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Earnings and Capital
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Consolidated Financial Statements
Control Over Financial Reporting
We hope you’ve already seen firsthand that “second we serve. It’s our commitment to go beyond the the kind of partnership that makes a meaningful
second mile” is more than a philosophy—it’s how the expected, exceed the ordinary, and provide meaningful difference to your credit union.
Regulatory Considerations, Re Net Economic Value Analysis Investments, Ear
etained Earnings and Capital, s, Assets and Member Loans, rnings, Liquidity
An integral part of a credit union’s investment policies, procedures and practices is the analysis of all institutions in which it has invested its surplus funds, including corporate credit unions. Part 703 of the National Credit Union Administration’s (NCUA) Rules and Regulations states:
“A Federal credit union must conduct and document a credit analysis on an investment and the issuing entity before purchasing it, except for investments issued or fully guaranteed as to principal and interest by the U.S. government or its agencies, enterprises, or corporations or fully insured (including accumulated interest) by the National Credit Union Administration or the Federal Deposit Insurance Corporation. A Federal credit union must update this analysis at least annually for as long as it holds the investment ”
thousands)
Although NCUA’s investment regulation specifically exempts state-chartered credit unions, many use it as a guideline in their investment policies, procedures, and practices Recognizing the analysis of a corporate credit union can be time-consuming, this summary provides an overview of Volunteer Corporate Credit Union
(in thousands)
“(1) A corporate credit union must maintain at all times:
(i) A leverage ratio of 4.0 percent or greater;
(ii) A Tier 1 risk-based capital ratio of 4.0 percent or greater; and (iii) A total risk-based capital ratio of 8.0 percent or greater.
(2) To ensure it meets its capital requirements, a corporate credit union must develop and ensure implementation of written short- and long-term capital goals, objectives, and strategies which provide for the building of capital consistent with regulatory requirements, the maintenance of sufficient capital to support the risk exposures that may arise from current and projected activities, and the periodic review and reassessment of the capital position of the corporate credit union.
(in thousands)
(3) Beginning with the first call report submitted on or after October 21, 2013, a corporate credit union must calculate and report to NCUA the ratio of its retained earnings to its moving daily average net assets. If this ratio is less than 0.45 percent, the corporate credit union must, within 30 days, submit a retained earnings accumulation plan to the NCUA for NCUA’s approval. The plan must contain a detailed explanation of how the corporate credit union will accumulate earnings sufficient to meet all its future minimum leverage ratio requirements, including specific semiannual milestones for accumulating retained earnings. In the case of a state-chartered corporate credit union, the NCUA will consult with the appropriate state supervisory authority (SSA) before making a determination to approve or disapprove the plan, and will provide the SSA a copy of the completed plan. If the corporate credit union fails to submit a plan acceptable to NCUA, or fails to comply with any element of a plan approved by NCUA, the corporate will immediately be classified as significantly undercapitalized or, if already significantly undercapitalized, as critically undercapitalized for purposes of prompt corrective actions. The corporate credit union will be subject to all the associated actions under §704.4.”
Leverage ratio means the ratio of Tier 1 capital to moving daily average net assets.
Retained earnings means undivided earnings, regular reserve, reserve for contingencies, supplemental reserves, reserve for losses, GAAP equity acquired in a merger, and other appropriations from undivided earnings as designated by management or the NCUA.
Total capital means the sum of Tier 1 capital and Tier 2 capital, less the corporate credit union’s equity investments not otherwise deducted when calculating Tier 1 capital.
Tier 1 capital means the sum of paragraphs (1) and (2) of this definition from which items in paragraphs (3) through (7) are deducted:
(1) Retained earnings;
(2) Perpetual contributed capital;
(3) Deduct the amount of the corporate credit union’s intangible assets that exceed one half percent of its moving daily average net assets (however, the NCUA may direct the corporate credit union to add back some of these assets on the NCUA’s own initiative, or the NCUA’s approval of petition from the applicable state regulator or application from the corporate credit union);
(4) Deduct investments, both equity and debt, in unconsolidated CUSOs;
(5) Deduct an amount equal to any PCC or NCA that the corporate credit union maintains at another corporate credit union;
(6) Deduct any amount of PCC received from federally insured credit unions that causes PCC minus retained earnings, all divided by moving daily average net assets, to exceed two percent when a corporate credit union's retained earnings ratio is less than two and a half percent.
(7) Deduct any natural person credit union subordinated debt instrument held by the corporate credit union.
