ANNUALREPORT2017

USAgencies Credit Union’s Mission is to Provide Solutions to Improve Each Member’s Financial Life. Our efforts over the last year, and our focus as we head into the future, show that we are more committed than ever to living this Mission every day.

WHERE WE’VE BEEN 2017 was a year of controlled growth for the Credit Union. The overall asset growth for the year was 2.5%, while loans grew by almost 3% and capital grew 4.75% above last year’s numbers. A 7% capital level is required by National Credit Union Administration (NCUA) to be considered a “Well Capitalized” credit union; with our year-end capital ratio at 10.05%, we are well above the required level, and considered a very healthy credit union.

In 2017 we refreshed our online education platforms to include two new programs: QuickStudy and GreenPath Financial Wellness. QuickStudy allows members to take short interactive online courses to educate themselves on various financial topics. GreenPath, a non-profit financial wellness and credit counseling organization, connects our members with personalized financial coaching and many online self-paced tools.

In September we added 24/7 Lending Center services. Members can now get quick, easy loan approvals by calling the credit union anytime.

We also are happy to report that in May of 2017 we successfully updated some of our systems to a more secure environment, ensuring a higher level of security for all member accounts. This transition was done on time and with minimal member impact.

WHERE WE’RE HEADED We are very excited for what’s coming our way in 2018.

We refreshed our Refer-a-Member program at the start of 2018, allowing members who refer friends, family and co-workers the chance to earn $25 for every referral. We know the largest source of our growth is word of mouth from our current members, and we hope this additional incentive reminds our biggest advocates (YOU!) to share us with friends, family members, neighbors and co-workers.

We are investing in technology to upgrade our Online and Mobile Banking, as well as rolling out a new website to better serve all of our members.

And, of course, in all that we do moving forward, the safety and soundness of USAgencies continues to be the number one priority of your Board of Directors.

Thank you for being a member and for your continued support of USAgencies Credit Union.

Jeff Griese - Board Chair Jim Lumpkin - President/CEO

REPORT TO OUR MEMBERS

CREDIT MANAGER REPORT As Credit Manager, I am happy to report that the Credit Union continues to serve all segments of our membership with their lending needs.

I conduct regular reviews of our lending practices to ensure we continually operate within established lending policies and programs and that we adhere to all state and federal lending regulations. I also serve on our Loan Committee which reviews all loan requests that were not approved by individual loan officers. In addition, I perform quarterly reviews of individual loan requests to ensure we continue to meet the needs of our members.

Of the 1,166 loan applications processed in 2017 only 174 or 15% were declined. Our overall loan delinquency continues to remain very low at 0.28% compared to the 1.04% national average for credit unions our size. Our 2017 net charge off amount decreased to $66,800, a 27% reduction from last year. Net charge-offs for the year were .13% of outstanding loans which is much lower than our peer’s ratio of .48%.

We received superior loan quality ratings from both our auditor and the state and federal examiners in 2017.

Jim Lumpkin - Credit Manager

MANAGEMENT STAFF: » Jim Lumpkin,

President/CEO

» Kathy Scholes, Vice President/CFO

» Andrew Ackman, Director of Information Technology

» Cindy Packard, Director of Member Services

SUPERVISORY COMMITTEE REPORT The Supervisory Committee is responsible for monitoring the financial safety and soundness of USAgencies Credit Union (USACU) and compliance with various financial and regulatory requirements.

In fulfilling these responsibilities, the Committee engaged the independent audit firm of Daren B. Tanner, P.C., which directly reports to the Committee. Mr. Tanner determined that the committee and credit union’s practices are in accordance with the required regulatory requirements. Also, the State of Oregon and the National Credit Union Association conducted their examinations and based on their reports, the USACU continues to operate in a fiscally sound manner. We held five (5) meetings, met the annual Bank Secrecy Act (BSA) training requirements, attended Board meetings on a regularly basis, and attended the annual strategic planning session. We also reviewed internal audits, internal controls, and risk management processes.

In the opinion of the Committee, USACU continues to operate in a fiscally sound manner, in all material respects, and in accordance with applicable state and federal regulations.

