Annual Meeting
Tuesday, February 9, 2021

- Good evening everyone.

Welcome to NavyArmy Community Credit Union 65th annual meeting. I'm Bryan Stone and I have the honor of being the Chairman of the Board of Directors this year. I'd like to thank you all for being here tonight. Couple of things, I've been asked to go over a couple of housekeeping rules. If you would, please make sure your phones are on silence. And also, please adhere to the Valencia mask ordinance, we'll appreciate that.

The next thing, ascertain, we do have a quorum, correct? Okay, thank you. I would like to introduce our board members. We have several that are here tonight, and I'd like to introduce them. First, we have John Chapman, our Vice Chair. Next, we have Bob Westrup, Treasurer. Next, we have Tess Gonzales, our Secretary. Next, we have Gerald Villareal, our Board Director. We have several that aren't here tonight. I'd like to give their names. We have Kendra Kinnison, she's a Director. Thelma Mandel, Director. Sylvia Martinez, Director. Pete Rivera, Director. We also have Advisory Directors, Bobby Calvillo, Drue Jones, Ben Salinas and Frank Smith. Next, I'd like to read my official report as Chairman of the Board of Directors.

Established in 1955, NavyArmy began with a few Navy Civil Employees who worked at Naval Air Station Corpus Christi. Today, NavyArmy serves over 194,000 members across eight-county areas, including the Rio Grande Valley. We attribute this phenomenal growth to the staff and our member-owners who support our efforts to provide financial products and services to the areas we serve. Now, as we all know, 2020 was a year like no other. Yet NavyArmy continued to grow in assets, loans and members. Throughout the COVID pandemic, we were able to keep branches open by serving members through the drive-thrus and by appointments. We worked through the hurdles that this year brought in order to ensure that our members' needs were met. And in 2021, it'll be no different. We have our new administration building that will be completed by the second quarter of this year. And in the Rio Grande Valley, we've begun construction on our newest branch, which is located at 9100 North, 10th Street in McAllen, Texas. We will continue to improve our core services, the systems, our digital solutions and staff development to provide an exceptional member experience. So, on behalf of the board of directors, I wanna thank you for your continued trust in NavyArmy. And to let you know that we are committed to meeting the financial goals for our member services and our member owners. Next, I'd like to invite Tess Gonzales, our secretary to the podium to read the minutes.

- Hi, good evening. I'm Theresa Gonzales or Tess Gonzales. And this past year I had the honor of being the secretary to the board of directors. And so tonight I will read the minutes from last year, 64th annual meeting. So let us begin. Mr. Pete Rivera, Chairman of the Board, called the meeting to order at 6:30p.m. on February 11, 2020, at the Sokol Hall. Mr. Rivera ascertained a quorum of members were present to conduct the meeting and introduced the Board of Directors and Advisory Directors. Mr. Rivera read his annual report and he asked for two top grand prize tickets to be selected and that they would be revealed at the end of the meeting. Mr. Rivera then introduced John Chapman, Secretary of the Board of Directors. Mr. John Chapman read the minutes of the 63rd Annual Membership meeting, and then asked for any additions or corrections in the minutes. A motion was made and seconded from the floor to accept the minutes as read and written. Motion carried. Mr. Chapman introduced Mr. Bob Westrup, Treasurer of the Board of Directors. Mr. Westrup then read his Treasurers report and then introduced Mr. Gerry Morrow, CEO. Mr. Morrow introduced the Senior Executive Team and recognized all staff. He then presented his report to membership. 2019 was another year of solid asset and member growth. Total assets grew to $3.3 billion and loans outstanding ending the year at $2.9 billion. We continued to have tremendous growth opportunities in the Rio Grande Valley with loans outstanding at $700 million. Navy Army Community Credit Union is the 5th largest credit union in Texas and is 76th out of 5,396 credit unions in the United States. Navy Army continues to embrace the value of "people helping people" by providing easy access to affordable credit to purchase autos, buy homes, for personal use and loans to our business members. NavyArmy funded $1.2 billion to our members in 2019, that helped membership reach their financial dreams. Your credit union donated $650,000 and over 2,000 volunteer hours back to community charitable organizations in 2019. We are looking forward to 2020 as we continue to build out our branch network both in the Rio Grande Valley and Coastal Bend area. We continue to grow our membership and continue to bring new and innovative technology for convenience to you our members, plus make sure that NavyArmy remains relevant today and well into the future. The Board, management and staff thank you for your support and look forward to an even more prosperous 2020. Mr. Morrow requested Pete Rivera, Chair, Board of Directors to the podium for membership questions. There were six questions, two comments or suggestions from the floor and one compliment. The compliment was, NavyArmy was complimented for excellent service. The member always receives a call back. Questions: Long time member applied for a loan and was asked for four references. Why would she have to provide four references with the loan history she has with us? Question: Why does the Kostoryz branch not have an American Flag outside? Question: Why was the Annual meeting not advertised more? Question: Why is there a dollar limit amount on mobile deposits? Question: Why are we limited to the notes and special characters on mobile deposits? And Why are account statements printed later in the month? Comments and Suggestions: The 1099's are not user friendly this year, and member suggested talking to our third-party vendor. The Sokol Hall is not ADA compliant, so member suggested moving Annual meeting to another location next year. Mr. Morrow responded to the questions and comments. And then he turned the meeting over to Kendra Kinnison, the Board of Director. Ms. Kendra Kinnison was on the Nominating Committee and she read the election process. The board members up for re-election are the following: Mr. John Chapman, Ms. Theresa or Tess Gonzales, Ms. Thelma Garza Mandel, Mr. Bob Westrup. Mr. Westrup gave a summary of his Bio. The other bios were placed in the annual report. A motion was made and seconded from the floor to accept the re-election of the nominees. Motion carried. Ms. Kinnison turned the meeting over to Mr. Rivera. Mr. Rivera requested 8 prize tickets be selected. The 8 prize ticket, including the 2 ticket numbers previously drawn were announced. Mr. Rivera made closing remarks and thanked everyone for their attendance and support. The meeting adjourned at 7:15 p.m. There were a total of 10 prize winners. At this time, are there any changes, corrections or additions from the floor? Is there a motion to approve the minutes? Is there a second? So moved. Minutes are approved. Now I would like to invite Mr. Westrup Bob to the podium to deliver the treasurer's report.