“Strong / Well-Capitalized Benchmark” levels shown above reflect commonly recognized supervisory and industry benchmarks, but formal capital classifications for corporate credit unions are determined by the NCUA based on overall capital adequacy, risk profile, and any applicable supervisory actions A corporate credit union may not be considered well capitalized if subject to a regulatory agreement, order, or directive, even if ratio thresholds are met.
of NCUA’s
Tier 1 risk-based capital ratio means the ratio of Tier 1 capital to the moving monthly average net risk-weighted assets.
Tier 2 capital means the sum of paragraphs (1) through (4) of this definition:
(1) Nonperpetual capital accounts, as amortized under §704.3(b)(3);
(2) Allowance for loan and lease losses calculated under GAAP to a maximum of 1.25 percent of risk-weighted assets;
(3) Any PCC deducted from Tier 1 capital; and
(4) Forty-five percent of unrealized gains on available-for-sale equity securities with readily determinable fair values. Unrealized gains are unrealized holding gains, net of unrealized holding losses, calculated as the amount, if any, by which fair value exceeds historical cost. NCUA may disallow such inclusion in the calculation of Tier 2 capital if NCUA determines that the securities are not prudently valued.
Total risk-based capital ratio means the ratio of total capital to moving monthly average net risk-weighted assets.
Any amounts deducted from the numerator of the aforementioned ratios are also deducted from the denominator.
A corporate credit union’s balance sheet reflects the liquidity position and cash flows of its member credit unions. As a result, it is not unusual to see asset levels fluctuate sometimes by 25 percent or more not only from month to month, but even within shorter time periods. In addition, month-end asset balances may be temporarily elevated due to routine payroll activity flowing through member accounts. To mitigate the potential distortion caused by these fluctuations, NCUA regulations require the use of moving daily average net assets (MDANA) in the calculation of a corporate credit union’s key financial ratios
During 2025, VolCorp’s balance sheet remained stable and consistent with the prior year This stability is evidenced by MDANA, which totaled $1 65 billion as of December 31, 2025, compared to $1 66 billion at December 31, 2024
Healthy operating performance supported growth in both retained earnings and Tier 1 capital. Retained earnings increased to $123.8 million, while Tier 1 capital rose to $188.8 million, representing increases of $10.7 million and $9.0 million, respectively, over the prior year. As of December 31, 2025, the retained earnings ratio improved to 7.49 percent, compared to 6.82 percent at year-end 2024. VolCorp’s Tier 1 capital (leverage) ratio was 11.42 percent at year-end 2025, up from 10.84 percent in the prior year, and remains safely above the 5.00 percent threshold required for a corporate credit union to be considered “well capitalized.”
(in thousands)
Net Economic Value (NEV) represents a key measure of a corporate credit union’s sensitivity to changes in interest rates and the overall strength of its balance sheet NEV is defined as the difference between the book value of regulatory total capital and the net change in the market (fair) value of assets and liabilities under current interest rate conditions It is calculated as the present value of expected cash flows from assets, including embedded options, minus the present value of expected cash flows from liabilities, also including embedded options
NEV is a point-in-time measure based on a specific balance sheet date and is evaluated under a “Base” scenario, reflecting prevailing market interest rates, as well as a series of standardized interest rate shock scenarios. These scenarios assume immediate and sustained parallel shifts in interest rates of plus and minus 100, 200, and 300 basis points. The Base NEV Ratio is determined by dividing the residual Base NEV by the mark-to-market value of Base total assets. Together, NEV and the NEV Ratio provide important insight into the level of interest rate risk embedded within an institution’s balance sheet structure Base NEV also serves as an estimate of the institution’s residual economic value under current market conditions
(in thousands)
Regulatory standards established under Part 704 8 of the NCUA Rules and Regulations define Net Economic Value (NEV) requirements based on the level of authority granted to corporate credit unions All corporates operate with Base authority, under which the allowable decline in NEV across industry-standard rate shock scenarios is limited to 15 00 percent Institutions may apply for expanded authority, known as Base Plus, which requires meeting enhanced regulatory expectations related to capital strength, management practices, infrastructure, and assetliability risk management Corporate credit unions operating with Base Plus authority must maintain a minimum Base NEV Ratio of 2.00 percent and are permitted a broader decline in NEV of up to 20.00 percent under stressed interest rate scenarios. In November 1997, VolCorp became the first corporate credit union approved by the NCUA to operate at the Base Plus level, reflecting its early commitment to strong capital and risk management practices.
