2023 Impact Report

IN THE VALLEY WE CALL HOME

The 2023 Valley First Credit Union Impact Report is a heartfelt reflection of our journey in nurturing the communities we cherish.

Within these pages, we share the stories of how we’ve worked hand in hand with our members, staff, and neighbors to foster positive change in the valley we call home.

"Our mission is to navigate our members on their path to financial well-being."

Our accomplishments are rooted in the support of our members - the foundation of our credit union’s accomplishments. Their trust and collaboration drive our mission to uplift our community’s financial landscape. As a result, we maintain our commitment to providing accessible financial solutions, including reduced fees, competitive savings rates, and affordable loans. This partnership forms the cornerstone of our credit union’s identity.

At the heart of our success lies our commitment to responsible financial management. This report reaffirms our dedication to responsibly managing risk and safeguarding the financial well-being of our members. With careful stewardship of our resources, we prioritize their security and stability.

Valley First Credit Union is more than just a financial institution; we are neighbors supporting neighbors. Our deposits come from the very communities we serve, and our loans fuel the growth of local businesses we frequent. Every decision we make is guided by the principle of treating our members with the utmost care and respect they deserve.

Thank you for entrusting us with your financial journey and for joining us in our shared commitment to creating positive change in the Central Valley. Together, we can continue to make a meaningful difference in the lives of those we serve.

OUR PROMISE

We are deeply moved by the opportunity to positively impact our members’ lives—and driven by the realization that it happens every day at Valley First.

We strive to understand and meet our members’ financial needs without judgment, fostering their journey towards financial stability and success.

As a closely-knit community bound by friendships, neighborly bonds, and partnerships, we cultivate opportunities to inspire hope.

Regardless of our members’ circumstances, challenges, or aspirations, we stand ready to support them every step of the way. Because when we empower our members and make them feel valued, the possibilities are endless.

We are their north star – shining bright, leading the way and carving the path to financial wellness. We are committed to making good happen in the valley we call home.

Our foundation relies on empathy, commitment, and compassion. It’s more than just a mission, it’s our purpose—motivating us each and every day. This is the Valley First promise.

“Valley First Credit Union’s dedication to supporting the arts and our community’s cultural vitality has been instrumental in ensuring the success of The Prospect Theatre’s programming in 2023. Their active board participation and volunteer support at our key fundraising events have been invaluable, enabling us to continue providing enriching performance art experiences to our audiences. Thanks to Valley First, we have been able to sustain and even expand our programming, fostering creativity and artistic expression in our community.”

- Sarah Aaronson, Executive Director, Prospect Theatre Project

MESSAGE FROM THE BOARD CHAIRPERSON

As Chair of the Board of Valley First Credit Union, it brings me great pleasure to reflect on the strides we have made together over the past year. Our commitment to member service remains top-of-mind, as we continually strive to exceed expectations and deliver tailored financial solutions that empower our members to achieve their goals.

I am proud to announce that, through our collective efforts, we have reached a significant milestone - surpassing $1 billion in assets. This achievement is a testament to the trust and confidence our members have placed in us, and it reinforces our commitment to prudent financial management and strategic growth.

Despite the highly publicized bank failures last year, Valley First stayed true to our mission – building better financial lives for our members. Our commitment to financial stability, mitigating risk, and our prudent stewardship of our members’ funds kept their money safe and the credit union sound and on solid ground. You’ve made a great choice partnering with Valley First for your financial needs.

In line with our dedication to serving our members, we have made significant product, service, and technology infrastructure investments. These investments have not only improved the overall member experience but also positioned us for sustainable growth in the ever-evolving financial landscape.

Our success is deeply rooted in the dedication and expertise of our staff, Board of Directors, and Supervisory Committees. Their unwavering commitment to excellence and passion for serving our members are the driving forces behind our achievements. As we continue to grow, we remain focused on providing ongoing training and development opportunities to ensure our team is equipped with the skills and knowledge needed to deliver exceptional service. I am immensely proud of our entire team at Valley First. Their collective efforts and dedication have been instrumental in navigating turbulent times and steering us towards continued success.

