Connexus Credit Union 2023 Annual Report

Empowering Every Interaction 2023 Annual Report

Empowering every interaction: How tech enhances our member experience Technology is evolving at a rapid pace. We see it making splashy, exciting headlines.

Cars can drive themselves. “Smart” home appliances are the norm. Artificial Intelligence (AI) and virtual reality (VR) have become dinner table topics. The tiny computers we carry in our pockets keep getting faster and more powerful.

We’re linked to the world, 24/7.

But the tech most people experience—and expect—when managing their finances isn’t making headlines like driverless cars and VR headsets. Instead, this tech is quiet. It’s smart. It’s happening behind the scenes. It exists to ensure banking remains simple, second nature, and secure.

Connexus understands our members value consistency, ease-of-use, and the security of their assets above all else. And we know that embracing and advancing our tech is the best way to continually offer the reliable, secure banking experience members expect.

With that in mind, our strategy for navigating the digital landscape has been to introduce new tech thoughtfully and unobtrusively. Our advancements happen behind the scenes, with careful forethought. We’re making continuous improvements that ensure our members’ experiences are convenient and reliable every time they interact with our organization. We aim to introduce innovative solutions that provide members with relevant, accessible experiences.

We don’t want our members to feel overwhelmed or burdened by the technology they interact with when they do their daily banking. Instead, the best banking tech should be seamless and straightforward. It should allow our members to manage their money how they want, when they want, from wherever they are. It should exist in the background—making lives easier, keeping finances secure, and ensuring financial empowerment at every touchpoint.

Please enjoy our 2023 Annual Report for a glimpse into the ways we used technology to enhance how our members and employees connected with us—at every interaction.

We want our progress to complement our purpose. Our tech should coexist with our talent. Our vision should be enhanced by these advancements, not hindered.

2023 Annual Report

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A message from the Board Chair and President & CEO We are pleased to share Connexus Credit Union’s Annual Report for 2023, which highlights a year of technological progress, adaptability, and an unwavering commitment to our member-owners.

Through another year of economic challenges and global uncertainty, Connexus demonstrated resilience and an impressive dedication to driving our organization forward; we achieved many significant operational milestones and delivered industry-leading products and services, all while leaning into technology to propel us into the future. Our success is a testament to our robust business strategies and relentless focus on investing in innovation and technology. This commitment to continuous refinement positions us as leaders in financial services and enables us to capitalize on emerging opportunities to stay ahead of the curve.

2023 Annual Report

Specifically, technology has influenced every interaction at Connexus by: • Allowing us to be efficient and

effective in finding innovative solutions that benefit our members, employees, and communities.

• Providing limitless ways to help us

make impactful progress in a fastpaced world of digital change, fostering prosperity for members nationwide.

• Empowering us to nurture and sustain

our remote-first organizational culture, giving our talented employees the ability to work collaboratively across the country.

Looking ahead, we remain confident in our ability to leverage our solid foundation and further refine our technological capabilities for the purpose of providing our members with the value-driven products and services you expect from us. We are also deeply grateful to our dedicated employees, whose hard work and diligence are the driving force behind everything we do.

Together, we will build a bright future for all those we serve. Thank you for your continued trust in Connexus Credit Union.

Regards,

• Enabling us to make a meaningful,

positive impact while giving with purpose to our communities.

Alita Lobner, Board Chair

Boyd Gustke, President & CEO

• Helping us to continue serving

you—our valued member-owners— with the utmost confidence.

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We have things that other big banks can offer you—a Digital Banking platform that works well, beautiful branches, well-trained employees—but we also want to be close to you.

We don’t ever want to seem so big that we’re faceless.

The Connexus Vision

Graham, Connexus employee

To be a nationally relevant, trusted credit union, providing exceptional experiences and fostering prosperity for those we serve.

