2023 CTFCU Annual Report

Annual Report

Carolinas Telco Federal Credit Union (CTFCU) stands as a trusted financial partner dedicated to serving the needs of its members in the Carolinas region. At the core of our mission lies a steadfast commitment to providing personalized service and a comprehensive suite of banking products. This includes a variety of solutions for individuals and businesses, backed by an innovative online banking platform, ensuring members have the tools they need for financial success. CTFCU extends its dedication to economic empowerment through a range of deposit products, such as savings accounts and checking accounts, designed to cater to the specific needs of our members, fostering a solid and lasting financial partnership.

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Letter from the Board Chairman

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People

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Community

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CTFCU

Our Mission, Vision, & Core Values

At CTFCU, we're dedicated to fostering consistent growth and defining financial well-being for our communities through flexible financial offerings and unmatched service. We're proud to introduce our refreshed Mission and Vision statements and new Core Values that reflect our unwavering commitment to our members' financial empowerment.

Our Mission

Empowering our members’ financial success with personalized guidance for each of life’s milestones.

Our Vision

We will foster genuine connections that promote economic well-being for our members and the communities we serve.

Our Core Values

• Commitment

• Collaboration

• Adaptability

• Curiosity

COMMITMENT: Dedication to the Organization with a promise to provide the best experience to members and coworkers. Being engaged with the Organization’s community efforts, core values, and attentive to your quality of work.

COLLABORATION: Building proactive partnerships within the Organization; sharing ideas, skills, and knowledge effectively to achieve a common goal, communicating clearly, and being open to others’ thoughts, ideas, and solutions.

ADAPTABILITY: Ability to easily Tilt and adjust to an ever-changing environment and circumstances. Able to effectively manage shifting priorities, projects, vendors and technology, responding well to change and feedback.

CURIOSITY: Demonstrating spirit and desire to learn or know something new; being inquisitive, actively seeking answers. Pushing past comfort zones to search and strive for improvement.

Letter from the Board Chairman

Carolinas Telco Federal Credit Union (CTFCU) completed the fiscal year well-positioned with solid performance in several key areas. We also experienced some challenging headwinds affecting all financial institutions and the US economy.

2023 saw a continuation of the Federal Reserve’s aggressive rate strategy, designed to bring down inflation. The Effective Federal Funds Rate (EFFR) is the interest percentage set by the Federal Open Market Committee (FOMC). Financial institutions use this benchmark rate to price lending for real estate, autos, credit cards, and other loan products. At the time of writing this publication, the EFFR stands at 5.33%, representing a cumulative increase of 5.25% from 1/1/22 to 12/31/23.

Americans from all walks of life witnessed their buying power shrink due to higher rates and prices. Collectively, consumers paid more for food, housing, fuel, and retail goods than ever before. According to the US Bureau of Labor Statistics, the Consumer Price Index rose 3.4% overall for goods and services during 2023.

Larry W. Davis | Board Chairman

These rapid rate increases during such a short period negatively impacted the banking sector, including credit unions. In response to this new economic landscape, many financial institutions experienced adverse effects on their balance sheets. As the EFFR rose, our credit union was forced to increase the rates we charge for our loan products. As was the case for all financial institutions, the Fed’s actions made it more expensive to fund loans and cooled demand for financing products. CTFCU was not immune to this reality, and our financials show a year-over-year (YOY) decrease in total assets, net loans receivable, and loan income due to these market forces.

So, what does this mean for you as a CTFCU member? The short answer is that while we’ve experienced some challenges, there is reason to be optimistic for the future. The Federal Reserve has paused rate increases as they continue to watch economic indicators, signaling that inflation is slowing before deciding when to cut rates. For our institution, there were some bright spots in our annual performance metrics. As a result of strategic balance sheet management, our net worth ratio rose YOY from 13.00% to 13.75%. Another critical financial performance indicator for our credit union is net income. When some credit unions reported losses, Carolinas Telco FCU realized a positive net income of approximately $1.4 million last year. Here’s another piece of good news: In 2023, we welcomed 1,328 people from across the Carolinas who joined the credit union. As of 12/31/23, we are 32,665 members strong! These results are evidence of our solid strategic management and our entire staff showing their dedication to our members and communities each day.

These results are evidence of our solid strategic management and our entire staff showing their dedication to our members and communities each day.

In 2022, we began offering employees paid time off through our volunteering program to support local causes. We’re proud to report a YOY increase of 76% in employee participation and 61% in volunteer hours utilized. These efforts help to align us with our vision of fostering genuine connections to promote the economic well-being of our members and communities.