As of December 31, 2025, VolCorp’s Base NEV totaled $187.9 million, and the Base NEV Ratio was 10.45 percent, substantially exceeding regulatory minimum requirements. Under the most severe regulatory stress scenario of a 300 basis point increase in interest rates, NEV declined by $8.8 million, or 4.68 percent, to $179.1 million. This very moderate change confirms the level of sensitivity remains well within established regulatory limits and reflects a balanced approach to interest rate risk management.
The following table provides detailed information on the impact of the NCUA-prescribed interest rate shock scenarios on VolCorp’s NEV and NEV Ratio as of year-end 2025.
(from Base, thous.)
NEV (from Base)
VolCorp maintains a highly conservative investment profile. At year-end 2025, approximately 99.6 percent of its marketable securities portfolio was rated AAA or AA by Standard & Poor’s, and an equal percentage was issued or guaranteed by U.S. Government agencies. VolCorp actively monitors asset quality through comprehensive monthly credit analyses and portfolio modeling.
As of December 31, 2025, the marketable securities portfolio’s amortized cost totaled $850 4 million, with a net unrealized loss of $5.2 million. This represents a net unrealized loss of less than 1 0 percent, reflecting the portfolio’s credit quality and concentration in floating-rate and short-term instruments, which helps mitigate interest rate risk.
In managing its investment portfolio, VolCorp consistently prioritizes safety, liquidity, and yield. Investment policies restrict placements to U.S. government-sponsored enterprises and agencies, the Federal Reserve Bank, other highly rated securities, and select banks and domestically chartered corporations. These policies impose both individual and aggregate limits, supported by rigorous credit analysis and ongoing monitoring. Approved institution reviews incorporate key factors such as size, capital adequacy, asset quality, management quality, earnings performance, and liquidity
The strength of VolCorp’s asset quality is ultimately reflected in its Tier 1 riskbased capital ratio of 107.87 percent as of December 31, 2025, significantly exceeding its respective regulatory “well capitalized” minimum requirement of 6 00 percent.
VolCorp has the responsibility of serving as a primary source of liquidity to meet the needs of its membership, while also protecting the deposits of its individual member credit unions. As of December 31, 2025, VolCorp had established lines of credit to member credit unions totaling $2.2 billion. Outstanding borrowings under these arrangements totaled $3.1 million, representing 0.17 percent of total assets, with all loans current and performing.
Loan quality is governed by policies established by the Board of Directors and implemented through disciplined management practices, including consistent underwriting standards. All lines of credit are fully collateralized, with VolCorp securing its position through the filing of UCC-1 financing statements to establish and perfect a first-priority security interest in designated member assets.
VolCorp conducts proactive quarterly credit reviews of all lending relationships, incorporating detailed monitoring of key financial performance indicators. These reviews identify institutions which may require more frequent monitoring and guide any necessary risk mitigation actions
Since its inception, VolCorp has never recorded a member loan charge-off and has maintained an exceptional record of zero credit losses on member lending, underscoring the strength of its underwriting standards and ongoing credit oversight.
Like all credit unions, VolCorp is a not-for-profit financial cooperative, existing solely to serve the interests of its member credit unions. VolCorp’s objective is to support members’ success by delivering high-quality, costeffective services while providing competitive returns on surplus funds. In fulfilling this mission, VolCorp does not pursue earnings maximization at the expense of its members, nor does it seek to increase earnings by assuming undue risk which could compromise the safety of member shares or capital. Nevertheless, maintaining consistent and adequate earnings remains essential to support dividend payments and fund ongoing operations.
During 2025, VolCorp generated solid financial results while continuing to emphasize balance sheet stability and asset quality Net interest income totaled $25.8 million, supported by stable funding sources and the short-term interest rate environment. Non-interest income contributed an additional $8.8 million. Non-interest expenses were carefully managed at $21 0 million. VolCorp reported net income of $13 6 million for the year This performance resulted in a return on MDANA of 82 basis points, demonstrating VolCorp’s ability to generate sustainable earnings while maintaining its commitments to safety, soundness, and member value.
Year ended December 31, 2025 2024 2023 2022 2021
VolCorp carefully balances the responsibilities of investing to provide competitive returns with the necessity of maintaining sufficient liquidity to meet the ongoing and potential cash flow needs of its members. VolCorp maintains a strong liquidity framework by holding ample levels of cash and overnight investments, complemented by an investment portfolio which is primarily composed of variable-rate instruments This structure helps limit valuation sensitivity in rising interest rate environments compared to fixed-rate alternatives
Management actively monitors and anticipates both daily and seasonal liquidity fluctuations, while also maintaining contingency plans to address unexpected member funding requirements. Liquidity levels are reviewed daily and adjusted as appropriate to ensure the VolCorp remains well positioned to meet member needs and obligations
As of December 31, 2025, cash and cash equivalents totaled $912 million, representing approximately 51 percent of total assets. Combined with the highly liquid investment portfolio, this substantial level of on-balance-sheet liquidity reflects an appropriate posture for a correspondent financial institution and underscores VolCorp’s readiness to meet member needs
In addition to its on-balance sheet liquidity resources, VolCorp maintains diversified external funding capacity through established borrowing arrangements These include borrowing relationships with the Federal Reserve Bank, the Federal Home Loan Bank of Cincinnati, and federal funds lines with regional banks At year-end 2025, these facilities provided total available borrowing capacity of $782.6 million, with no outstanding advances.