At Connexus, we’re committed to upholding and protecting our Vision. A guidepost for every strategic decision, we return to the statement any time we leverage new technologies, chart opportunities for growth, or search for ways to empower our talent. When we remain true to the Vision, it’s as though we hold a compass that ensures we make the right decisions for our members, our team, and the communities we serve. Throughout 2023, we returned to the words of our Vision and ensured that they underscored the work we were doing each day.

To see an example of our Vision in practice, please enjoy a short video vignette created by our Digital Banking Experience partner, Alkami. The video follows long-time member Gabrielle as she chooses Connexus for an important financing experience. Watch Gabrielle’s story here.

2023 Annual Report

When long-time member Gabrielle was in the market for a new car, she turned to Connexus for her financing.

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Intuitive, simple, and clean interface. A refreshing departure.

It’s clear that you designed your digital experience from a consumer perspective. Really well done.

Michael, Connexus member

Tech helps us navigate efficient growth.

Technology has afforded us opportunities to be a robust, progressive financial institution and provided us with the powerful insights needed to launch innovative member solutions and offer exceptional experiences.

In 2023, we began using AI to streamline member support.

We opened an innovative branch in Rib Mountain, Wisconsin.

Teams collaborated on projects that impacted member convenience and efficiency, including SMS (text message) technology enhancements and electronic document capabilities that provided member self-service options. We also launched a new loan payment platform that improved the payment experience across Digital Banking and our website.

214,000+ 33,100+ members using Digital Banking

daily Digital Banking logins, 12M+ annual logins

19%

4.7/5

84%

21,544

app rating on Google Play™ and Apple App Store®

improvement in new loan applicant satisfaction from 2022 to 2023

year-over-year increase in Digital Banking usage

direct member loans funded

We continued to increase parity between our website and Digital Banking environments, allowing members to make transactions, apply for deposit and loan products, and review insightful financial content while remaining in their authenticated Digital Banking environment.

Navigation enhancements in Digital Banking and the Connexus App allowed members to locate the most-used features quickly. Following these upgrades, 84% of users surveyed noted their ability to easily find what they needed.

2023 Annual Report

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Relevance, growth, and impact.

Nationwide.

My experience with Connexus can be expressed in one word: superb. Seamless, speedy, and efficient. Excellent service.

Ronald, Connexus member

Our sustainable, thoughtful growth strategy and exceptional member experience have earned us a 42% increase in membership within the past five years.

468,325

699

96,930

$5.3B

total members

employees

new members gained

in assets

Connexus membership spans all 50 U.S. states.

Number of members per state 10,000+ 6,000-9,999 3,000-5,999

1,000-2,999 0-999

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I can tell customer service is important to Connexus.

The help and support when I opened an IRA and did a custodial transfer was outstanding!

Tech helps us enhance the member experience.

Richard, Connexus member

Connexus remains committed to propelling responsible growth, continuing to be a careful steward of the trust placed in us by our members. We deeply value relationships with our members and have built our reputation on providing them with secure, reliable, exceptional experiences.

In 2023, we furthered our utilization of Voice ID authentication, offered through our partner Illuma. This advanced call center authentication method uses a member’s voice to biometrically authenticate their identity versus traditional question-andanswer verification methods. Members demonstrated 17% greater satisfaction on calls verified using Voice ID. By the numbers: Voice ID authentication

116,000

additional members enrolled

2023 Annual Report

77.2%

year-over-year usage increase

86%

reduction in call time when compared to traditional authentication methods

Watch: A Connexus Member Experience team member efficiently verifies a call using Voice ID authentication versus the traditional question-and-answer authentication methods. See the video here.

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Impactful Member Experiences

2023 Accolades

As we leveraged technology to uncover new ways to help our members prosper, we also remained focused on ensuring a positive impact at every interaction. Positive feedback from 35,000+ member experience surveys showed that our Member Experience team was professional, knowledgeable, and personable.

We were proud to offer extremely competitive yields on our deposit products throughout 2023, winning media mentions from websites like Forbes, CNET, Business Insider, and USA Today. In March, we were also honored with three prestigious awards from the Credit Union National Association for our excellence in marketing.

