Driven by Purpose — 2023 Annual Report from Elements Financial

2023 Annual Report

Driven by Purpose

A Letter from Our Leadership Serving our Community Since 1930

Since 1930, Elements has been committed to serving our community. Seven years ago, this dedication inspired the creation of Purpose Day — a special time when our employees unite to serve the causes we care about. These causes are organized under our 3 Pillars of Giving: Homelessness & Housing, Healthy Lifestyles, and Youth Development.

Want to see our purpose at work? Watch the video recap at the QR code to learn more about Purpose Day 2023.

Dear Valued Members: It’s an honor to represent the Board of Directors and Executive Team of Elements Financial as I introduce our 2023 Annual Report. Even with the market challenges of inflation and higher loan interest rates, Elements maintained strong financial metrics and member satisfaction scores throughout last year. While keeping the needs of our members at the forefront, we excelled in many areas of our business including the following: > E xceptional Asset Quality resulted in Charge Offs at 0.13% during 2023 and Delinquency at 0.21% at year end. > A n Improved Capital Position took us to 9.74% in 2023, increasing our capital ratio by 0.42%. > Net Income for the year totaled $14.3 million, an increase of $4.1 million (40.4% higher than 2022). >M ember Dividend Shares amounted to $36.2 million in 2023, an increase of $21.3 million during the year, representing growth of 142.6%.

At all points, our purpose endured: Empowering members to achieve financial success. This all-encompassing goal drives the daily efforts and decisions at the credit union, especially when paired with the Elements of Success — company values which serve as guideposts for our leadership and for all employees: > Communication & Collaboration > Community > Diversity, Equity, Inclusion, & Belonging

> Respect > Service > Trust & Integrity

In 2023, we were fortunate to have the opportunity to continue impacting our surrounding communities. Please use the QR code in this report to view an award-winning video which highlights our 7th Annual Purpose Day when we conducted projects with various local nonprofit partners, including DAMAR, Growing Places Indy, and Little Red Door Cancer Agency. Every year in October, the credit union closes for one full business day to give back to the community as a collective group.

In closing, I welcome John Huesing to Elements as Interim Chief Executive Officer for an extended transitional period. John is an experienced finance professional who served on our Board of Directors for 10 years. He brings a wealth of knowledge and expertise to this position, coupled with a strong track record of leadership from his most recent role as Vice President and Treasurer at Indiana University Health and formerly as Assistant Treasurer at Eli Lilly and Company. He is a natural choice to guide the credit union at this time. To learn more about John, visit elements.org/NewLeadership.

Thank you for your loyal business with Elements,

Mark Saltsgaver Chair of the Board

I’m proud of this organization and thrilled to serve in an increased capacity for the credit union. My service on the board has allowed me to see the tremendous talent and dedication we have at Elements. It’s an honor to be asked to play a more direct and daily role in shaping the future of the credit union. ~ John Huesing

Consolidated Statement of Financial Condition Selected Data in Millions

Assets

2023

2022

Cash and Investments

$657.2

$661.9

Loans to Members

1,609.5

1,567.2

Allowance for Loan Losses

(15.8)

(12.8)

Other Assets

68.1

73.3

Total Assets

$2,319.0

$2,289.6

$1,866.2

$1,825.0

Other Liabilities

295.1

332.7

Members’ Equity

157.7

131.9

$2,319.0

$2,289.6

Net Worth Ratio

9.74%

9.32%

Risk Based Capital Ration

16.00%

15.35%

Total Liabilities and Members’ Equity

NCUA Net Worth Ratio of 7% or above is considered “Well Capitalized” and NCUA Risk Based Capital of 10% or above is considered “Well Capitalized”

Selected Data in Millions

2023

2022

Interest Income from Loans and Investments

$95.3

$67.1

Interest Expense on Member Accounts and Borrowed Funds

(48.4)

(20.0)

Loan Loss Provision

(2.6)

(2.1)

Net Interest Income

$44.3

$45.0

Other Income

22.6

18.9

Operating Expense

(53.5)

(49.2)

0.9

(4.5)

$14.3

$10.2

Net Income

Mark Saltsgaver Board Chair Secretary

John Huesing Treasurer

Jeremy Fitch Alice Morical Jody Roudebush Lindsay Konradi Robert Paz Kelly Wiggins-Payne

Supervisory Committee

Consolidated Statement of Income

Non-Operating Income / (Expense)

Elements Financial is guided by an active board of directors comprised of the following.

Donald Zakrowski

Liabilities and Members’ Equity Share Savings, Drafts, and Certificates

Board of Directors

In management’s opinion, the selected financial data presented herein is free of material error and accurately reflects the financial position and/or results of operations of Elements Financial for the periods presented. Members may request a complete copy of our audited financial statements by calling (800) 621-2105. A credit union must have a Net Worth to Assets ratio of at least 7.00% to be considered “Well Capitalized” by the National Credit Union Administration.

The following committee members work with the Board of Directors and Executive Management to ensure member assets are safeguarded and financial reporting objectives are met. This is accomplished by overseeing the internal audit program and utilizing an external auditor to audit the financial statements.

Daryl Soughan Committee Chair

Michele Sawyer David Pugh Ben Clark Jeremy Lantz

Like a Bank, Only Better.

225 South East Street, Suite 300 Indianapolis, IN 46202 (800) 621-2105 elements.org

Federally Insured by NCUA