VolCorp 2022 Annual Report

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I viewVolCorp as a strategic partner.

STRONGLY AGREE

SOMEWHAT AGREE

Overall, I am satisfied with my relationship withVolCorp.

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CHAIRMAN& P’RESIDENTS REPORT

Bigger. Be er. Bolder. Those three words really highlighted the mentality ofVolCorp over the last couple of years.When the pandemic hit, we vowed to keep our feet moving and to come out of it an even stronger corporate than when we went into it.We wanted to haveideas, bigger provide evensolutions for our members, be er and to have aapproach to everything we bolder do. By those measures, among many others, 2022 was a very successful year. 2022 also required us to be nimble, however, as we, like everyone else, had a few unexpected curveballs thrown our way.We seamlessly worked those into our roadmap and, again, never stopped moving. In fact, those curveballs turned out to be opportunities merely disguised as setbacks to enable us to execute on the vision of biggerbe erbolder,, and.

JOHN JACOWAY Board Chairman

VolCorp’s wholly-owned CUSO, Symphony LLC completed its second year of operations in 2022 and the momentum only got stronger.You will likely recall Symphony aims to help credit unions to focus on their members while Symphony focuses on some of the tedious, but necessary, tasks which are critical to credit unions’success.The CUSO offers such services as Enterprise Risk Consulting, Business Continuity Consulting, and Supervisory Commi ee (and other accountingrelated)Audits with additional service offerings

on the horizon.We are proud to report Symphony is adding value for credit unions of all sizes all over the country with no marketing, minimal advertising, and just a lot of word of mouth. Symphony is earning the trust of credit unions, following the‘we must earn it every day’ mentalityVolCorp possesses.As a result, many credit unions have signed up for services and come back for repeat engagements.The momentum of Symphony continues to lead to shared success for the CUSO and those it serves.

Just as in 2021,VolCorp received additional distributions from the U.S. Central Asset Management Estate in 2022.This year, we received two distributions totaling $23.9 million.Those distributions continue to come back toVolCorp as a result of the U.S. Central securities outperforming expectations as well as legal recoveries as pursued by the NCUA and their legal team.We are thrilled to have that capital returned to us and to use it to both bolster our capital position and to put it to work to support the,,future biggerbe erbolder ofVolCorp and our members.We anticipate a couple more modest distributions in 2023 and maybe into 2024 and then that chapter will finally be behind us.

JMEFFERRY President and Chief ExOfficer ecutive

ChairmanPresident’s Report Continued...

& It is virtually impossible to discuss 2022 without acknowledging the unprecedented rate hikes and asset size corrections we all experienced. Given the business model of a corporate credit union, the near-zero interest rate environment we have all operated in for such a long time puts considerable strain on thefinancials and operations of a corporate. Rates increasing, on the other hand, can cause interest rate risk for any organization depending upon your balance

sheet composition. For a corporate, however, we maintain minimalfixed rate exposure and, as such, interest rate hikes present minimal IRR risk.At the same time we have been managing the IRR, we have also remained very prepared for the inevitable run-offof assets we have all expected since the Federal Governmentfirst started distributing checks.We remained cautiously invested and very liquid in anticipation of both of these events. Bo om line–our members can rest easy knowingVolCorp was postured and ready for what we experienced in 2022.

And, of course, we always like to report back how we are doing based on the feedback we

Our goal is to serve you in a way tha but as your TrustedStrategicPartne of respondents agreed with the sta

receive in our annual member survey of over 330 credit unions of all sizes in nearly 20 states across the country. Our goal is to serve you in a way that positions us, not as your vendor, but as yourTrusted Strategic Partner. In 2022, aVERY humbling 100% of respondents agreed with the statement that they view us as such.

We cannot thank you enough for continuing to place your trust in us.We strive every single day

to use that day to earn your trust so we may be blessed with the opportunity to serve you the next.We never take it for granted.We never rest on our laurels.And, we know complacency is the biggest risk for any organization. In the year(s) ahead, we will continue a never-ending pursuit of,, and. Stay tuned biggerbe erbolder throughout 2023 and 2024 as the byproduct of these efforts are revealed and our members can see what a,, andVolCorp biggerbe erbolder looks like.We are excited and we think you will be too.

at positions us, not as your vendor,

In 2022, aVERY humbling er100% atement that they view us as such.

TREASURERS ’ REPORT

From a broad view, credit unions will likely associate 2022 with heated inflation, significant increases in short term interest rates and, in general, changes to the liquidity landscape.There is a significant difference between a credit union’s ability to withstand economic shi s and the ability to capitalize on these shi s for the good of the membership.We are pleased to reportVolCorp did the la er, and, in many respects, served its member credit unions and our collective mission in a greater capacity than any other time in its history.

RON SMITH Treasurer

Providing member credit unions reliable access to liquidity is one ofVolCorp’s foundational pillars and a primary reason for its charter over forty years ago. Although 2022’s year-end outstanding loan balance of $55 million is only a small portion of approved lines of credit andVolCorp’s lending capacity, loan activity was notably higher during the year. 2022 marked the final year of the temporary CLF agent program which granted CLF access for the majority of VolCorp’s membership.While a great amount of past and ongoing effort was expended to make the program permanent,VolCorp was proud to serve as your agent during those uncertain years.