Furthermore, our commitment to the community remains at the forefront of our mission. Through various initiatives and partnerships, we continue to make meaningful contributions to the communities we serve, enriching lives and fostering economic growth and prosperity.

With your continued support and partnership, I am confident that Valley First Credit Union will continue to thrive and make a positive impact on the lives of our members, staff, and communities for generations to come.

Thank you for your trust and continued support.

Chris Peters

Chris Peterson Board Chair Valley First Credit Union

“...Valley First stayed true to our mission –building better financial lives for our members.”

“...We are dedicated to giving back and enriching the lives of those around us”

MESSAGE FROM THE PRESIDENT & CEO

I am honored to address you and reflect on the remarkable journey we’ve embarked on together over the past year. At Valley First, our commitment to supporting our members is at the heart of everything we do. We understand that each member’s financial journey is unique, and we are dedicated to providing personalized solutions that empower our members to achieve their financial goals.

Our focus on scalable growth has allowed us to expand our reach while maintaining the high level of service and support that our members deserve. Through strategic initiatives and investments in technology and infrastructure, we have positioned ourselves for sustainable growth, ensuring that we can continue to serve our members effectively for generations to come.

We were thrilled to open our new Fresno branch, which represented a modern fusion of smart branch advisory services and traditional banking. This innovative branch exemplified our ongoing commitment to investing in local communities. By blending cutting-edge technology with personalized customer service and traditional banking offerings, we were able to cater to the diverse needs of our members while providing the highest level of support. This relocation was a testament to our dedication to scalable growth and member service – ensuring we are best positioned to serve our members.

Central to our mission is our commitment to making a meaningful impact in the communities we serve. Whether through financial education programs, community partnerships, or volunteer initiatives, we are dedicated to giving back and enriching the lives of those around us. I’m proud to share that our dedicated team contributed over 3,285 hours of volunteer service and donated $223,475 to local charities and organizations. By living our core values of Learning, Passion, and Ownership, we can make a positive difference and create lasting change in our communities.

We place a strong emphasis on risk management and compliance and recognize the importance of safeguarding our members’ financial wellbeing. We continue to remain vigilant in our efforts to mitigate risks and ensure regulatory compliance at every level of our organization.

I am thrilled to announce that, thanks to the collective efforts of our team and the unwavering support of our members, Valley First Credit Union has achieved a significant milestone - surpassing $1 billion in assets. This achievement is a testament to the strength and resilience of our organization and reaffirms our commitment to keeping our members’ financial lives safe and secure for generations to come.

As we look to the future, we remain consistent in our dedication to serving our members, supporting our communities, and upholding our core values. With your continued support and partnership, I am confident that Valley First Credit Union will continue to thrive and make a positive impact on the lives of our members and communities for years to come.

Thank you to all our members, employees, and community for your trust and confidence in Valley First Credit Union.

Kathryn J. Davis

Kathryn J. Davis, CCE President & CEO Valley First Credit Union

SUPERVISORY COMMITTEE REPORT

The Supervisory Committee is a group of volunteers elected by the members to ensure the management of Valley First Credit Union follows the guidelines and procedures set forth by the regulatory agencies that govern Credit Union operations.

The Committee is responsible for ensuring the financial records of the Credit Union fairly and accurately reflect its financial position and operating results.

The Committee is also responsible for overseeing the accurate and timely reporting of the Credit Union’s financial status and monitoring the effectiveness of the internal controls to protect Credit Union resources.

Included in this responsibility is the review of member account records to verify their accuracy and oversee the audit performed by our independent auditing firm, Moss Adams, Certified Public Accountants.

The Supervisory Committee has reviewed the financial records, member account records, and independent accounting firm’s audit and believes the Credit Union has maintained accurate and timely accounting records and applied the policies and procedures established by the Board of Directors.

Kashmir Gill Kashmir Gill Supervisory Committee Chair Valley First Credit Union

TREASURER’S REPORT

I am proud to report that Valley First Credit Union experienced another solid financial year in 2023. A few highlights from the year include:

 Total assets increased by $55 million, resulting in year-end assets of $1.019 billion.

