Annual Report | 2021 Financials

2021 ANNUAL REPORT

In 2021, CAP COM opened its newest branch in Glenville.

Pictured here is Valerie G., Branch Manager.

Putting people first guides every effort at CAP COM because it’s a value that we share across all employees. The annual report condenses a year’s worth of our efforts in the form of facts and figures.

Each person whose life we touched in 2021, and every employee who served you, are represented. As you can see from the volume of services we provided, thousands of members are benefiting.

If you met with us in 2021 for help setting financial goals, creating a plan, and seeing it through – your goals are our goals.

If we helped you make a major purchase like a car or your dream home, or update your living spaces, or pay for a child’s college education – your story is our story.

If you came to us for resources to operate or build your business – your success is our success.

Working together to support your financial well-being is what we do best. After all, credit unions are powered by professionals who are members just like you.

CAP COM is a leading Capital Region employer – and that’s according to the people who work here! I’m thrilled that employees, again, have voted CAP COM a Top Workplace (Times Union), Best Place to Work (Albany Business Review), and Best Credit Union to Work For (a new national honor, Credit Union Journal).

The CAP COM Cares Foundation extends our people-first support to our neighbors in need. More than $5 million has been given back to the community since it was founded in 2003. Outreach continues all year, thanks to donors and volunteers. Nine out of 10 CAP COM employees volunteer to help others.

Together, we can do even more. Uniting with SEFCU to form a new credit union would provide more life-enhancing benefits, more branches, more community support, and services powered by the familiar people you turn to today.

CAP COM members will be able to vote on the proposed merger in 2022.

Meanwhile, we need to keep building on the progress we’ve made. At the top of the list is finding new ways to leverage the power of digital banking with personal attention from financial experts.

We understand that managing life during the pandemic has not been easy. Having a trusted financial advocate you can depend on is more important than ever. Thank you for granting us the privilege to serve you today and at every turn in your life.

BUILT TO SERVE Here are a few ways CAP COM provided value to members and the community in 2021.

293,000 Emails and phone calls handled by Member Service teams

$6 MILLION Interest earned by members on their account balances

$1.4 BILLION Total purchases made with CAP COM debit cards and low, fixed-rate credit cards

14,500 Loans helped members buy a car, go to college, pay down debt, improve their home, or stay afloat

$2.4 MILLION Total value of rewards points earned by credit cardholders

370 Christopher McKenna President/CEO

CAP COM employees volunteered 4,000 total hours of community service

Figures reflect averages and rounding.

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It’s hard to believe we’re entering the third year of the pandemic. Our lives have certainly shifted in ways we couldn’t have imagined when it all began.

Serving on the Board of Directors has made me appreciate the variety of challenges people face and the wide array of financial solutions CAP COM provides. Every member interaction is an opportunity to make a positive impact and demonstrate the credit union difference.

CAP COM’s financial performance continues to shine.

That’s because it reflects a community of individuals, families, and local businesses, each making the most of their membership benefits.

How do we keep enhancing services? We continue to evolve.

Last summer, CAP COM opened a new branch in the Hannaford Plaza in Glenville. If you live, work, or simply find yourself in the area, welcome! Please feel free to consider the Glenville location “your branch.”

The CAP COM Cares Foundation also adapted its efforts to address unmet needs in the community. New for 2021, grants totaling $100,000 helped address the infrastructure needs of local nonprofits, so they could concentrate on the people they serve.

And in 2021, CAP COM’s Board and senior leaders began exploring the potential of merging with SEFCU to create a new credit union. A comprehensive evaluation of services was conducted, due diligence continued over several months, and the findings were, and continue to be, very exciting.

Together, CAP COM and SEFCU can provide more for members, employees, and our community – far more than either credit union could deliver on its own. I hope you’ve been able to review the information about the proposed merger that CAP COM has provided along the way. If you and other CAP COM members vote to approve the merger, as I plan to do, I can’t wait to help guide the efforts of this new alliance.