VolCorp further enhances its liquidity management capabilities through its role as an agent in the Federal Reserve Bank’s Excess Balance Account (EBA) program This program allows member deposits to be held directly at the Federal Reserve, providing additional balance sheet flexibility and access to contingent funding if needed. As of December 31, 2025, member balances held within the EBA program totaled $989.5 million.
port, Financial Statements, d Financial Statements, r Financial Reporting
Volunteer
December 31, 2025 and 2024
To the Board of Directors and Supervisory Committee of Volunteer Corporate Credit Union and Subsidiary
Opinions on the Financial Statements and Internal Control Over Financial Reporting
We have audited the accompanying consolidated financial statements of Volunteer Corporate Credit Union and Subsidiary, which comprise the consolidated balance sheets as of December 31, 2025 and 2024, and the related consolidated statements of income, comprehensive income (loss), changes in members’ equity, and cash flows for the years then ended, and the related notes to the consolidated financial statements. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Volunteer Corporate Credit Union and Subsidiary as of December 31, 2025 and 2024, and the results of their operations and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.
We also have audited Volunteer Corporate Credit Union and Subsidiary’s internal control over financial reporting, including controls over the preparation of regulatory financial statements in accordance with the instructions for the National Credit Union Administration (NCUA) 5310 –Corporate Credit Union Call Report, as of December 31, 2025, based on criteria established in Internal Control ‐ Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, Volunteer Corporate Credit Union and Subsidiary maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control ‐ Integrated Framework (2013) issued by COSO.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audits of the Financial Statements and Internal Control Over Financial Reporting section of our report. We are required to be independent of Volunteer Corporate Credit Union and Subsidiary and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of effective internal control over financial reporting relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Management is also responsible for its assessment about the effectiveness of internal control over financial reporting, included in the accompanying Management Report Regarding Statement of Management's Responsibilities, Compliance with Designated Laws and Regulations, and Management's Assessment of Internal Control over Financial Reporting.
In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about Volunteer Corporate Credit Union and Subsidiary’s ability to continue as a going concern within one year after the date that the consolidated financial statements are available to be issued.
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and about whether effective internal control over financial reporting was maintained in all material respects, and to issue an auditor’s report that includes our opinions.
Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit of financial statements or an audit of internal control over financial reporting conducted in accordance with GAAS will always detect a material misstatement or a material weakness when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered to be material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.
In performing an audit of the consolidated financial statements and an audit of internal control over financial reporting in accordance with generally accepted auditing standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audits.
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
• Obtain an understanding of internal control relevant to the consolidated financial statement audit in order to design audit procedures that are appropriate in the circumstances.
• Obtain an understanding of internal control over financial reporting relevant to the audit of internal control over financial reporting, assess the risks that a material weakness exists, and test and evaluate the design and operating effectiveness of internal control over financial reporting based on the assessed risk.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about Volunteer Corporate Credit Union and Subsidiary’s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the consolidated financial statement audit.
An institution’s internal control over financial reporting is a process effected by those charged with governance, management, and other personnel, designed to provide reasonable assurance regarding the preparation of reliable consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. Because management’s assessment and our audit were conducted to meet the reporting requirements of Section 704.15 of the NCUA Regulations, our audit of Volunteer Corporate Credit Union and Subsidiary’s internal control over financial reporting included controls over the preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America and controls over the preparation of schedules equivalent to basic financial statements in accordance with the instructions for the National Credit Union Administration NCUA 5310 –Corporate Credit Union Call Report. An institution’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets of the institution; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the institution are being made only in accordance with authorizations of management and those charged with governance; and (3) provide reasonable assurance regarding prevention, or timely detection and correction of unauthorized acquisition, use, or disposition of the institution’s assets that could have a material effect on the consolidated financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent, or detect and correct, misstatements. Also, projections of any assessment of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.
Nashville, Tennessee June 9, 2026
accompanying notes are an integral part of these consolidated
The accompanying notes are an integral part of these consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statements.