Internally, we continue to equip our staff with better resources to meet our members' needs. Our Member Vantage Program, which uses Net Promoter data to measure our service levels, placed CTFCU in the top 10% of credit unions in our peer group for the fourth quarter of 2023. We are proud of this achievement and will continue to focus on surpassing our members' expectations for quality service as we advance.

Each day, our world becomes increasingly reliant on e-commerce platforms to handle business and financial transactions. This ever-changing reality presents new opportunities and threats. We remain committed to educating our members on potential financial schemes and using our expertise to protect members from fraud. Our Marketing & Communications Team created and distributed nine campaigns throughout the year to inform members about several financial scams. Utilizing state-ofthe-art detection tools and our internal expertise, CTFCU’s Compliance Team prevented $1.49 million in potential fraud losses and helped our members recover $53,844 from scammers in 2023.

As we embark on 2024, we are excited to celebrate our 90th year of operations and continue our legacy of providing impactful financial services to our members.

Our Information Technology Group showed leadership by providing employees and members with more effective digital interfaces. Every day, we improve our delivery of technology. Some examples include our Visa Travel Alerts, FICO Scores, and updated budgeting software in our Online Banking platform. These electronic services, helpful financial resources, and no-fee ATM withdrawals through the CO-OP network are evidence of our ongoing commitment to our members.

As we embark on 2024, we are excited to celebrate our 90th year of operations and continue our legacy of providing impactful financial services to our members. As shown on the opening pages of this report, we recently updated our credit union’s Mission, Vision, and Core Values. This collaborative project led by our Learning & Development, Marketing & Communications, and Member Experience Teams compiled feedback from each department to create statements representative of who we are and who we will be in the future. These principles are instrumental in guiding how we deliver service and support our communities by focusing on economic prosperity and promoting financial wellness.

In closing, we’ve been through a lot together as a credit union family over the last 90 years. Regardless of what’s happening in the world or the financial markets, always remember that we will keep our members’ best interests at the forefront of all we do. Your dedicated Board of Directors, Management Team, and Staff are eternally grateful for your continued trust and membership in this credit union. We genuinely believe our best days are ahead!

Larry W. Davis — Board Chairman

People are our Purpose

“Member first” is more than a catchy saying, we are committed in giving back to our members in any way we can. From providing the best possible products, to celebrating our over 32,000 members through giveaways and championing causes that affect them, our dedication to people over profits guides every initiative we undertake.

T. South Boulevard Grand Opening

E. South Boulevard Grand Opening

L. Celebrating “Youth Month”

C. International Credit Union Day — Cornelius branch

C2. “National Wear Red Day” for Heart Disease Awareness

O. "Go Gold" for Childhood Cancer Awareness

F. “Dog Day” Giveaway Winner

C3. Military Appreciation — Baseball Giveaway Winner

U. "Wear Pink" Fridays in Support of Breast Cancer Awareness

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Community Impact

Serving Beyond Our Members

We’re about more than just excellent service to our members. Creating genuine connections with our communities is essential to who we are at CTFCU. By dedicating ourselves to be of service we know that we are improving the economic landscape for everyone, making the ripple effects of our impact limitless.

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Employee Volunteers

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Organizations Supported

536.23

Volunteer Hours by CTFCU Employees

CTFCU Charitable Contributions in 2023

$60,903

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C. Alzheimer's Association — "Walk to End Alzheimers"

T. Hospitality House of Charlotte

E. Special Olympics Volunteering Event

L. Second Harvest Food Bank

C2. Second Harvest Food Bank

O. Membership Benefits Drive

F. Bright Blessings Volunteering Event

C3. Classroom Central Volunteering Event

U. Bright Blessings Volunteering Event

CTFCU Legacy Scholarship

Supporting Your Dreams

We pride ourselves in giving back to our members and the communities we serve. Each year, starting October 1, credit union members can apply for our CTFCU Legacy Scholarship online through February 1 of the following year. We provide support to our recipients with scholarships of $1,500 each for tuition costs for the school year. This year we are proud to expand our scholarship to award TEN individual members through our partnership with Carolinas Credit Union Foundation. Applicants not selected in the first round of consideration are automatically entered into the Carolinas Credit Union Foundation's general scholarship application pool for various awards. Congratulations to the ten CTFCU members who received scholarships to continue their journey toward higher education!