4.81/5.0 Lending Experience survey results

472,000+ inbound Member Contact Center discussions

2023 Best Credit Unions, Kiplinger Top 10 Credit Unions of 2023, Bankrate Best Banks and Credit Unions 2023, NerdWallet Best Home Equity Lenders of 2023, Bankrate Best Jumbo and 18-month Certificate Rates, Investopedia Best HELOC and Home Equity Loan Rates of 2023, USA Today Best Mortgage Lenders for Low and No Downpayments of 2023, Forbes Advisor 7 Best Free Checking Accounts of 2023, Money

Xtraordinary Checking Progress tool was launched to help members with Xtraordinary Checking track their progress toward earning our competitive yield.

2023 Annual Report

To read more about Connexus’ 2023 accolades and accomplishments, visit our Media Center.

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Tech helps us remain an employer of choice.

As a remote-first employer, leveraging technology has allowed our distributed teams to stay connected, work collaboratively, and continue to be excited about the important work they do. Our aim is to support and develop our employees, allow them to thrive personally and professionally, and remain a proud Employer of Choice.

Being an Employer of Choice isn’t just a title; it’s a reflection of how we treat each other—with respect, kindness, and a genuine desire to see everyone succeed. When we invest in our team, we’re investing in something special, creating a culture where everyone feels valued and inspired to bring their best selves to work every day.

Jenny, Connexus employee

Best-in-Class Employer as selected by Gallagher

In 2023, our internal teams further developed our Total Rewards strategy to continue offering competitive, comprehensive rewards packages that provide meaningful benefits to employees. Later in the year, nationally recognized employee benefits brokerage firm Gallagher named Connexus a 2023 Best-in-Class Employer based on our market-leading health plan enrollment and cost sharing, robust 401(k) and HSA offerings, and our Total Wellbeing program.

24%

of posted positions filled via internal promotion

97%

of employees active on our internal social engagement platform, Limelight Our remote-first culture allows Connexus to embrace talent from across the nation.

2023 Annual Report

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Good website, great customer service, and better security than other institutions I am familiar with.

Wayne, Connexus member

Tech helps us make proactive business decisions.

Embracing technological advancements allows Connexus to remain the secure, robust, trusted institution that our members have relied on for nearly 90 years.

In 2023, we: • Continued to advance the implementation of our industry-leading

Voice ID biometric authentication in our Member Contact Center, providing members with enhanced security when calling.

• Automated our loan communications, providing members with a

more streamlined experience.

• Implemented multi-layered network redundancies designed to

reduce outages or downtime within our branches.

• Completed comprehensive inter-departmental projects designed

to move the development of certain digital features “in-house,” reducing reliance on third parties.

Watch: A Digital Banking feature gives members the ability to freeze and unfreeze their debit cards in the case of loss, theft, or fraud.

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When we started the volunteer work, there was an incredible energy and camaraderie in the air. Soon the adage ‘many hands make light work’ proved true—the time flew by, and we accomplished amazing things—working together for a common purpose to make a difference in the lives of others.

Giving with purpose.

Connexus Cares, our philanthropic program, continued purposeful giveback throughout 2023. We focused our resources on six strategic areas of giving: At-Risk Populations, Community Wellbeing, Food Insecurity, Housing Insecurity, Mental & Physical Health, and National Charities.

Our Volunteer Time Off (VTO) program offers Connexus employees 16 hours of VTO annually. In 2023, staff volunteered a record number of 5,135 hours, giving their time selflessly to the causes most meaningful to them. Through our corporate donation matching initiative, we also matched over $46,000 in employee donations.

Don, Connexus employee

In 2023, Connexus Cares: • Supported more than 320 local and national

non-profit organizations.

• Donated $177,021 to 11 non-profits during our annual holiday

Season of Giving campaign.

• Launched a formal Digital Grant Application that allows our team

to better understand the needs of our communities.

• Partnered with the Wausau School District to commit $120,000

over the next three years to address student mental health.

Our commitment to philanthropy will always be a fundamental tenet of our philosophy, inextricably woven into the culture of Connexus.

