Pantex FCU 2020 Annual Report

Pantex Federal Credit Union 2020

Annual Report

It ’s so easy!

Applying for a loan from Pantex Federal Credit Union is a quick and easy process!

Applications can be made through one of our convenient branches or on the PFCU website from either your computer or mobile device, both areg safe and h secure!

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Why PFCU? “There are about 16,000 reasons for ‘Why PFCU?’ We exist for the benefit of our members, all sixteen thousand of you.” ~ Cliff Murley - President/CEO

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Meeting Agenda Call to Order (7:00 p.m.)

Reading of the Previous Minutes Reports from Officials

Board of Directors Allen Jenkins Chairman Harvey Hilbert Vice-Chair Debra Wells Treasurer Glynn Carlock Secretary Larry Thompson Fran Braden Lynn Hopkins

Old Business New Business Election of Officials Drawing of Door Prizes Adjournment 4

Supervisory Committee Sara Ramby Chairperson Judy Flanders Tina Briscoe Addison Killough

Professional Staff Cliff Murley President/CEO Curtis Hall Executive Vice President Dana Slater Vice President/Accounting Rodney Franklin Branch Manager-Fritch Carrie West Senior Loan Officer Dana Martin Branch Manager-Walmart Shannon Mears Loan Officer Shelby Overpeck Loan Officer Michael Robinson Vice President of IT Mikel Cauthon Network Administrator Tanya Fraley Asst. Vice President of Member Services

Alicia Morgan Asst. Vice President/Tellers Dusty Lee Branch Manager-Pampa Robert Forester Marketing Director Linda Watson Imaging/Internet Banking Carla Howard Plastic Cards/Imaging Tiera Lesley Branch Head Teller-Fritch Kim Hughes Asst. Head Teller Brittney McWilliams Accounting Assistant Ginnie Whitfield Branch Head Teller-Walmart Karen Bryan Loan Processor/Assistant Brook Hubbard Loan Processor/Assistant

Tellers Kalee Alvarez Desy Barraza SueAnn Broadaway Tonja Brown Lisa Bryan Sarah Elliott Jennifer Farmer Maranda Grimes Regan Huff Ebony Jarrett Charlotte Jasper Lydia Kaylor Lucy-Marie Spoon Krisha Temple Candace Velasquez Mistee Williams Rebecca Wilson Nilzaida Wood Kenny Green Facilities 5

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Letter from the President Why PFCU? There are about 16,000 reasons for “Why PFCU.” We exist for the benefit of our members, all sixteen thousand of you!

Pantex FCU members enjoy higher savings rates, lower loan rates, and fewer fees than they get from “for-profit” financial institutions, plus no hidden costs. That is real money in your pockets or in your checking and savings accounts.

We enable dreams. What do you want to work toward? We will help you get there.

We help you to be successful, and then you help our communities be successful.

We believe that strong members, makes a strong community, and the stronger the community, the stronger our members. At Pantex FCU, our employees care about our members and their families. As one member said, “I’ve been with Pantex Federal Credit Union for over 30 years, always great service and great people.”

Pantex FCU is helping members through the pandemic, including offering skip-apayment options and hardship loans as we have done in other crises for our members. Offering SBA, Payroll Protection Program (PPP) Loans to our small business owner/members. Empowering financial well-being is what we do.

Thank you for telling your friends and family about Pantex Federal Credit Union.

Given the collective impact made by our members, our team at Pantex Federal Credit Union, and our Board of Directors, a tougher question for you to answer, would be... “Why NOT PFCU?” Respectfully submitted,

“

...a tougher question for you to answer, would be...

“Why NOT PFCU?”

”

Cliff Murley, President/CEO 7

Chairman’s Report On behalf of the Pantex Federal Credit Union Board of Directors, staff and committee members, I wish to welcome you to our 80th Annual Membership meeting.

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COVID-19

The information provided in our annual report will give you a detailed look into our 2020 operations. It was a challenging year, to say the least. COVID-19 has created new and immediate needs for the credit union and our members. Rapidly transitioning to serving members with reduced branch availability and supporting members in financial distress through deferments, emergency lending and more creative, tailored arrangements.

has created

The COVID-19 crisis has accelerated and intensified many already existing trends.

The transformation of service delivery to accommodate remote financial services has accelerated the importance of digital financial services and will result in the remaking of the branch and member experience for the future.

needs

We want to take this opportunity to thank our members for the patience and understanding that they have shown PFCU as we have adapted to this new environment.

Regardless of the challenge presented to us, our staff and leadership of the Credit Union continually strive to provide the utmost level of service to all of our members.

Respectfully submitted, Allen Jenkins, Chairman 8

new and immediate

for the credit union and our members.

”

Safe.

Secure.

Access to your Pantex FCU accounts really is “just a click away!”

Pantex FCU accounts can by accessed at any time, from anywhere by using Pantex FCU Online Banking or the Pantex FCU mobile Banking app.