Being in your corner at CAP COM means supporting efforts to enhance your life with financial services that are easy, affordable, and keep improving. On behalf of the Board of Directors, thank you for inspiring us to fulfill our mission and keep reaching higher.

Providing affordable financial services that sustain members – and empower them to thrive – is CAP COM’s calling. These services rely on a solid financial bedrock from year to year.

The management team is responsible for that bedrock: building, maintaining, and strengthening the credit union’s financial position and health. Interlocking responsibilities include managing growth, augmenting performance, and mitigating risk. The team closely tracks financial performance while managing the effects of market fluctuations and economic shifts on the overall risk to CAP COM. As the pandemic churns on, CAP COM remains a goto resource for members. The needs of the membership community are as diverse as every personal struggle and success, so the credit union’s financial solutions and guidance span the full range. The balance sheet reflects the vigor of that support.

Fueling every effort is fiscal strength. CAP COM produced exceptional financial results for its members in 2021.

At year-end, CAP COM’s total assets weighed in at $2.78 billion, increasing $486 million, or 21.2% year over year.

Members’ equity rose $42.0 million in 2021, resulting in a net worth ratio of 9.58%. This level of net worth is considered “well capitalized” by the National Credit Union Administration, the federal regulator of credit unions. It is the highest designation a credit union can achieve.

We take pride in fortifying CAP COM’s financial bedrock, so members can pursue financial health and happiness on firm ground. Thank you for choosing to “bank where you matter most” so we can keep proving it to you every day.

Patrick J. Kelly Board Chair

David J. Jurczynski Executive Vice President / Chief Financial Officer

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CAP COM FEDERAL CREDIT UNION AND SUBSIDIARIES Consolidated Statement of Financial Condition December 31, 2021 2021

(Unaudited)

ASSETS Cash and cash equivalents

Investments

Loans held for sale, at market value Loans to members, net of allowance for loan losses

$

167,731,795 5,913,761 2,077,348,665

Premises and equipment, net NCUSIF deposit Foreclosed assets Goodwill and other intangible assets, net Other assets

TOTAL ASSETS

LIABILITIES AND MEMBERS’ EQUITY Liabilities Deposits Borrowed funds Accrued expenses and other liabilities

Total liabilities

Total members’ equity

TOTAL LIABILITIES AND MEMBERS’ EQUITY

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397,688,480

44,788,791 19,392,258 20,925 8,169,754 59,744,555 $

2,780,799,164

$

2,257,575,985 235,684,380 22,501,845 2,515,762,210 265,036,954

$

2,780,799,164

120,500

87,000

30,000

416,000

Digital banking users

Members use their mobile app each month

Surcharge-free CO-OP ATMs in 50 states & 10 countries

Checks deposited via mobile deposit in 2021

Figures reflect averages and rounding.

CAP COM FEDERAL CREDIT UNION AND SUBSIDIARIES Consolidated Statement of Income For the Year Ended December 31, 2021 2021

(Unaudited)

INTEREST INCOME Loans to members Securities and investments Overnight deposits and other

Total interest income

$

INTEREST EXPENSE

Deposits Borrowed funds

Total interest expense

81,721,065 1,564,039 474,723 83,759,827 6,304,258 164,965 6,469,223

Net interest income before provision for loan losses

77,290,604

PROVISION FOR LOAN LOSSES

Net interest income after provision for loan losses

6,000,000 71,290,604

NON-INTEREST INCOME Commissions and member service fees Card interchange fees Mortgage banking income Investment and brokerage services Insurance premiums Net gain on investments and sale of loans Other

Total non-interest income

10,197,588 16,868,386 3,369,913 3,662,140 5,240,789 12,979,061 4,227,130 56,545,007

NON-INTEREST EXPENSE Compensation and employee benefits Office operations Loan servicing Card servicing Office occupancy and equipment Marketing and promotions Data processing Professional fees and services Other non-interest expense

Total non-interest expense

44,054,558 5,236,421 2,000,398 8,008,699 5,475,873 3,047,890 7,417,487 4,573,777 2,535,941 82,351,044

CONSOLIDATED NET INCOME

$

45,484,567

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CAP COM’s Supervisory Committee is made up of volunteers appointed by the Board of Directors. Working in partnership with the credit union’s Internal Audit Department, we are committed to making sure members’ funds and interests are protected and that the credit union’s financial condition is fairly and accurately represented.