- Good evening, ladies and gentlemen and thank you for participating in the annual members meeting. NavyArmy had another successful year. Our assets now total $3.664 billion, which is an increase of over 12% from last year. Our return on assets were 1.04%, and that is after bonus dividends were paid to membership. Our net worth is 10.85% of total assets which indicates a strong financial position. Our annual audit was conducted by Clifton Larson LLP, a Certified Public Accounting firm.

- [Female Voice] Love it. Our annual audit was conducted by Clifton Larson LLP, a Certified Public Accounting firm. in accordance with generally acceptable auditing standards. Upon completion of the exam, NavyArmy was issued an unqualified opinion, which means that the financial reports are presented fairly and with no material exceptions and meet the standards of generally accepted accounting principles. The Board of Directors continues to work to maintain a sound financial position for the credit union by approving and monitoring the long-range strategic plan. Our goal is to provide the proper balance of loans, assets and deposits with compliance and safety for the members. The board also works to provide products and services that help meet the financial needs of our member-owners. I would like to take this opportunity to thank my fellow board members, our staff and our management and to you, our members, for your participation and cooperation in making NavyArmy a continuing success in South Texas. Thank you. And I'd like to introduce Gary Morrow, our CEO.

- Thank you Bob. Good evening everyone. Before I get started, I'd like to introduce our senior management here who's Dana Sisk, our Executive Vice-President, Ashley Smith, our Chief Marketing Officer. Virginia Whitham, HR Officer. Shannon Srp, Technology Officer. Cindy Ramos, Chief Operating Officer. Dan Dibble, Chief Lending Officer, Consumer Collect, Commercial. Roman Escobar, head of our real estate area and Ms. Terry Young, VP of Operations. You know, NavyArmy enjoyed another solid year of asset growth and member growth despite the 2020 pandemic. As Bob said, assets grew over 12%. Our total assets, almost $3.7 million, and loan outstanding ended up $3.1 million. We continue to have tremendous growth opportunities in Rio Grande Valley, loans outstanding are now at $1 billion. We've been down there eight years, going on nine years. NavyArmy is the fifth largest credit union in Texas. And is 84 out of almost 5300 credits unions in the United States. Your credit union continues to perform at or above industry peer performance levels. NavyArmy is financially sound as Board Treasurer, as Bob Westrup reported. NavyArmy continues to embrace its fundamental culture and value of "people helping people", by providing easy access to affordable credit to purchase autos, buy homes, for personal use, and loans to our business members. In 2020, NavyArmy funded $1.1 Million to our communities. Bought automobiles, help people purchase homes, personal loans, and PPP SBA loans. In fact, Navy Army was nationally recognized by the SBA for our efforts with the PPP program. Not only that, we assisted over 40,000 members with payment deferrals and mortgage payment forbearances to help members deal with financial setbacks caused by the COVID pandemic. Your credit union continues to enhance the values to its members by providing no cost, low cost, high quality financial products and services and pay an above market savings rate. NavyArmy worked to fulfill our social mission by giving back to our Coastal Bend communities and Rio Grande Valley communities. Due to COVID, many community activities were postponed or canceled, but your credit union continued to donate over $600,000 to help them keep afloat. As members of NavyArmy, be proud that your credit union is making a difference in the people's lives of our communities. With 2020 in the rearview mirror, we are looking forward to 2021, as we continue to build out our branch network both in the Rio Grande Valley and Coastal Bend, continue to grow our membership, and continue to bring new and innovative technology for convenience to you our members. The, one last thing for finish is that, this year has certainly been a challenge as everybody has felt it. I will tell you that our service levels have suffered. And as