 Total shares increased by $6.7 million to $801.5 million. Decreases were seen in many categories but were driven mainly by spending in regular shares and share drafts due to inflation and other economic factors affecting members’ savings. The decreases in non-maturity deposits were more than offset by the increases in certificates, which grew by almost $60 million.

 Total net loans increased by $3.8 million from the prior year ending at $734.6 million primarily from increases in signature, real estate loans, credit cards and business loans.

 The credit union had net income of $9.4 million, which was a $529,000 increase from the prior year.

 Return on assets held near flat from 1.01% in 2022 to 0.95% in 2023 in a year where many financial institutions saw significant reductions in earnings.

 The net worth ratio increased from 9.21% in 2022 to 9.31% in 2023, even after CECL was factored into the capital on January 1, 2023.

Patricia Gillihan

Based on the National Credit Union Administration (NCUA) benchmarks, we remain categorized as a “well capitalized” credit union.

As we look toward the future, I am confident our organization will continue to utilize our financial strength to help our members and continue our goals around banking with a purpose.

Patricia Gillihan Secretary/Treasurer Valley First Credit Union

EMPOWERING FINANCIAL GROWTH ACROSS THE CENTRAL VALLEY

At the core of our mission lies a firm belief in prioritizing people over profits. It’s this guiding light that inspires us to dedicate our time, skills, and financial resources to uplifting local nonprofits and events that directly benefit our communities. Together, we aspire to create a brighter, more compassionate world where every individual thrives.

OUR IMPACT IN 2023

78,174 credit union members served

60% of our SBA funding was provided to minority and women-owned businesses

$201M in financing for members in our community

$3.3M in economic development within our communities

$21M in affordable home loans for families

4,131 people in our community reached through financial literacy education

1,850 members with loan deferrals in their time of need Assisted

Achieved a Net Promoter Score of 53%

A Member Satisfaction Score of 90%

"Our goal is to increase the number of Latino leaders who serve our communities through civic leadership. Growing strong leaders is critical to the success of the Latino community in the Central Valley. The support that Valley First Credit Union has given to us in 2023 has been critical to our success."

- Marvin Jacobo, Executive Director of the City Ministry Network on behalf of the Latino Leadership Initiative

BUILDING STRONGER COMMUNITIES THROUGH FINANCIAL EMPOWERMENT

COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION (CDFI) DESIGNATION

At Valley First, our commitment to community isn’t just a part of what we do, it’s at the heart of who we are. We believe in fostering financial well-being not only for our members but for the entire community we serve. That’s why we focus on meeting the needs of economically disadvantaged individuals within underserved neighborhoods. With this designation, we invest in our local communities and the residents who live there by providing critically needed financing options often unavailable from the big banks.

Our goal is straightforward: to eliminate financial vulnerability and uplift our community toward a brighter financial future, one family at a time. As a member of Valley First, you’re an essential part of this life-changing endeavor. We truly believe that by lifting each other up, we can achieve anything. Together, we are unstoppable.

PARTNERSHIPS THAT REVITALIZE NEIGHBORHOODS

FEDERAL HOME LOAN BANK OF SAN FRANCISCO (FHLB)

Valley First Credit Union is deeply committed to supporting the well-being of the Central Valley communities we serve. Partnering with Stanislaus Equity Partners (STEP), we’re utilizing a grant from the Federal Home Loan Bank of San Francisco’s AHEAD program to empower our neighbors.

Through this partnership, we’ve enhanced STEP’s programs to provide essential resources for BIPOC entrepreneurs and residents. Our goal is to address the unique challenges faced by our community members, offering support and opportunities for growth.

Understanding the struggles our neighbors encounter, we’re dedicated to being part of the solution. By leveraging collaborative efforts like this, we’re actively working to bring positive change and support to the Central Valley, one step at a time.