Visit www.pantexfcu.com for more information.

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Treasurer’s Report As members of your volunteer board, we have the responsibility of ensuring your credit union is safely and soundly operating. We are charged with ensuring the institution has a solid f inancial foundation. 2020 was a diff icult year. The pandemic effects caused increased operating costs and the rapidly decreasing interest rate environment and low loan demand have negatively impacted revenue.

A recovery of previous Corporate credit union losses and controlled expenses helped us realize better than expected earnings in this pandemic environment.

The credit union has an exceptionally strong capital ratio of 18.62%.

I’m proud to say Pantex FCU continues to be one of the strongest f inancial institutions in our state and we owe this to our employees, leadership and in your participation.

Member Return:

• Share dividends totaled $1,286,329.76 • Represents a return to the membership of 12.0% of total income earned by the credit union in 2020.

Of the remaining income, 83.5% was distributed to the normal cost of operating the Credit Union, and 4.5% was placed in statutory reserves to keep capital levels strong. PFCU has maintained a 5-Star Bauer Rating for over 22 years.

Pantex FCU’s investment portfolio consists of deposits in other institutions, primarily Catalyst Corporate Credit Union, Federal Reserve Overnight Accounts and in United States Agency securities. The credit union only invests in only the types of investments approved by the National Credit Union Administration.

Respectfully submitted, Debra Wells, Treasurer 10

$1,286,329.76 Total Share Dividends Paid Represents a return to the membership of 12% of total income earned by the Credit Union in 2020.

4.5% Statutory Reserves

PFCU 2020

83.5% Operating Costs

Loan Officers Report The Loan Off icers are responsible for objectively evaluating the f inancial needs of the members, while at the same time protecting the interest of the depositors/shareholders by making safe and sound lending decisions.

During the year 2020, PFCU members received 1,725 loans totaling $27,862,503.77.

Total loans outstanding decreased 2.00% over the previous year. The credit union worked with members effected by the pandemic with hardship loans, loan payment extensions and other repayment options. The credit union even worked with the SBA to offer PPP Loans to members with effected small businesses.

We are proud to say we achieved strong credit quality, and you can be sure PFCU is among the safest banking institutions around.

Whether you’re thinking about purchasing a new car, remodeling your home, or taking the trip of a lifetime, Pantex FCU has a consumer loan option to make it possible. Our loan experts are ready to help you make the best loan choice for you and your needs.

Loans on New and Used Vehicles!

Apply online or through the Pantex FCU mobile app.

Respectfully submitted, Curtis Hall, Rodney Franklin, Carrie West, Shannon Mears, Shelby Overpeck, Dusty Lee, Dana Martin and Ginnie Whitf ield 11

Supervisory Committee Report The Pantex Federal Credit Union Supervisory Committee is responsible for independently assessing the soundness of the credit union’s operations and financial status. Internal controls and policies are evaluated by the Supervisory Committee through reviews of the records of the credit union. The Supervisory Committee also works with external auditors by reviewing their audit reports, as well as regulatory examination reports by the National Credit Union Administration.

Waypoint Advisory Services, LLC, was hired in 2020 to perform a comprehensive annual review of the credit union’s financial statements. They also performed quarterly internal control reviews and reported back directly to the Supervisory Committee.

The credit union successfully underwent three additional audits or examinations during the year: An Information Technology and Security Risk Assessment Audit, an ACH procedural audit, and a Bank Security Act/OFAC Act audit.

Pantex FCU recognizes its responsibility to conduct business in accordance with high ethical standards. These audits and examinations are designed to provide the proper “check and balance” system to demonstrate to the committee, board, management, and therefore to the membership, that proper procedures, regulations and board policies are being followed.

Respectfully submitted, Sara Ramby, Chairperson 12

Nominating Committee Report In accordance with the Pantex Federal Credit Union Policy Manual, to be nominated for a position as a director or committee member, a person must meet certain qualifications. They must possess knowledge, experience, or interest pertinent to the credit union’s future; have a good credit standing and no criminal convictions; been a member of the credit union for at least two years; be willing to accept the responsibilities of the position; be objective and independent; and not be an employee of this or a competing institution; and be at least 18 years of age.

Two 3-year terms are available for re-election on the Board of Directors. The positions currently held by Lynn Hopkins and Harvey Hilbert are up for election.

The Nominating Committee, composed of three members, has recommend that Lynn Hopkins and Harvey Hilbert be elected to the Board of Directors for these three-year terms.

After posting these names in the lobby of the credit union, and receiving no petitions for nomination prior to the deadline, the committee recommends that the individuals named above be accepted by the membership.