Corporate Credit Union and Subsidiary Consolidated Statements of Changes in Members’ Equity (In Thousands) The accompanying notes are an integral part of these consolidated financial statements.
3,1853,185
(2,899) (3,340)
Thousands)
The accompanying notes are an integral part of these consolidated financial statements. - 10For the Years Ended December 31, 2025 2024
Note
Volunteer Corporate Credit Union and Subsidiary (VolCorp) was created in April 1981 by the general assembly of the State of Tennessee to function as a credit union support system to credit unions in Tennessee to facilitate mergers, joint ventures, and cooperative efforts and to provide credit unions with investment, liquidity, and payment system services. VolCorp is regulated by the Tennessee Department of Financial Institutions’ Credit Union Division and the National Credit Union Administration (NCUA).
The accounting policies of VolCorp conform to accounting principles generally accepted in the United States of America and to general practices within the credit union industry. The following represent the more significant of those policies and practices:
The accompanying consolidated financial statements include the accounts of VolCorp and its wholly-owned subsidiary, Symphony, LLC. Symphony, LLC was formed in November 2020. All significant intercompany balances and transactions have been eliminated in consolidation.
The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). The Financial Accounting Standards Board (FASB) provides authoritative guidance regarding U.S. GAAP through the Accounting Standards Codification (ASC) and related Accounting Standards Updates (ASUs).
The preparation of U.S. GAAP consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. Estimates that are particularly susceptible to significant change in the near term are related to estimating the fair value of financial instruments and the status of contingencies.
In the normal course of business, VolCorp invests in highly rated domestic corporations and uses nationally recognized broker/dealers in the execution of trades for financial instruments. Exposure to individual counterparties may be significant. In providing financial services solely to the credit union industry, VolCorp is dependent upon the viability of that industry.
At December 31, 2025, VolCorp had $2,815 in deposits held at other financial institutions that were in excess of Federal Deposit Insurance Corporation coverage limits.
Thousands)
Cash and cash equivalents includes cash, deposits held at other financial institutions, and uncollected cash items with original maturities fewer than 90 days.
These accounts represent deposits made by VolCorp’s members that have not cleared the Federal Reserve Bank (Federal Reserve). Such amounts generally become available for investment or withdrawal by members within one to three days. The uncollected cash items represent the amounts due from the Federal Reserve, and the deposits in collection represent the amount due to the members when they become available. These amounts are not interest bearing.
VolCorp acts as an agent in facilitating overnight investment transactions between participating member credit unions and the Federal Reserve. Transactions with the Federal Reserve are facilitated via the Excess Balance Account (EBA) pursuant to Regulation D. VolCorp acts as intermediary for these transactions but is not otherwise obligated by the transaction. VolCorp's consolidated financial statements do not reflect these transactions except for the fees earned. At December 31, 2025 and 2024, VolCorp was agent for participating member credit unions on EBA funds totaling $989,500 and $1,255,900, respectively.
Federal Home Loan Bank (FHLB) capital stock, can only be sold at par or a value as determined by the issuing institution and only to the respective institution or to another member institution. These securities are recorded at cost and evaluated annually for possible impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income.
VolCorp has adopted Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 320 Debt and Equity Securities which requires all investments in debt securities and all investments in equity securities that have readily determinable fair values to be classified into three categories as follows:
Debt and equity securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and reported at fair value with unrealized gains and losses included in earnings. No securities have been classified as trading securities.
Debt securities that VolCorp has the positive intent and ability to hold to maturity are classified as held to maturity securities and reported at amortized cost using a method that does not differ materially from the level interest yield method.
Securities (continued)
Securities Available for Sale
Debt securities not classified as either held to maturity debt securities or trading securities are classified as available for sale securities and reported at estimated fair value with unrealized gains and losses excluded from earnings and reported as other comprehensive income (loss) within members’ equity.
If quoted market prices are not available, fair values are estimated by using pricing models, quoted prices of securities with similar characteristics, or discounted cash flows.
Premiums and discounts are recognized in interest income using the interest method over the period until maturity or the expected maturity date based on prepayments. Gains and losses on investment dispositions are recognized using the specific identification method for determining the cost of securities sold.
A debt security is placed on nonaccrual status at the time any principal or interest payments become 90 days delinquent. Interest accrued but not received for a security placed on nonaccrual is reversed against interest income. No debt securities are on nonaccrual status as of December 31, 2025.
For available-for-sale debt securities in an unrealized loss position, VolCorp first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For debt securities available-for-sale that do not meet the aforementioned criteria, VolCorp evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income.
