2022 Annual Report

2022 ANNUAL REPORT Sharefax Credit Union is a cooperative formed for the sole purpose of improving the financial well being of our members.

Chairperson's Report

DENNIS MESSER

Although we just met back in October, Sharefax is excited to host our normal springtime annual meeting. Sharefax has managed to grow and stay strong in our endeavors throughout the pandemic and recovery. Sharefax has persevered thanks to the loyalty of our members and our dedicated management team and employees.

To keep members connected to their savings, checking and investment accounts, Sharefax continues to provide electronic products including online banking, mobile app, and more. Our mission is to improve the financial well being of our members. We hope to continue to provide innovative products and services to meet and exceed our members’ expectations.

We are all looking forward to a prosperous and exciting future in 2022.

Dennis Messer Credit Committee Report

C. DAVID TAYLOR

The primary function of the Credit Committee is the supervision of loans to the members in an effort to ensure the safety and soundness of Sharefax Credit Union’s loan portfolio.

Keeping with the credit union’s philosophy of providing affordable loan opportunities to its members, Sharefax approved 4794 loans during 2021 for a total amount of $147,287,995.23.

Loans outstanding increased by 11.8% for total outstanding of $316,752,892. Loans versus savings increased to a ratio of 73.75% at year end. Our delinquency ratio was 0.13% on December 31st.

We extend our sincere appreciation to our members for their continued support of our products and services.

Respectfully,

C. David Taylor BOARD OF DIRECTORS

Denny Messer Chairperson

Susan Ochs Treasurer

Dan Murphy Secretary

Dave Aaronson

Mark Fox

Janet Lake

Monica Palkovic

C. David Taylor

Message from the President ARTHUR KREMER The credit union has experienced a string of financial successes over the past few years including posting a strong financial performance in 2021 with total loans outstanding increasing by over 11% and total shares surging by 10.6%. Even better, the delinquency rate recorded a historical low of .13% for December.

These are impressive numbers especially when you consider that Sharefax was operating in a difficult environment while transitioning to a new corporate office. These accomplishments are a credit to the hard work and commitment of our employees. It should be especially noted that our growth was very balanced between shares and loans, which was critical in maintaining our strong net worth ratio.

The credit union also produced non-financial successes in 2021. Many of which had been on our planning board for some time such as the introduction of instant issue debit cards at all of our branches, early access of all ACH credits, not just payroll, for up to two days in the future, and just recently increasing the amount a checking account can go negative to $30 while avoiding a fee. The credit union also partnered with a fintech company to create a landing page for preapproved loans to be offered to our members for easy acceptance.

Although it was a minor disappointment, Sharefax did experience a slight decrease in mortgage lending. There were several reasons for this decline, not the least of which being the lack of housing inventory in the market. Competition is also a large reason with many online lenders offering low or even no closing costs. This mortgage decline may not improve since interest rates are increasing significantly in 2022 raising payments and making good housing unaffordable for some. In addition, the credit union can expect even more competition for online mortgage lending as more non-traditional competitors enter the market. Overcoming these obstacles will be a challenge, but the increase in the number of Millennials looking to purchase their first home should help lessen the impact.

There are other challenges facing Sharefax in 2022. Rising interest rates predicted by many economists to increase as much as six more times this year is the primary concern. Such a swift increase will cause net income margins to decrease for the short term before assets can reprice to offset the rise. Another challenge is the rapid shift towards electronic banking, which to a large part is a result of the pandemic. This trend will place even more pressure on Sharefax to invest in expensive online solutions. Not to make these investments would hinder our growth opportunities in the future. The larger problem will be managing these new expenses within our budget.

Although, management has planned for these investments, inflationary pressures caused by supply chain disruptions, employee shortages, rising gas prices, and the war in Ukraine have made operating costs more expensive than expected and more difficult to control.

In addition, the historically low unemployment numbers have provided leverage to individuals in the job market and created more opportunities for employees to change careers. Sharefax is not immune to this problem. Although, for the most part, our staff has been committed to our organization and appreciative of the benefits provided by the credit union. Retaining and attracting employees is still a challenge and will be a focus of the credit union in 2022 especially since a stable, diverse workforce is critical in implementing our strategic plans.

Even while facing these hurdles, the credit union is starting the new year encouraged about the future and with a new sense of purpose.

Our theme for this year is “All systems are Go”, which reflects our commitment to reengage the community as the pandemic is ending.

For two years, many of the community events, in which Sharefax typically participated, had been canceled, and the charitable fund raising of the past has been conducted virtually. A reengagement will allow for Sharefax to have more of a presence in the community and hopefully result in improved membership growth.

As we move forward in 2022, the Board of Directors has ambitious plans for installing a new e-alert system to allow for interactive engagement within a member’s accounts, offering a new overdraft line of credit called Safety Net, improving our mobile banking product with added features to better manage a member’s plastic cards, and investigating the possibility of offering cryptocurrency in the future.

These are all services desired by our members but will take a large investment of resources to accomplish.

Thankfully, our commitment to our mission and our vision of the future remains clear. Although, there will be challenges, the credit union has been preparing during the past two years for life after the pandemic by laying the groundwork and positioning itself for growth. Our recent investments in technology, a new corporate office, and updated branding have primed the credit union for success. Now we must build upon these investments and the foundation that we have laid to fully realize our destiny and fulfill our promise of improving the financial wellbeing for our members.

Our members should note that the credit union hopes to reach the one-half billion in assets later this year. This would represent the credit union almost quintupling in size since 2000 without relying on large mergers to accomplish this feat. This is quite an accomplishment and something the membership should be very proud of since without their loyalty and commitment, Sharefax could never have had such success. .

Art Kremer