We remain deeply grateful for how our employees and community partners have made it possible for us to drive impactful change nationwide, and we look forward to continuing this vital facet of our work well into the future.

$11,717,306

Total Connexus Cares Giveback since 2019

2023 Annual Report

Enjoy a visual retrospective and learn about our philanthropic efforts in the 2023 Connexus Cares Impact Report.

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Financial Summary Balance Sheet Assets Cash & Investments Loans, Net Fixed Assets, Net NCUA Share Insurance Fund Deposit Other Assets Total Assets Liabilities Share & Savings Accounts Borrowed Funds Accrued Expenses & Other Liabilities Total Liabilities Members' Equity Undivided Earnings Acquired Equity Accumulated Other Comprehensive Income Total Members' Equity Total Liabilities and Members' Equity

2023 $ 451,466,881 4,589,387,155 39,951,718 40,638,351 181,890,311 $ 5,303,334,416

2022 Income Statement $ 337,712,793 4,689,014,778 35,480,634 37,611,506 164,286,511 $ 5,264,106,222

$ 4,796,888,991 10,000,145 50,915,896

$ 4,603,708,720 120,027,947 38,060,866

4,857,805,032

4,761,797,533

280,529,384 165,000,000

338,757,454 165,000,000

-

(1,448,765)

445,529,384

502,308,689

$ 5,303,334,416

$ 5,264,106,222

Interest Income Loans Investments Total Interest Income

2023

2022

$ 339,072,152 22,140,042

$ 302,152,171 4,426,854

361,212,194

306,579,025

Interest Expense Share & Savings Accounts Borrowed Funds Total Interest Expense

145,125,538 7,837,979

69,055,568 4,173,740

152,963,517

73,229,308

Net Interest Income Provision for Loan Losses

208,248,677 62,954,393

233,349,717 35,953,957

Net Interest Income After Provision for Loan Losses

145,294,284

197,395,760

Non-Interest Income

31,757,958

22,771,622

Non-Interest Expense

165,323,312

175,267,674

$ 11,728,930

$ 44,899,708

Net Income

Supervisory Committee: Timothy C. Mulloy (Chair), Greg Cullen, Steven C. Derebey, Michael Parker, and Michael Prestileo.

Federally Insured by NCUA

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Tech helps us confidently continue.

What tech can’t give us (yet) is a definitive look into the future.

However, based on where we’ve been, we know where we’re going— and that direction has us poised for sustainable growth and a steadfast continuation of the care and service our members expect.

Our confidence comes from our track record as a trusted, nationally relevant credit union. For close to 90 years, we have fostered prosperity and delivered exceptional experiences to each member, at every interaction. We have done this by investing in our employees, continually improving our culture, and thoughtfully capitalizing on advancements that allow us to provide simple, reliable, and relevant service to our members.

Our membership can trust that we will adhere to these values as we navigate digital and technological advancements—today and well into the future.

Board of Directors Alita Lobner, Board Chair Kelsi Seubert, Vice Chair Shanna Yonke, Secretary & Treasurer Greg Cullen, Director Steven C. Derebey, Director Timothy C. Mulloy, Director Michael Parker, Director Michael Prestileo, Director

Senior Leadership Team Boyd Gustke, President & Chief Executive Officer Chad Rogers, Executive Vice President & Chief Operating Officer Akin Agar, Chief Technology Officer Ryan T. Gage, Chief Risk Officer Kim Gamez, Chief Financial Officer Cheryl Halverson, Chief Human Resources Officer Eric Huseby, Chief Lending Officer Adam Keer, Chief Institutional Lending Officer Brian Gourlay, Senior Vice President of Credit Risk Management Laura Huggins, Senior Vice President of Marketing Claire Meney, Senior Vice President of Member Experience

To learn more about our Board of Directors and Senior Leadership Team, please visit our website.

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800.845.5025 ConnexusCU.org info@connexuscu.org PO Box 8026 Wausau, WI 54402-8026

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