Changes in the allowance for credit losses are recorded as credit loss expense (or reversal). Losses are charged against the allowance when management believes the uncollectibility of an availablefor-sale security is confirmed or when either of the criteria regarding the intent or requirement to sell is met.
Thousands)
Accrued interest receivable on available-for-sale debt securities totaled $3,298 and $4,051 at December 31, 2025 and 2024 and is excluded from the estimate of credit losses.
As of December 31, 2025 and 2024, there is no allowance for credit losses recorded on availablefor-sale securities.
Investments in Credit Union Service Organizations (CUSOs) are recorded using the equity method of accounting for investments in entities in which it has an ownership interest, but does not exercise a controlling interest in the operating and financial policies of an investee. Under this method, an investment is carried at the acquisition cost, plus the CUSO's equity in undistributed earnings or losses since acquisition. VolCorp periodically tests its investments for potential impairment whenever events and circumstances indicate the need for such assessment. The equity method is considered appropriate due to either VolCorp’s percentage of ownership or the ability to exert influence over the CUSOs.
Loans are stated at unpaid principal balances. No allowance for credit losses has been established as all outstanding loans are secured by a general or specific pledge of the member credit unions’ assets, and there have been no historical losses. Interest on loans is recognized over the terms of the loans and is calculated on principal amounts outstanding.
Land is carried at cost. Premises and equipment are carried at cost, net of accumulated depreciation. Premises and equipment are depreciated using the straight-line method over the estimated useful lives of the related assets which primarily range from 2 to 50 years.
Premises and equipment and other long-term assets are reviewed for impairment when events indicate that their carrying amount may not be recoverable from future undiscounted cash flows. If impaired, the assets are recorded at fair value.
VolCorp is exempt by statute, from federal and state taxes on income related to its exempt purposes. However, VolCorp is subject to unrelated business income tax as discussed below. Accordingly, no provision for income taxes is included in the accompanying consolidated statements of income.
The IRS and certain state taxing authorities are currently revisiting what, if any, products and services provided by state chartered credit unions are subject to unrelated business income tax (UBIT). There is little guidance in the IRS regulation on what activities should be subject to UBIT. The IRS issued guidance in the form of technical advice memorandums. As a result, there is uncertainty regarding whether state chartered credit unions should pay income tax on certain types of net taxable income from activities that may be considered by taxing authorities as unrelated to the purpose for which VolCorp was granted non-taxable status. In the opinion of management, any liability resulting from taxing authorities imposing income taxes on the net taxable income from activities deemed unrelated to VolCorp’s non-taxable status is not expected to have a material effect on VolCorp’s financial position or results of operations.
VolCorp has adopted FASB ASC 740, Income Taxes, which prescribes a recognition threshold and measurement attribute for a tax position taken or expected to be taken in a tax return. FASB ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Management evaluates the tax positions taken on tax filings and consults with outside professionals in evaluating the likelihood of unfavorable results from any such tax positions. The tax years from 2022 and forward remain open to tax audits; however, there are currently no audits for any tax periods in progress.
The deposit in the National Credit Union Share Insurance Fund (NCUSIF) is in accordance with NCUA regulations, which require the maintenance of a deposit by each insured credit union in an amount equal to one percent of its insured shares. The deposit will be refunded to VolCorp if its insurance coverage is terminated, it converts to insurance coverage from another source, or the operations of the fund are transferred from the NCUA Board. VolCorp is required to pay a percentage of total insured shares as insurance premiums to the NCUSIF unless the NCUA Board waives the payment. No payments were made during 2025 and 2024.
PCC is a permanent, non-cumulative equity investment. Payment of dividends is based on available earnings and is not guaranteed. PCC, in the event of liquidation, is subordinate to all other liabilities of VolCorp. Dividends declared on PCC are determined by management and approved by the Board of Directors based on an evaluation of current and future market conditions.
Comprehensive income (loss) consists of net income and other comprehensive income (loss). Other comprehensive income (loss) includes unrealized gains and losses on debt securities available for sale, which are also recognized as a separate component of members’ equity.
Thousands)
Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there are currently such matters that will have a material effect on the consolidated financial statements.
There were no restrictions or requirements related to cash at December 31, 2025 and 2024.
VolCorp has an established process for determining fair values. Fair value is based upon quoted market prices, when available. If listed prices or quotes are not available, fair value is based upon pricing by an independent outsourced firm which uses proprietary models including market data, interest rate yield curves, option volatilities and other third party information. Management reviews the methodology and results of the pricing by the independent outsourced firm. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. Furthermore, while VolCorp believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.