we've dealt with, our contact center is overrun. If you've tried to call us, there's wait times. We're working to get better. We're dealing with, you know, very tight labor force in this area, staffing shortages due to COVID. New hires, there's training issues, getting people trained up quick enough, desperately working to hire more people. And our service levels will improve as COVID gets behind us. I just wanted to let you know that we feel your pain, we understand it and we're working very hard to fix those service levels. Appreciate your patience while we, while we improve this. So, thank you. Chairman Stone. We'll take questions from you all. And I'm sorry we don't have a common microphone that we can use because of COVID issues, but there's note pads on your table. If you want, just write down any questions, hold your hand up and people will bring them up here and we'll answer them. Okay, the question is, well, first comment is. First, thank you for getting ADA qualified building for our meetings. Again, we heard you last year. That's the reason we're no longer a Sokol hall, we got here, improve conditions. Second is, as much money as the credit union makes, this meeting is just one time a year. You need to have food and get out some money to attract the people here. Like it is tonight, not many people here will come. Certainly understand that, we've always taken this meeting and we try to make it a more of a member appreciation than just an annual meeting. We've given door prizes, we give them way gifts and we do have food. That will continue in the future. Currently, unfortunately, we have to apply, adhere to the CDC rules about COVID. We have to space out, we can't have any common food. We can't touch a lot of things. I promise you next year, we get this behind us, it'll be a much better event, I Promise you. But appreciate your comments. Okay, the question is, why am I being charged every time the transfer of money after three transactions? I believe we stopped, yeah we suspended that.

- So the savings transfer fee is intended to discourage members from using savings accounts as transaction accounts. But if the member who asked that question would like to speak with me after the meeting, I can offer some options to avoid that fee.

- Any other questions? Okay. This has been, as always, you have any questions, you may come up after this meeting or anytime during the year, always feel free to contact me. I'll get back to you and answer your questions, get you an answer. Thank you.

- Thank you, Gerry. Next I'd like to invite, Tess Gonzales back up to the podium for the election process.

- Got it. Okay. Hello again. The nomination and election of members to serve on the Navy Army Community Credit Union Board of Directors is governed by the credit union's Bylaws and Policies & Procedures. The Board selects a Nominating Committee which then proposes individuals for Board nominations. Members are allowed to petition for nomination prior to the Annual Meeting to have their name placed on the ballot at the Annual Meeting. The petition must be signed by a minimum of 500 members who are in good standing, designated as the "Primary Owner" on the account, and at least 18 years old. On October 1st, 2020, petition packets were made available to be picked up, signed by members, and returned to NavyArmy by 5:00pm on November 1st of 2020. As of November 1st 2020 5.00 pm, there were no packets submitted for nomination to the board. Therefore, the two candidates that will be voted on tonight are those selected by the Nominating Committee. The Nominating Committee consists of the following members, myself, Thelma Garza Mandel, Sylvia Martinez, and Pete Rivera. The two positions open for election to the Board are for a three-year term. In the essence of time, you may read the candidate's bios in your annual report. The Nominating Committee has placed the following individuals up for nomination. Mr. Bryan Stone and Mr. Gerald Villarreal. I now request for a motion to vote by acclamation. Do I have a motion? Thank you. A second? Thank you. All in favor say I.

- [All Members] I.

- Any opposed? Okay. Thank you so much. We really appreciate you being out here tonight. Bryan. Motion carried, I'm sorry.

- Thank you, Tess. That concludes our meeting, we're adjourned. Thank y'all for coming.