The committee chose the CPA firm of Crowe Horwath, LLP to perform the audit for the year ending December 31, 2021. The audit is conducted in accordance with generally accepted auditing standards, which require that it be planned and performed in order to obtain reasonable assurance that the financial statements are free from material misstatement. This audit also assesses the operations of the credit union to determine that no material weaknesses exist.

The results provide us with the confidence that the credit union is safeguarding members’ assets, is in compliance with applicable regulations, and follows policies and procedures approved by the credit union Board of Directors.

A copy of the Consolidated Financial Statements, including the Independent Auditor’s Report, may be obtained from CAP COM by written request. In addition to these audits, the National Credit Union Administration (NCUA) performs periodic regulatory examinations and reviews.

Please notify us of any situations you feel were not handled to your satisfaction by sending your correspondence to: Supervisory Committee, P.O. Box 11279, Albany, NY 12211-0279.

On behalf of the members of the Supervisory Committee and the Internal Audit Department, thank you for putting your trust in CAP COM.

Robert Davis Supervisory Committee Chair

Jenny R., owner of A+ Meditrans, says CAP COM provides “peace of mind for all our banking needs.”

She consults with Shane R., Business Banking Manager, at her facility in Albany.

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HOW CAP COM CARES More than $5 million donated to serve the community since inception in 2003.

$350,000

$151,000

3,000

Donated to food pantries and rescue missions in partnership with SEFCU

To partners addressing mental and behavioral healthcare

Children received backpacks of supplies to excel at school

$100,000

$132,000

600

Awarded to 20 local nonprofits for their infrastructure needs

To partners addressing financial literacy and workforce readiness

Households received Thanksgiving meal deliveries

$139,000

$86,500

235

To nonprofits addressing hunger and food insecurity

Scholarships and awards for 40 individuals

Figures reflect averages and rounding.

New winter coats to keep kids warm

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BOARD OF DIRECTORS

Patrick J. Kelly – Board Chair Edward A. Gilligan – First Vice Chair Chip Lawrence – Second Vice Chair Christopher McKenna – Treasurer Mark Marchand – Secretary John Ericson – Director Marty Finn – Director William Fitzpatrick – Director Beth King – Director Brenda Robinson – Associate Board Member

4 EASY WAYS TO BANK Connecting members everywhere with CAP COM.

CLICK Bank Online www.capcomfcu.org

SUPERVISORY COMMITTEE

Robert Davis – Chair Lou Anne Bigaouette – Vice Chair Paul Dettenrieder – Secretary Marty Finn – Member Amy Barber – Member

BOARD MANAGERS OF CAP COM GROUP

Mark Marchand – Chair Lou Anne Bigaouette – First Vice Chair David J. Jurczynski – Treasurer Robert Davis – Member Paul Dettenrieder – Member Marty Finn – Member Chip Lawrence – Member Christopher McKenna – Member Kyle Rueckert – Member

TAP Mobile Banking App www.capcomfcu.org/mobile

CALL Member Services & Automated Phone Banking (800) 634-2340

SENIOR MANAGEMENT

Christopher McKenna – President/CEO David Jurczynski – EVP/CFO Lee Carman – Chief Lending Officer Susan Rosko Fogarty – Chief Relationship Officer John Shartrand – Chief Investment Officer, CAP COM Financial Services Julie Hughes – Sr. VP of Risk Management Robert Roemer – Sr. VP of Delivery Systems Ginny VanAmburgh – Sr. VP of Consumer and Mortgage Lending Lauren Tatro – VP of Marketing Theresa Trietiak - VP of Human Resources

Federally insured by NCUA

VISIT Neighborhood Branches & ATMs Shared Branches Across the U.S. www.capcomfcu.org/locations