Generally accepted accounting principles have a three-level valuation hierarchy for fair value measurements. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
The three levels are explained as follows:
• Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. A quoted price in an active market provides the most reliable evidence of fair value and shall be used to measure fair value whenever possible.
• Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
• Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Unobservable inputs shall be used to measure fair value to the extent that observable inputs are not available, thereby allowing for valuations in situations in which there is little, if any, market activity for the asset or liability at the measurement.
Thousands)
Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates.
Advertising costs are expensed as incurred. Advertising expense for the years ended December 31, 2025 and 2024 was $59 and $71, respectively.
In the ordinary course of business, VolCorp enters into commitments to extend credit. Such financial instruments are recorded when they are funded.
VolCorp evaluated all events or transactions that occurred after December 31, 2025, through June 9, 2026, the date these consolidated financial statements were available to be issued.
Certain items in prior financial statements have been reclassified to conform to the current presentation. The reclassifications had no impact on net income or members’ equity.
The amortized cost and approximate estimated fair value of securities available for sale and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) at December 31, 2025 and 2024 were as follows:
Asset-backed securities consist primarily of securitized credit card, student loan, mortgage, automobile dealer floor plan rece ivables and other assets. At year end 2025, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of members’ equity. At year end 2024, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of members’ equity.
VolCorp sold no securities during the years ended December 31, 2025 and 2024.
The amortized cost and estimated fair value of securities available for sale at December 31, 2025, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.
Information pertaining to securities with gross unrealized losses for which an allowance for credit losses has not been recorded at December 31, 2025 and 2024, aggregated by investment category and length of time that individual securities have been in a continuous loss position, are as follows:
Thousands)
At December 31, 2025 and 2024, VolCorp had 88 securities and 91 securities, respectively, in a loss position. Unrealized losses on debt securities have not been recognized into income because the issuers’ bonds are of high credit quality, management does not intend to sell, it is likely that management will not be required to sell the securities prior to their anticipated recovery, and the decline in fair value is largely due to changes in interest rates and other market conditions. The issuers continue to make timely principal and interest payments on the bonds. The fair value is expected to recover as the bonds approach maturity. As a result, VolCorp has determined that an allowance for credit losses for debt securities is not necessary as of December 31, 2025 and 2024.
In determining the allowance for credit losses for debt securities, management considers many factors, including: (1) the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether VolCorp has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. The assessment of whether an allowance for credit losses is necessary involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time.
VolCorp’s investment in CUSOs at December 31, 2025 and 2024 were as follows: December 31, 2025
Investments in CUSOs are accounted for under the equity method based on VolCorp’s percentage of ownership or the ability to exert significant influence over the CUSOs.
Thousands)
The following table presents the assets carried at fair value subject to measurement on a recurring basis. Assets are presented as of December 31, 2025 and 2024, by their nature and by FASB ASC 820, Fair Value Measurements and Disclosures, valuation hierarchy:
December 31, 2025
December 31, 2024
There were no liabilities carried at fair value for 2025 and 2024.
The following valuation method was used for assets carried at fair value as of December 31, 2025 and 2024.
• U.S. Government agency securities, asset-backed securities, mortgage-backed securities, and SBA-backed securities – fair values are estimated using pricing models that use observable inputs or quoted prices of securities with similar characteristics. These securities are classified within Level 2 of the valuation hierarchy.
Thousands)
Premises and equipment at December 31, 2025 and 2024, respectively were as follows:
31, 2025
Depreciation expense was $642 and $702 for the years ended December 31, 2025 and 2024, respectively.
At December 31, 2025 and 2024, the balances of the various types of members’ depository accounts are as follows:
31,
Share certificates as of December 31, 2025 are scheduled to mature within one year.
At December 31, 2025, two members’ deposit accounts totaled $262,864 and represented 16.35% of total member depository accounts. At December 31, 2024, two members’ deposit accounts totaled $214,934 and represented 14.83% of total member depository accounts. The aggregate amount of members’ depository accounts over $250 as of December 31, 2025 and 2024 was approximately $1,545,154 and $1,385,864, respectively.
VolCorp, as a member of the FHLB of Cincinnati, is eligible for advances from this bank pursuant to the terms of various borrowing agreements. VolCorp has pledged 94 securities, with a carrying value of $732,979 as collateral under the borrowing agreement with the FHLB of Cincinnati as of December 31, 2025. At December 31, 2024, VolCorp had 98 securities pledged with a carrying value of $707,796 as collateral under the borrowing agreement with the FHLB of Cincinnati.