Respectfully submitted, Debra Wells, Chairperson of the Nominating Committee 13

Statement of Income & Expenses

Distribution Of Income

Operating Income DEC. 31, 2020

DEC. 31, 2019

Interest on Loans

$3,174,442.04

$3,238,456.93

Interest on Investments

$2,430,217.25

$3,313,950.57

Misc. Operating Income

$2,322,803.07

$1,897,301.81

Total Operating Income

$7,927,462.36

$8,449,709.31

Represents a return to the membership of 12% of total income earned by the Credit Union in 2020.

4.5% Statutory Reserves

PFCU 2020

83.5% Operating Costs

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Operating Expenses DEC. 31, 2020

DEC. 31, 2019

$2,700,874.97

$2,663,265.65

$9,917.09

$19,622.42

$13,450.00

$12,349.00

Office Occupancy Expenses

$294,645.65

$286,166.36

Office Operations Expenses

$718,350.07

$716,854.76

$49,795.15

$55,447.31

Loan Servicing Expenses

$831,909.67

$778,637.21

Professional & Outside Services

$704,135.50

$613,109.64

Provision for Loan Losses

$165,090.38

$136,130.24

$59,822.29

$57,551.81

-$932.68

-$107.66

Compensation and Employee Benefits Travel & Conference Expenses Association Dues

Education/Promotional Expenses

Federal Supervisory Exam Expenses Cash Short/Over

Continued

Fraud Reminder!

Pantex FCU will NEVER call and ask for personal or banking log-in information! This includes social security numbers, complete card numbers, passwords, PIN (number), or one time pass or one time confirmation codes. Please consider questions like these as a “red flag.” Hang up and call Pantex FCU as soon as possible!

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Operating Expenses Continued

Do you follow us?

DEC. 31, 2020 Annual Meeting Expenses

$12,396.99

$14,472.88

Miscellaneous Operating Expenses

$87,422.09

$50,109.38

Total Operating Expenses

$5,646,877.17

$5,403,609.00

Net Income from Operations

$2,280,585.19

$3,046,100.31

Gain (Loss) on Disposal of Assets

($3,214.15)

$266.00

Other Non-Operating Gain (Loss)

$0.00

$0.00

$1,286,329.76

$1,803,130.41

$991,041.28

$1,243,235.90

Dividends Net Income

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DEC. 31, 2019

Statement of Condition Assets DEC. 31, 2020

DEC. 31, 2019

$53,203,286.09

$54,327,044.19

$3,500,889.73

$3,971,289.07

$158,993,870.34

$148,066,023.75

$6,764,900.08

$3,874,475.86

$7,777,780.94

$7,722,032.60

$94,093.82

$94,093.82

Building

$896,713.96

$963,567.23

Furniture & Equipment & Leasehold

$403,274.52

$528,021.62

$231,634,809.48

$219,546,548.14

Loans (net) Cash on Hand and in Banks Investments Shares: Catalyst Corporate Other Assets Land

Total Assets

Continued

You should!

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Statement of Condition Continued Liabilities & Equity DEC. 31, 2020

DEC. 31, 2019

$1,890,478.76

$1,348,683.56

$0.00

$0.00

$147,783.81

$120,962.09

$2,038,262.57

$1,469,645.65

$184,843,316.49

$175,257,819.50

$9,596,199.99

$9,596,199.99

$1,617,907.74

$674,801.59

$33,539,122.69

$32,548,081.41

Total Equity

$229,596,546.91

$218,076,902.49

Total Liabilities & Equity

$231,634,809.48

$219,546,548.14

Accounts Payable/Items in Transit Accrued Dividends Payable Accrued Liabilities Total Liabilities Shares Regular Reserve Accumulated Unrealized Gain (Loss) on AFS Securities Undivided Earnings

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Fraud Reminder!

Pantex FCU will NEVER call and ask for personal or banking log-in information! This includes social security numbers, complete card numbers, passwords, PIN (number), or one time pass or one time confirmation codes. Please consider questions like these as a “red flag.” Hang up and call Pantex FCU as soon as possible!

MAIN OFFICE 1300 W. Wilson Borger, Texas (806) 273-5692

PAMPA BRANCH 807 N. Sumner Pampa, Texas (806) 665-4212

FRITCH BRANCH 411 E. Broadway Fritch, Texas (806) 857-2400

WALMART BRANCH 1501 Roosevelt Borger, Texas (806) 273-5698

HOURS Monday–Friday 9:00 am to 5:00 pm Drive Thru 8:00 am to 6:00 pm

HOURS Monday–Friday 9:00 am to 5:00 pm Drive Thru 9:00 am to 5:00 pm

HOURS Monday–Friday 9:00 am to 5:00 pm Drive Thru 8:00 am to 6:00 pm

HOURS Monday–Friday 9:00 am to 7:00 pm Saturday 9:00 am to 4:00 pm

Mailing Address: P O Box 5206 Borger, TX 79008 Email: PFCU@PantexFCU.com Website: www.PantexFCU.com 19

www.PantexFCU.com