Terry M. Smith Chairman, Supervisory Committee

BOARD OF DIRECTORS: » Jeff Griese, Chair

» Bill Kirchner, 1st Vice Chair

» Barbara Kveton, 2nd Vice Chair

» Randy Horn, Secretary

» Lynn Voigt

» Carol Leiter

» Patty Hyatt

SUPERVISORY COMMITTEE: » Terry Smith, Chair

» Lisa Howard, Vice Chair

» Bozena Andrews, Secretary

3

STATEMENT OF OPERATING INCOME & EXPENSESAs of December 31*

OPERATING EXPENSECompensation Taxes & Benefits Travel & Conference Business & Publication Costs Office Occupancy Office Operating Advertising & Promotions Loan Servicing Professional & Outside Services Provision for Loan Loss State Examination Fee Cash Over (Short) Interest on Borrowings Annual Meeting Miscellaneous TOTAL OPERATING EXPENSES

DIVIDEND/INTEREST EXPENSES Dividends Interest on Deposits Total Operating, Dividends, Interest Expenses Gain/(loss) on Sale AssetsTOTAL EXPENSES

INCOME Interest on Loans Income from InvestmentsMiscellaneous Operating IncomeTOTAL INCOME

NET GAIN

2017

$1,046,216

$315,931 $33,449 $21,524

$159,022 $219,093

$67,426 $170,017$459,485

$47,000$16,262

($304) $14

$3,380 $9,113

$2,567,628

$8,624 $212,913

$2,789,166 $284

$2,788,882

$2,029,080

$428,729$723,751

$3,181,560

$392,678

2016

$1,019,635

$308,888 $23,235 $19,646

$149,429 $258,954

$61,372 $192,078$382,586

$47,500$15,416

$310 $6

$6,771 $18,639

$2,504,465

$12,264 $219,004

$2,735,733 ($1,917)

$2,737,650

$1,941,251

$365,471$725,212

$3,031,934

$294,284

THE NUMBERS

*Condensed and Consolidated for USAgencies Credit Union & CU Home Loan Center, LLC

STATEMENT OF USACU FINANCIAL CONDITIONAs of December 31*

ASSETSLoans (net)CashInvestmentsAccrued IncomePrepaid & DeferredFixed AssetsOther AssetsTOTAL ASSETS

LIABILITIESAccounts PayableNotes PayableTaxes PayableAccrued ExpenseDeferred IncomeMember Savings Other Savings Accounts Share CertificatesTOTAL LIABILITIES

MEMBERS EQUITYMembership SharesRegular ReservesUndivided EarningsTOTAL MEMBERS’ EQUITY

TOTAL LIABILITIES AND MEMBERS’ EQUITY

2016

$49,661,540$6,306,659

$28,391,079$123,653 $114,816 $138,056$760,429

$85,496,232

$183,268 -

$4,963 $235,877

-

$54,213,617$9,172,139

$63,809,864

$13,391,565 $1,483,999$6,810,804

$21,686,368

$85,496,232

2017

$51,006,500$6,619,059

$28,812,113$138,886 $124,218 $112,123$814,101

$87,627,000

$201,390 -

$2 $350,123

-

$54,687,035$9,026,157

$64,264,707

$14,674,813 $1,484,000$7,203,480

$23,362,293

$87,627,000

5

AUTOS, BOATS, RVs

REAL ESTATE

REAL ESTATE LOC

SIGNATURE

CREDIT CARDS & LOC

NON-MEMBER LOANS

SHARE SECURED

$17,668,455

$14,259,042$2,177,923$2,122,420

$2,543,823

$12,158,233

$193,699

Loan Distribution - December 31, 2017

0

5

10

15

202017

2016

SHAR

ES

CHEC

KIN

G

MO

NEY

FU

ND

MO

NEY

MAR

KET

CERT

IFIC

ATES

SUPE

RSAV

ER

IRA

SHAR

ES

IRA

CERT

IFIC

ATES

MIL

LIO

NS

($)

Deposit Distribution - December 31, 2017

YEARS AT A GLANCE Year Loans ($) Shares ($) Assets ($)