"Valley First's commitment to community empowerment is truly commendable. They have demonstrated their firm support for initiatives aimed at uplifting BIPOC entrepreneurs, enhancing access to crucial resources, and fostering meaningful connections within our community and have positioned their impact to becoming one of the bedrock organizations addressing the critical issues facing our community. They were pivotal in securing a substantial grant from the Federal Home Loan Bank of San Francisco's AHEAD program is testament to their dedication to fostering economic growth and housing stability in Stanislaus County. With these funds, Stanislaus Equity Partners (STEP) is proud to collaborate with Valley First Credit Union, knowing that together, we are driving positive change and advancing our shared mission of creating opportunities for all residents."

- Joe Duran, CEO, Stanislaus Equity Partners (STEP)

OUR COMMUNITY IMPACT

HELPING CENTRAL VALLEY BUSINESSES & COMMUNITIES THRIVE

 Funded $2.7M in small business loans, creating employment opportunities that help our communities flourish

 Saved small businesses $32,200 in fees through our Boost Your Small Business promotion

 Returned $88,000 in Money Market Account dividends to business members

BENEFITS OF MEMBERSHIP

 Members received $5M in dividends, a 72% increase from the previous year, easing the impact of inflationary pressures

 Members earned $142,200 with our Purple Checking incentive

 Gave back over $294,000 in Purple Checking cash back rewards

 Refunded $80,575 in ATM fees for Purple Checking members

 Members earned $189,983 in Visa Credit Card cash back rewards and over $25M in Visa Credit Card points

VITAL HELP DURING TIME OF NEED

 Provided 1,850 loan deferrals that helped our members navigate through tough economic times

 Supported our members with over $525,228 in auto, home, life and AD&D insurance claims

MAKING SMART FINANCIAL CHOICES

 Provided $13.2M in personal loans to help cover costs and consolidate debt

 Helped 8,891 members make informed borrowing decisions

 Funded 4,560 auto loans providing members with reliable transportation fulfilling our commitment to workforce development

BOLSTERING FINANCIAL WELL-BEING

 Reached 4,131 people in our community through financial education – aimed at enabling lifelong financial well-being and generational wealth

 Educated over 300 students who completed over 80 hours of financial literacy curriculum

 Helped 6,613 members increase their credit score by using free financial health tools

FULFILLING THE DREAM OF HOMEOWNERSHIP

 60% of funding provided to underserved and underbanked members

 Refinanced $9M in home loans helping build generational wealth

"Valley First Credit Union's dedication to our cause has been truly remarkable. Their enthusiastic volunteer support at our key fundraising and programming events throughout 2023 played a very important role in our record-breaking year. Thanks to Valley First and their continued partnership, we were able to expand our reach and provide even more support to the children in our community who need it most. Their generosity and passion for making a difference have left an indelible mark on our organization, and we are deeply grateful for their time, talents and treasures."

- Cindy Schneider, Executive Director/CEO, Cricket’s Hope

IN 2023 , VALLEY FIRST

 Served 3,285 volunteer hours representing a 70% increase over 2022 in volunteer hours

 Donated $223,475 to local charities and organizations

FIRST EMPLOYEES…

 Collected 1,125 pounds of food for local food banks

 Provided financial education to 4,131 people in our community

ACKNOWLEDGING ACHIEVEMENTS & RECOGNIZING SUCCESS

FOR OUR MEMBERS

During the Happy HoliPays initiative, Valley First Contact Center representatives were empowered to provide exceptional assistance to members in need. Whether it’s covering a medical or utility bill, ensuring a month’s rent or mortgage payment, or putting food on the table for a family, these representatives go above and beyond.

Over the 3-day campaign, we helped 26 members-in-need by depositing a total of $17,592 in their accounts.

"From the earliest imaginings of what Modesto Children’s Museum could be, Valley First Credit Union has been a believer in our commitment to creativity, curiosity, and lifelong learning. From providing essential and trailblazing financing to actively supporting the capital campaign that brought MoChiMu to life, Valley First Credit Union has played an integral role in making MoChiMu a reality for the children of our community. Their commitment to being a leader in supporting our organization and fostering education, creativity, and exploration among our community’s youth has been truly inspiring. We are immensely grateful for Valley First Credit Union’s steadfast partnership and dedication to enriching the lives of children in our community through the power of learning and play.”