Supporting member liquidity is only possible with a solidfinancial foundation.Tier 1 capital grew

over $26 million during 2022 and exceeded $150 million at year-end.Although capital growth and comparative annual earnings have been skewed in recent years due to recoveries from the U.S. CentralAsset Management Estate, both‘one-time events’and operational performance further strengthened our foundation.VolCorp’s earnings and member share rates both benefited during 2022 with the relatively rapid increases in overnight rates, resulting in 2022’s net interest income of $9.9 million. U.S. Central distributions and growth in service-driven revenue bolstered noninterest operating income to $31.9 million.A er operating expenses of $14.9 million and nonoperating expenses, 2022’s net income rested at

unrealized loss position stood at only 2% of its portfolio book value, an impressive feat considering the portfolio’s short duration and the 425 basis point upward movement in the Federal Reserve Bank’s target range during the year. VolCorp’s assets are heavily concentrated in riskfree or low-risk assets such as the Federal Reserve Bank, government guaranteed securities, and agency securities.The investment portfolio is primarily composed offloating rate instruments andVolCorp only holds high credit quality securities.The quality of assets held is ultimately reflected in the currentTier 1 risk-based capital ratio of 71.92%, which is far greater than its respective“well capitalized”threshold of 6.00%.

$26.6 million.At year-end,VolCorp’sratio leverage stood“well capitalized”at 8.26% and the retained earnings ratio of 4.60% sat well above regulatory requirements.

VolCorp must also maintain high-quality assets to support member liquidity and provide for safety of deposits. Recently the downside of higher rates, namely depressed investment values and unrealized losses, has garnered much a ention in the news. However,VolCorp’s portfolio management philosophy negated the pitfalls affecting the headline institutions.At year-end,VolCorp’s net

VolCorp’sALCO meets monthly overseeing asset-liability management, investments, and credit risk.The commi ee monitors corporate liquidity to ensure funds are available to members in times of need, while also allowing earnings and growth opportunities for both the corporate and member credit unions.A review of the audited financial statements indicates operations are sound.VolCorp is well-positioned to serve its members for many years to come.

There is a significant difference between a credit union’s ability to withstand economic shi s and the ability to capitalize on these shi s for the good of the membership.

SUPERVISORY C’OMMITTEES REPORT

The focus of the Supervisory Commi ee is to oversee management practices and policies, safeguard member assets and ensure that VolCorp’sfinancial reporting objectives are met.To administer these responsibilities the Commi ee must establish audits, inspect or cause to be inspected the securities portfolio, cash and other accounts ofVolCorp, to inspect or cause to be inspected the internal controls over financial reporting, to opine on thefinancial statements at the end of thefiscal year and to cause a full report of these audits to be made to the Board.

In accordance with these responsibilities, the independent accounting firm of Carr, Riggs & Ingram, LLC was engaged to performVolCorp’s annual audit.Their le er renders an“unmodified” opinion on the consolidatedfinancial statements ofVolunteer Corporate Credit Union as of December 31, 2022, and the year then ended. Mrs. Marla Mackie, CPA, was engaged by the Commi ee to perform the internal audit function for VolCorp during 2022.All audits and their recommendations were reported to the

RMICKIKELS Committee Chairman

Supervisory Commi ee. Information Security reports were provided to the Commi ee monthly by Mr.Tyler McNair, Director, Enterprise Risk and Mr. Cody Lee, Information Security Officer.

Based on the results of the internal audits, security reports, external audit and the joint examination byTennessee Department of Financial Institutions and the National Credit UnionAdministration conducted during 2022, the Commi ee believes that it has properly represented the interests of the membership and its responsibilities toVolCorp.

RMICKIKELS Committee Chairman

Tennessee Members 1st Federal Credit Union

NAICKRVON

WestVirginia Federal Credit Union

2022 CM OMMITTEEEMBERS

PAM CASE

The Commi ee would like to commend the board of directors, management and stafffor their support and commitment to the audit and review process and for their continuing dedication of services to member credit unions.

Jack Daniel Employees Credit Union

KWARENOODALL

Veritas Federal Credit Union

DAVID KING outh Community Credit Union Heritage S

2022 S LEADERS

JEFF DATO EVPand

Chief Operating Officer

PHILLIP COCHRAN ChiefOfficer Investment Series 7 & 63 J

Preside Chief Execu

SENIOR HIPTEAM

MERRY ent and Officer utive

JUSTIN HOLT ChiefOfficer Financial

CHRISTINA ADKISON Chief Experience Officer

DEBBIE JONES UT Federal Credit Union

TODD SWIMS Vice-Chairman Leaders Credit Union

RMICKIKELS Tennessee Members 1st Federal Credit Union

JOHN JA Chai

Southeas Credit

RON SMITH Treasurer Enbright Credit Union

OARD OF CTORS

irman st Financial t Union

Northern KY Educators’ Federal Credit Union

Strip Steel Community Federal Credit Union

ACOWAY

BRIAN TROTTER EPB Employees Credit Union

JUDY HESTER

SANDY YOCUM

MIKE COOPER Secretary AllWealth Federal Credit Union

Monday,Tuesday,Wednesday and Friday: 7:30 a.m. to 4:30 p.m. (Central time).

8:30 a.m. to 4:30 p.m. (Central time).

Our Member Services Department closes at 4:15 p.m. (Central time) each day. Office closings are coordinated with the Federal Reserve Bank holiday schedule.

Savings Federally Insured to at least $250,000. NCUA, a U.S. GovernmentAgency.