2012 34,945,598 62,420,564 69,980,291

2013 35,790,425 64,955,812 72,768,536

2014 41,126,784 67,832,287 75,971,465

2015 44,218,376 72,327,233 80,793,990

2016 49,661,540 76,777,321 85,496,232

2017 51,006,500 78,388,004 87,627,000

% CHANGE Loans Shares Assets

1 yr 3% 2% 2%

5 yr 46% 26% 25%

For the Year Ended December 31, 2017STATEMENT OF RETAINED EARNINGS

Balance Net Income Balance 12/31/16 Applied 12/31/17

Appropriated $1,483,999 $1 $1,484,000 Statutory

Unappropriated $6,810,804 $392,676 $7,203,480

Total $8,294,803 $392,677 $8,687,480

1,916LOCAL COMMUNITY MEMBERS IMPACTED

$16,579CONTRIBUTED TO OUR COMMUNITY

972VOLUNTEER HOURS FROM USACU STAFF

09Financial Literacy Events

200Students attended financial reality fairs

32Community Events

217Toys donated to the KGW Toy Drive

11Staff Volunteered in Community

CU SUPPORTED INITIATIVES

$8,213272 IMPACTED

CREDIT UNIONS FOR KIDS

$3,707111 IMPACTED

VETERANS EVENTS

$3,600518 IMPACTED

FINANCIAL LITERACY

9377 IMPACTED

EVENTS

FEDERAL/STATE/COUNTY INITIATIVES

$1,059632 IMPACTED

2017 COMMUNITY IMPACT Giving back to our community is a foundational value here at USAgencies Credit Union. Our Charitable Giving Program helps support community events and initiatives that are important to members. Check out the difference we made in our community in 2017:

7

COMING IN 2018...

TECHNOLOGY UPDATES

We are excited about the many exciting changes coming on the technology front at USAgencies in 2018! In our efforts to bring you the best possible online experience, USAgencies will be upgrading our Online and Mobile Banking solutions, as well as updating and enriching our website. We expect these solutions to be available late summer, 2018.

By investing in our Online & Mobile Banking platforms, as well as in our online applications and our website, we are committing to giving you more and better access to your credit union through technology. We consider our website our “everywhere branch” - it’s open 24 hours, and allows you to do almost anything that can be done in person, online from anywhere you have an internet connection.

We know that many of our members prefer to access their accounts online, rather than in person, and we hope these exciting upgrades will serve to further enrich their experience.

Changes to Online Banking include a user-friendly interface that lets you complete key financial tasks with a single click, easy-to-use budgeting tools, a simplified portal where you can view all your aggregate account info, and much more.

Updates in Mobile Banking will allow you to do everything that can be done in Online Banking, via our mobile app! Access eStatements, view aggregate account info, pay bills, monitor budgets and more.

We will be refreshing our current website, providing easier access to the information and resources that are relevant to your needs. We are streamlining navigation, improving search tools, improving application processes and more.

WEBSITE

ONLINE BANKING

MOBILE BANKING

SHARE YOUR CREDIT UNION OBSESSION

Better rates, lower fees, better value, personalized service... there are so many reasons to be OBSESSED with your Credit Union. Share your obsession with friends, family, co-workers, neighbors, etc. and if they join USAgencies you could both earn $25! There’s no limit to the number of new members you can refer - so go ahead... spread your obsession!

Visit USACU.org/refer for complete details.

» Communities benefit with USAgencies as part of the financial services landscape. » Currently, 16 people work at USACU, and each of those jobs supports three more

in the economy. » Our most recent survey data shows that through member benefits, jobs, real

estate, and purchases of other goods and services, USACU drove a $6.8 million impact on the state’s economy.

» In 2017, USACU directly impacted 1860 people and donated a total of $16,581 to-wards community events and initiatives thanks to our Charitable Giving program.

*Data derived from the most recent EcoNorthwest report for USAgencies.

VALU

EIM

PACT

» We are owned by YOU, the people who use our services (our members), not by Wall Street stockholders like banks.

» At USAgencies, quarterly profits don’t drive our decisions. » We’re not a bank - we are a not-for-profit financial cooperative. This means that,

unlike for-profit financial institutions, we exist only to serve our members’ financial needs.

HOW IS USAGENCIES DIFFERENT? OUR STRUCTURE, VALUE & IMPACT.

» USAgencies delivers unique value to our members. » With no Wall Street stockholders to pay, we can reinvest in our members. We do

this in the form of lower fees, better loan rates and higher returns on savings. » We offer many of the same products & services as “big banks” (mobile deposit,

online & mobile banking, loans, etc.) but we’re local and member-owned. » Our most recent data* shows we returned $585,000 in direct financial benefits to

our members for the year. The average benefit returned to each USACU member was $88.

STRU

CTU

RE

9

INFO@USACU.ORG emailUSACU.org website

Our Mission: Provide Solutions to Improve Each Member’s Financial Life

(800) 452-0915 toll-free(503) 275-0300 office

95 SW Taylor StreetPortland, OR 97204