Our 2023 Scholarship Winners

Aaron Cooper Raleigh, NC

Baylor University

Kendall V.

Gastonia, NC UNC Wilmington

Kathleen Miller Tega Cay, SC

Clemson University

Kensington Tisdel Simpsonville, SC Spelman College

Lela McMichael Charlotte, NC University of San Diego

Matthew Burnett Lexington, SC University of South Carolina

Samuel Suber Gastonia, NC UNC Wilmington

Alexis Salvador Indian Trail, NC UNC Chapel Hill

Martin

Mekdes Lugo Indian Trail, NC UNC Charlotte

Zyah Bostick Charlotte, NC UNC Chapel Hill

Supporting Education in Our Communities

This year, we took our commitment to youth education in our communities to a new level by supporting beyond the back-to-school season. By partnering with organizations like Classroom Central, a Charlotte-based nonprofit that supplies free resources to educators year-round, and sponsoring local classrooms, we showed our commitment to improving equity in our community.

C. Classroom Central Volunteering Event

T. First in Families — "School Supply Drive"

E. Classroom Central Volunteering Event

L. Classroom Central Volunteering Event

C2. Classroom Central Volunteering Event

O. Classroom Central Volunteering Event

F. Classroom Central — "Backpack Drive"

C3. Classroom Central Volunteering Event

U. Classroom Central — "Backpack Drive"

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Member Feedback

The staff here is amazing! I joined because I was tired of the “big bank” atmosphere. Here you get all the small-town bank friendliness with the amenities of a large bank and everyone knows your name. Highly recommend.

Anthony J. | Columbia Branch | ★★★★★

I just love how personable everyone is at this [credit union] and really appreciate their willingness to help. Loan responses are done within 24hrs and for me I have received my response within the same day...I have been with Carolinas Telco for 10yrs plus and looking forward to many more!

Mi R. | Central Branch | ★★★★★

The family friendly touch is a huge benefit that sets [CTFCU] apart from competing banks. You treat your members like a family member and not a number. Never stop doing this.

Rodney C. | Operations Department |

I think Telco and the people who work there are tremendous, they are always ready to help with whatever your needs might be. Everyone is willing to take the time to sit down and go the extra mile for you. In short you don't feel like an account number, you feel like a person, and from my perspective that means a lot. Thank you all!

Kenny M. | South Blvd. Branch | ★★★★★

This is the best credit union. The customer service is always top tier. Once I call an issue in they always resolve it the first time. Love it here.

Cliff F. | Crisman Branch |

Carolinas Telco is great...the employees there are very helpful [and] always have a smile.

They are [a] fast and dependable group of people...make sure ya'll become a member with Carolinas Telco Federal Credit Union...they will take great care of you!!

Chaunta R. | Columbia Branch | ★★★★★

The staff members are very polite and knowledgeable. Love talking to all of them, no matter who handles my call.

Rosa T. | Member Support |

This [credit union] has very good customer service…When I went into the branch everyone was really kind and nice, not to mention quick service.

Latia A. | Raleigh Branch |

Really kind and wonderful people here!

Always a pleasure!

Connie

B. | Cornelius Branch |

I recently worked with the Greenville branch regarding a new car loan. [Staff was] extremely helpful throughout the loan application, underwriting, and closing process. They were on top of it each step of the way, not to mention provided great customer service.

Matthew B. | Greenville Branch

We've been with Carolinas Telco Federal Credit Union for decades--every single interaction has been positive.

L. Lauer | Cornelius Branch | ★★★★★

I just wish other financial institutions would follow your lead. I believe the customer service that I have always received at this branch is second to none! [All] the staff deserve a 10!!! Great service!

Michael A. | Gastonia Branch |

Board of Directors

Our Board of Directors is comprised of volunteers elected by members at large to serve the credit union. Driven by their commitment to our core values, these individuals provide oversight and governance to protect the interests of the credit union's members. Our success is a testament to our Board's stewardship and steadfast leadership in guiding CTFCU's performance and evolution.

Larry W. Davis Chairman of the Board

Mitchell D. McIntosh Vice Chairman

Lynwood Bowen Treasurer

E. Leland Haywood Director

James W. Rhodes Secretary

Larry E. Shumpert Director

Al Hernandez Director

Executive Management Team

Our Executive Management Team directs our operational and strategic initiatives with unwavering dedication, leading the charge toward sustained growth and organizational development. They champion the economic well-being of our members and communities we serve, embodying our commitment to excellence and service at every turn. The Executive Team's collective expertise, passion, and tireless efforts have been instrumental in shaping our credit union's success and guiding our trajectory toward prosperity and positive member impact.