-Chelsie Webster, CEO, Modesto Children’s Museum

2023 AWARDS AND RECOGNITION

BEST OF 209

CDFI CERTIFIED U.S. DEPARTMENT OF THE TREASURY

READERS’ CHOICE TURLOCK

BEST OF CERES

BAUER FINANCIAL 4-STAR RATING

BEST OF MODESTO

DIAMOND AWARDS HAPPY HOLIPAYS

Valley First Credit Union received national recognition at the annual Credit Union National Association (CUNA) Marketing and Business Development Council Conference in Orlando, Florida, bringing home a Diamond Award for the Happy HoliPays campaign. The program won “Category’s Best” honors in the Video Non-Commercial Series category.

MEMBER TESTIMONIALS

“As a young member, they were really helpful. Over the years they helped me establish my credit. They funded my first loan. I’ve now brought my daughter here. Valley First is good for me and good for the family.”

- Sergio, Turlock Branch, Member since 1998

“Last year I ran into a big financial difficulty and Valley First came to my rescue. They got a team together and figured out how to work with me and get my finances sorted out. Valley First looked at me as a person, not a number and they really cared about what was happening to me. That wouldn’t happen at a big bank.”

- Lewis, Ceres Branch, Member since 2003

“When we walk in the door, they greet us with a smile, they know us by name. There’s no other institution that we’ve been to before that really made us feel at home like Valley First has.”

- Joy & Otis, Fresno Branch, Members since 2008

AMERICAN BANKER

THE MOST POWERFUL WOMEN IN CREDIT UNIONS, 2023

“When I call Valley First Credit Union, I don’t feel like I’m calling a banking institution. I feel like I’m calling someone within my family.”

- Raymond & Bobbi Jo, Oakdale Branch, Members since 2001

THE HEARTBEAT OF OUR CULTURE

VALLEY FIRST’S INTERCONNECTED CORE VALUES

FOR OUR EMPLOYEES

At Valley First, our culture is built upon a foundation of core values that guide our actions, decisions, and interactions every day.

In 2023, we re-defined our core values – Passion, Ownership, and Learning. These are not just words on a page; they are deeply ingrained principles that define who we are as an organization and how we approach our work.

Here are the definitions of these core values, their significance, and examples of how they have been demonstrated throughout the year. From our commitment to providing superior service to our members and making a positive impact in our communities, to our dedication to accountability and transparency, and our pursuit of growth and innovation, these core values serve as the compass that guides us on our journey toward excellence.

Passion

We are passionate about providing superior service to our members and Making Good Happen in the communities we call home. That means we recruit employees who are looking for more than just a job and want to make a difference through their work. We won’t accept mediocrity or settle for “warm bodies.” We will encourage employees to engage in their work wholeheartedly, fostering creativity, increasing engagement, and fueling exceptional performance. We won’t be dismissive of new ideas or say, “we’ve tried that before and it didn’t work.” We will recognize and reward passionate employees who bring their best self to work every day and positively represent Valley First in the community by offering them opportunities to grow within the organization.

Ownership

We want to be an organization known for accountability – to our members, our community, and each other. Accountability fosters a culture where individuals openly acknowledge their roles and obligations, ensuring transparency, trust, and ethical conduct. We will set clear expectations for each individual and hold each other accountable when we fall short of expectations. We will take responsibility for our actions, decisions, and outcomes, promoting a sense of ownership that drives collaboration, innovation, and achievement of organizational objectives. We will take ownership of our failures and celebrate our success together, as a team.

Learning

As a learning organization, Valley First will foster growth and adaptability by encouraging employees to acquire new skills, embrace challenges, and stay up to date on the latest innovations in the financial services industry. We will not be satisfied with the way we have always done things. We will empower teams to evolve and provide positive reinforcement. We will try new things and not be afraid of failure. We will be relentlessly curious. We will embrace a culture of continuous improvement, leading to heightened engagement, increased job satisfaction, and sustained success in a competitive business environment.

