2022 Financial Update by GBULife

2022 Financial Update

, GBU Life (GBU) was able to enhance its finance capabilities with an eye toward both the present and the future in an increasingly complex economic environment. We continue to build on our core strategies that have enabled GBU to maintain its strong financial position and provide the security that our members deserve.

In2022

GBU exceeded $500 million in premiums for the first time in 2022. This is a great accomplishment; however, it comes with the obligation to comply with two additional regulations.

The first of these regulations is called Own Risk and Solvency Assessment (ORSA). An ORSA is an internal process under taken by an insurer to assess the adequacy of its risk management in addition to its current and prospective solvency positions under normal and severe stress scenarios. An ORSA will require us to analyze all reasonably foreseeable and relevant material risks (i.e., underwriting, credit, market, operational, liquidity risks, etc.) that could have an impact on our ability to meet our member obligations. This requirement must be done annually beginning in 2023.

The second regulation, Section 16 of the Model Audit Rule, requires management to file a report on our internal controls over financial reporting. This regulation is similar in nature to the Sarbanes-Oxley regulations required of publicly owned corporations. The required report will need to be filed annually with the first filing due in conjunction with the filing of 2024 audited financial statements.

GBU is well positioned to comply with these regulations. We added a director of enterprise risk management to our finance team in 2022 in anticipation of the need to comply with these regulations. The work required to comply with these regulations is well underway and will further enhance our ability to foresee, understand and mitigate the risks that are inherent in the insurance industry. The end result of GBU’s compliance with these new regulations is to take the overall strength of our society to a higher level.

Page 1 of 2 GBU-FIN-RPT-0623-V2 Phone: 412-884-5100 | 800-765-4428 | service@gbu.org | gbu.org

4254 Saw Mill Run Blvd., Pittsburgh, PA 15227

Note: Numbers Are in Millions (000 Omitted for Rounding)

Capital and Surplus Account

Mark Cloutier Chief Financial Officer

About the numbers

GBU’s 2022 statutory financial results continue to reflect our strong operating performance and the ability to build on our strong financial position. Assets increased 11.2% to $4.2 billion, while our liabilities increased similarly 11.4% to $3.9 billion. Reserves for annuity contracts made up $3.6 billion of the liabilities supported by investment in bonds of $4.0 billion. Our surplus remained very strong at $288.8 million, an increase of 8.5%. GBU’s current solvency ratio is 107.4%. This means for every $100 of liabilities, there is $107.40 of assets.

Net income from operations for 2022 was $32.5 million, which was $6.1 million higher than for 2021. Total revenues for the year were $768.1 million, an increase of $120.4 million over the 2021 figure; this increase was driven by strong annuity sales. GBU continues to have an exceptional cash flow from operations. For 2022, cash flow from operations was $426.1 million, an increase over the 2021 total, which was $349.9 million.

As we move into the future, GBU management will continue to prudently grow our society and expand the programs available to our members for their community development efforts while strengthening our already solid foundation. We are proud to deliver sound, consistent value as a conservative steward of our members’ wealth during these turbulent economic times. We thank you for your trust.

GBU Life is the marketing name for GBU Financial Life (GBU), Pittsburgh, PA

Page 2 of 2 GBU-FIN-RPT-0623-V2

Assets 12/31/2022 12/31/2021 Amount Amount Bonds $ 3,971,541 $ 3,614,210 Preferred & Common Stocks 525 201 Mortgages, Contract Loans, Other Invested Assets & Real Estate 133,847 76,110 Cash 47,881 44,409 Investment Income Due & Accrued, Uncollected Premium & Amounts Recoverable from Reinsurers 50,974 46,793 TOTAL ASSETS $ 4,204,768 $ 3,781,723 Liabilities and Unassigned Surplus 12/31/2022 12/31/2021 Amount Amount Reserves for Annuity Contracts $ 3,586,486 $ 3,206,267 Reserves for Life Contracts 161,684 145,651 Deposit-Type Contracts 74,434 72,297 Policyholders’ Claims 30,202 25,317 Refunds Payable 1,100 1,100 General Expenses Due & Premiums Received in Advance 2,518 1,719 Interest Maintenance Reserve 4,554 14,598 Amounts Withheld or Retained by Society 17,781 16,921 Asset Valuation Reserve 37,000 30,000 Payable for Securities - 555 Underfunded Benefit Obligation 244 1,186 Total Liabilities $ 3,916,003 $ 3,515,611 Unassigned Surplus $ 288,765 $ 266,112 TOTAL LIABILITIES AND UNASSIGNED SURPLUS $ 4,204,768 $ 3,781,723

For the 12 Months Ending December 31 2022 2021 Capital and Surplus, December 31, Prior Year $ 266,112 $ 248,146 Net Income 32,292 26,406 Change in Net Unrealized Capital Gains (Losses) (2,659) 59 Change in Non-Admitted Assets (1,950) (2,361) Change in Asset Valuation Reserve (6,859) (6,000) Change in Net Pension Liability 1,167 (138) Other Changes (153)Change in Beginning Surplus Due to Mergers 815Net Change in Capital and Surplus 22,653 17,966 CAPITAL AND SURPLUS AS OF STATEMENT DATE $ 288,765 $ 266,112 Summary of Operations For the 12 Months Ending December 31 2022 2021 Revenue Life Premium $ 7,489 $ 8,189 Annuity Considerations 578,331 477,705 Net Investment Income 181,255 160,141 Amortization of IMR 1,033 1,523 Other 15 132 Total Revenues 768,123 647,690 Expenditures Payments to Members 330,645 298,727 Increase in Reserves 369,303 294,142 Commissions, General and Admin 34,562 27,398 Refunds to Members 1,119 1,070 Total Expenditures 735,629 621,337 Net Gain from Operations before Realized Capital Gains (Losses) 32,494 26,353 Net Realized Capital Gains (Losses) (202) 53 NET INCOME $ 32,292 $ 26,406