Jimmy Womack Chief Operating Officer

Nicol Matthews Chief Experience Officer

Alan Stapleton Chief Financial Officer

Corey Brickers Chief Marketing & Communications Officer

Chris Harrington Chief Technology Officer

Joe Jaspers VP Wealth Management

Supervisory Committee

The Supervisory Committee is created by law and appointed by your Board of Directors to independently represent all members. We evaluate Carolinas Telco Federal Credit Union’s activities and operations to ensure soundness, compliance, and reliability and appraise internal controls’ adequacy. Our duties also include ensuring the performance of a comprehensive annual audit, administering Board of Directors elections, independently verifying member accounts, and objectively investigating formal complaints. Your committee is currently composed of volunteers with career backgrounds in insurance, communications, and information technology.

To maintain these high standards and fulfill our financial and regulatory compliance responsibilities, we regularly meet to review all internal audit reports provided by the Credit Union’s internal auditors. To fulfill our responsibilities for 2023, we hired the accounting firm Doeren Mayhew, CPAs and Advisors, to conduct an independent, in-depth audit of Carolinas Telco Federal Credit Union’s operations and issue a report of their findings. We’re proud to announce their December 31, 2023, report showed the financial statements accurately represent the financial position of Carolinas Telco Federal Credit Union and conform with Generally Accepted Accounting Principles of the United States of America.

John A. Gentry III Committee Member

Daniel Lugo Committee Member

Al Hernandez Director

Treasurer’s Report

Carolinas Telco FCU experienced another year of sound performance even though operating expenses remained elevated due to infrastructure investments and other costs. While 2023 represented a challenging economic environment, credit union operations and member service levels remained robust. Net income from continuing operations totaled approximately $1.40 million. The credit union finished 2023 with 32,665 members.

$76,918,791

2023 Capital Dollars $2,929,169 2023 Member Dividends

Lynwood Bowen Treasurer

Financial Highlights

Below are 2023’s financial highlights, when compared with 2022. These figures were obtained from financial statements, audited by the Doeren Mayhew firm.

CONDENSED STATEMENTS OF REVENUES, EXPENSES, AND DIVIDENDS

* For the year ended. // Above is certain information concerning the financial position and results of operations of Carolinas Telco FCU, as of the dates indicated. This data is derived from, and should be read in conjunction with, the audited financial statements of Carolinas Telco FCU.

As we mark our 90th anniversary in 2024, we want to take a moment to reflect on the rich history of Carolinas Telco Federal Credit Union (CTFCU), taking great pride in the journey we've shared with our dedicated members.

Carolinas Telco Federal Credit Union, originally Carolinas Telco Credit Union (CTCU), was formed in 1934 in Charlotte, NC, operating out of the "Old Dial Building" on North Caldwell Street. Under the operation of Mrs. Minnie Bell Stone, CTCU encouraged Bell System employees to save by accepting deposits in the form of change and loose bills.

In 1937, CTCU became a state-chartered Credit Union, extending its services to include loans; the first of which funded a member's tonsillectomy. In 1979, CTCU transitioned to a federal charter and was renamed Carolinas Telco Federal Credit Union (CTFCU). Today, CTFCU proudly serves members across North and South Carolina through eight branch locations across five counties, welcoming members from various industries since its conversion to a Multiple Common Bond Charter in 2020.

Over the past 90 years, CTFCU has achieved remarkable milestones that reflect our commitment to the financial empowerment of our members. Our journey has been one of growth, resilience, and innovation, introducing new technologies and expanding our offerings to meet the ever-changing needs of our communities. Our 24/7 electronic services, Online Banking and mobile app, and access to over 30,000 Co-Op ATMs allow our members to bank with us from anywhere. Through our humble beginnings, we have always had a vision for the future, keeping our community in mind. This special anniversary will not only be a tribute to CTFCU's enduring legacy but also a testament to the unwavering support of our members. We look forward to celebrating this milestone with the communities that have helped shape CTFCU into the credit union it is today, and to continuing to serve them for 90 years and beyond.

Celebrating 50 Years of Service

We extend our heartfelt appreciation to Director for his many years of exemplary service as he transitions to an Emeritus capacity. Mr. Haywood is a valued colleague, advisor, and visionary leader. We are profoundly grateful for his contributions to Carolinas Telco Federal Credit Union.

E. Leland Haywood