ELEVATING OUR MEMBERS’ FINANCIAL CONFIDENCE

This year we implemented robust infrastructure, digital enhancements, and cutting-edge security measures. We are excited about the opportunities these upgrades offer our members. These enhancements affirm our dedication to enriching the digital banking experience for our members – empowering them to manage their finances with confidence and peace of mind.

SALESFORCE CRM

The Salesforce implementation has proven invaluable, fostering enhanced member experiences and empowering staff efficiency. With Salesforce, we solidify our commitment to member-centricity and operational excellence, ensuring sustained growth and competitiveness in the dynamic financial services landscape.

MOBILE THUMB BAR

Our “mobile thumb bar” mobile app enhancement represents a pivotal upgrade in member navigation and user experience. Now members can effortlessly explore account details, conduct transactions, and access relevant services with greater efficiency and convenience.

ONLINE BANKING

The Online Banking upgrade marks a significant milestone in our commitment to delivering unparalleled service excellence to our members. With a focus on enhancing uptime performance, bolstering member security, and improving accessibility, this enhancement represents a transformative leap forward in our digital banking ecosystem. This agility not only allows us to stay ahead of evolving member needs but also provides a platform for delivering new and exciting experiences in a timelier manner.

VALLEYLINE

Valleyline underwent a significant update, transforming into a speech and touch-tone enabled system with expanded language support. Equipped with modernized, intelligent menus and enhanced prompting, Valleyline now delivers a seamless and industry-leading secure selfservice experience for members.

The introduction of an enhanced, secure self-service account recovery process empowers members with greater autonomy and convenience, reducing dependency on manual assistance and minimizing delays accessing their accounts.

TAP TO PAY

Tap to Pay on iPhone and Autobooks empower our business members to effortlessly accept in-person, contactless payments via their iPhones, seamlessly integrated within our Mobile Banking App. This innovative service eliminates the need for additional terminals or hardware on our members’ end. It grants our business members the flexibility to offer their customers various payment options, with funds instantly deposited into their accounts.

AUTOBOOKS WIDGET

With the Autobooks Widget, located on our online/mobile banking platform, our business members are able to effortlessly send invoices, accept payments, and manage transactions efficiently and securely.

LEADERSHIP

BOARD OF DIRECTORS

Chris Peterson, Chairperson

Fred Cruz, Vice Chairperson

Patricia Gillihan, Secretary/Treasurer

John Schneider, Director

Tom Kane, Director

Gary Hall, Director

Tamra Spade, Director

Wes Hall, Director Emeritus

SENIOR MANAGEMENT

Kathryn J. Davis, CCE, President & CEO

Andrea Brooks, Chief Risk Officer

Tina Marcelo, Chief Lending Officer

Todd McCoy, Chief Financial Officer

Chris Braun, Vice President of Payments

Chris Hewitt, Vice President of Operations & Digital Strategy

Courtnay Lynch, Vice President of People & Culture

Paul Emanuels, Vice President of Lending

Raymond McCaslin, Vice President of Commercial Banking

Roderick Arevalo, Vice President Controller

SUPERVISORY COMMITTEE

Kashmir Gill, Chairperson

Donna Riley, Secretary

Christopher Barnes, CPA, Committee Member

Sarah McDonald, Committee Member

Emmanuel Escamilla, Committee Member

In loving memory of Duke Leffler, Supervisory Committee

“Duke Leffler’s contributions to Valley First Credit Union and our community were nothing short of extraordinary. From his days as a beloved athlete to his esteemed career in real estate and leadership roles, Duke’s legacy is one of passion, kindness, and unwavering dedication.

Duke’s memory will continue to inspire us to reach for excellence and make meaningful differences in the lives of those we serve.”

In loving memory of Wesley Walter Hall, Director Emeritus

“Wesley Walter Hall was not just a past Chairman or Director Emeritus; he was the heart and soul of Valley First Credit Union. His leadership, wisdom, and unwavering dedication have been instrumental in shaping the Credit Union into what it is today. Wes leaves behind a profound legacy of service, integrity, and compassion that will continue to inspire us all.”

Kathryn

J. Davis, CCE President & CEO

We’re grateful for an impactful 2023 and look ahead to continue to create a brighter future for our members and communities.