edward P. Landers Jr., Chairperson

Treasurer's ReportGood evening.

Wow! 2020 has been a year we will never forget. The last six months have testedall our resilience along with patience, compassion, and courtesy. We want toextend a big “Thank You” to all our members for being understanding as weworked thru the first couple of months of the pandemic. We also want to send ourgratitude and appreciation for all the Essential and Front-line Workers along withall those working from home and parents who have helped their kids transitionfrom in school learning to home/virtual learning. We not only want to thank youbut ask for your continued understanding and patience as we work thru ourrenovation as we may have to close down our drive thru and lobby to work on orcomplete certain areas. Leatherstocking Credit Union continued to have greatsuccess and growth in 2019. With growth comes change, which, our renovationproject will help improve on our floor plan by adding a few extra offices andimprove your in-person experience. And now I would like introduce staff / teamat Leatherstocking Credit Union.

From the 2019 4th Quarter CU Date Summary Report from the National CreditUnion Administration (NCUA), the New York Credit Union Profile Report for the 4thQuarter 2019 from the New York Credit Union Association (NYCUA): The creditunion system’s net worth ratio was 11.37% in the fourth quarter of 2019, comparedwith 11.30% one year earlier. The number of federally insured credit unionsdeclined to 5236 (3283 federal and 1953 federally insured state-chartered creditunions) in the fourth quarter of 2019 from 5375 in the fourth quarter of 2018. Theyear-over-year decline is consistent with long-running industry consolidationtrends. In NY State there is a total of 328 Credit Unions (as of December 2019)and of that number, our asset category of $50-100 million makes up a total of 39CU’s (down 2 from last year). Our asset category net worth ratio average is 11.5%.

Your credit union donated approximately $21,000.00 in 2019 to local charitiesand community projects/organizations.In November, we did a non-perishable food drive, and thanks to you, ourmembers, we delivered over seven full boxes of food to the Hartwick/Mt.Vision Food Pantry.The Proceeds from 2019’s Holiday Chinese Auction totaling $2,200.00 weredonated. $1,000 was given to Opportunities for Otsego, we designated 2programs to have the monies used for-Client Shelter Needs and their VIPprogram (Violence Intervention Program) and $1,200 to The Regional FoodBank of Northeastern NY for the Back Pack Programs in local Schools. 18 Scholarships totaling $10,000, were awarded to local students. Awardsranged from $400 to $1,000. The award is based on the applicant’s well-roundedness, community and extra-curricular involvement, and a written essaywith the subject “People Helping People.”Highlights from 2019 - We repaired the side driveway going down towards thestream. We were researching companies regarding instant issue on debit andcredit cards (produce cards in-house), but due to our card company Elan beingbought out by Fiserv, we were forced to do a card migration and that planwas put on hold. We hired Contracting Company PW Campbell to help improveon our floor plan of the interior of the building as well as exteriorimprovements in late July. We did hardware and software upgrades to all threeof our ATM’s in October as previous software will not be supported as of June2020.For 2020 - Moved into Phase 2 of our Building Renovation Project in January.COVID-19 made life very interesting starting in March and we began ourBuilding Renovation the first week of July, which is expected to be completedat the end of November 2020.

For the period ending Dec. 31, 2019The total loan portfolio grew in 2019. Total $23,359,609.04 in 2018 to$28,091,667.21 in 2019. Our total Charge Offs for 2019 was $221,437.11 and ourrecoveries were $45,492.51 for a Net Charge off $175,944.60 for the year. Membershares decreased slightly from $45,229,251.82 in 2018 to $44,861,873.92 in 2019. Total assets increased from $50,655,837.74 in 2018 to $51,034,105.85 in 2019. OurNet Worth Ratio was 12.03% as of December 31, 2019 which makes LCU a “well-capitalized credit union”. Net Worth Ratio was 10.64% in 2018. The National CreditUnion Administration sets the “well capitalized” regulatory standard at a minimumof 7%. Net income was $559,510.69 in 2019. The reason for our excellent resultsis due to investment strategy and loan growth this year.

Leatherstocking Credit Union remains a strong credit union.

In closing I want to thank our Board and Supervisory Committee members for theirleadership, guidance, and support and most importantly to our members for theircontinued faith, trust and support of Leatherstocking Credit Union.

Sincerely,Anoel Kelly, Credit Union Manager

Supervisory Committee ReportThe responsibilities of the supervisory committee are to make sure the CreditUnion's financial records are in order and internal controls are in place to protectthe assets of the credit union and its members. I would like to thank my fellowmembers, Veronica Pokorny and Maureen Murray, for their volunteer work withthe Supervisory Committee.  I would also like to commend the Board of Trusteesmembers, and all of the staff for an exceptional year. They deserve yourrecognition and applause.    Thanks,Merritt, Chairperson

2019$27,869,590.71$21,950,708.96$469,796.84$149,565.03

—$91,224.99$40,164.11$56,903.24$458,916.60($52,764.63)

$51,034,105.85

$20,304.03—

$13,803.39$44,861,873.92$618,665.65

$5,519,458.86$51,034,105.85

$1,344,185.51$510,606.31$524,521.67

$2,379,313.49

$768,956.44$21,426.73$14,352.58$79,815.85

$290,578.26$30,479.92$30,517.37$195,322.99$258,969.62

$1450.38$13,649.93$28,721.24

$1,734,241.31$85,561.49$559,510.69

4575$9805.88$6,091.72

ASSETSLoans to Members (net)Cash & InvestmentsLand & Building (net)Furniture & Equipment (net)Leasehold Improvements (net)Prepaid ExpenseAccrued Income on LoansAccrued Income on InvestmentsNational Credit Union Share Insurance FundOther AssetsTotal AssetsLIABILITIES & RESERVESAccounts PayableNotes PayableOther LiabilitiesShare AccountsReservesUnrealized Gain/(Loss) on Investments/PensionAssetsSTATEMENT OF INCOMEInterest on LoansInterest on InvestmentsOther IncomeTotal IncomeDISTRIBUTION OF INCOMECompensation & Employee BenefitsTravel and ConferenceAssociation DuesOffice OccupancyOffice ExpenseAdvertisingLoan ServicingProfessional & Outside ServicesProvision for Loan LossMember/Refer a FriendFederal Operating FeesMisc. Operating ExpensesTotal ExpenseDividends PaidTotal Income DisbursedSTATISTICSTotal MembershipSavings Balance/MembersLoan Balance/Members

Year Ending From 12/31/18 To Year Ending 12/31/19STATEMENT OF FINANCIAL CONDITION

Charter No. 22625

2018$23,219,631.51$26,187,789.14$485,891.18$160,087.65

—$109,366.35$33,590.94$71,663.44

$459,853.76($72,036.23)

$50,655,837.74

$22,639.11—

$12,863.55$45,229,251.82$618,665.65$4,772,417.61

$50,655,837.74

$1,164,015.53$461,791.13

$546,870.80$2,172,677.46

$719,937.64$27,042.96$14,843.82$67,881.07

$272,229.69$17,223.17$32,521.20$165,768.57$163,889.12$555.00

$13,478.30$36,218.36

$1,531,588.90$66,692.08$574,396.48

4502$10,046.48$5,157.63

24 Glen AvenueCooperstown, NY 13326

607-547-5700 | mylcu.org

Legal Charter Name: Leatherstocking Region Federal Credit Union

Federally Insured by NCUA