At December 31, 2025 and 2024, there were no overnight borrowings outstanding on this line of credit. Based on related collateral and VolCorp’s holdings of FHLB stock, Volcorp is eligible to borrow $697,589 of additional funds from the FHLB of Cincinnati as of December 31, 2025.
VolCorp maintains a federal funds line of credit with one regional bank. Securities with a carrying value of $108,613 and $131,196 were pledged as collateral with this bank at December 31, 2025 and 2024, respectively. No amounts were outstanding under this line of credit at December 31, 2025 or 2024, and borrowing availability totaled $70,000. This agreement may be cancelled at the discretion of either party. Effective June 30, 2025, VolCorp renewed an unsecured federal funds facility from another regional bank with a borrowing availability of $15,000. This agreement expires on June 30, 2026. No amounts were outstanding under this line of credit at December 31, 2025 or 2024.
On May 31, 2023, VolCorp entered an agreement for secured borrowings from the Federal Reserve Discount Window. As of December 31, 2025 and 2024, no principal amounts were outstanding and no collateral was pledged under this borrowing agreement.
VolCorp is subject to various regulatory capital requirements administered by the NCUA. Failure to meet minimum capital requirements can initiate certain additional actions by regulators that, if undertaken, could have a direct material effect on VolCorp’s consolidated financial statements. Failure to meet minimum capital requirements would require VolCorp to submit a plan of action to correct the shortfall. Additionally, the NCUA could require an increase in capital to specific levels, reduction of interest, and ceasing or limiting VolCorp’s ability to accept deposits.
Beginning October 2016, a portion of PCC is excluded from Tier 1 capital as defined by the NCUA. The portion of PCC also reduces daily average net assets and monthly moving average net riskweighted assets for the applicable ratio calculations. NCUA Regulations as of December 22, 2017 were modified to include all PCC received from federally insured credit unions when the corporate credit union’s retained earnings ratio is greater than 2.50%.
At December 31, 2025 and 2024, VolCorp’s capital ratios were as follows:
The retained earnings ratio is key in maintaining capital adequacy in compliance with NCUA regulations. Beginning in October 2013, NCUA regulation 704.3 requires corporate credit unions to calculate and report a retained earnings ratio of at least 0.45%. VolCorp’s retained earnings ratio at December 31, 2025 and 2024 was 7.49% and 6.82%, respectively.
On October 5, 2010, VolCorp was issued recovery claim certificates of approximately $59,500 for membership capital accounts and recovery claim certificates of approximately $12,975 for paid in capital accounts to U.S. Central Federal Credit Union previously depleted through recognition of losses. U.S. Central Federal Credit Union was placed into liquidation on October 1, 2010. During 2025 and 2024, VolCorp recognized no corporate credit union liquidation distributions related to the recovery claim certificates.
Based on the discretion of the NCUA and its projections, the remaining paid in capital recovery claim certificates of approximately $6,890 may be satisfied by distributions during future periods. VolCorp recognizes income from corporate credit union liquidation distributions during the period distributed funds are received. As of December 31, 2025, all recovery claim certificates related to membership capital accounts have been redeemed.
Each of the directors of VolCorp is affiliated with credit unions that, in the ordinary course of business, may engage in financial transactions with VolCorp. Outstanding balances of members’ share accounts with these related parties were $307,673 and $252,226 at December 31, 2025 and 2024, respectively. Outstanding loan balances with these related parties were $0 and $12,500 at December 31, 2025 and 2024, respectively.
VolCorp maintains two defined contribution plans. All full-time employees who have been employed at least one month are eligible to participate in the plans. VolCorp contributes an amount equal to 3% of each participant’s eligible compensation to the 401(k) employee savings plan. Under the retirement savings plan, VolCorp contributes an amount equal to 7% of each participant’s eligible compensation to the plan. Benefits are fully vested one year from a participant’s hire date.
VolCorp made contributions to the retirement savings plan of $1,344 and $846 during the years ended December 31, 2025 and 2024, respectively.
The Credit Union has two collateral assignment split dollar agreements between the Credit Union and a key employee. The agreements involve a method of paying for insurance coverage by splitting the elements of a life insurance policy. Under the agreements, the employee is the owner of the policies and made collateral assignments to the Credit Union in return for loans equal to the amount of premiums to be paid on behalf of the employee plus accrued interest at the applicable long-term federal rate when placed into effect in 2017 plus an additional 19 basis points. At the time of death of the key employee, the Credit Union will be paid the loan amounts plus accrued interest and the balance of the insurance benefits will be paid to the designated beneficiaries. As of December 31, 2025 and 2024, the balance of the loan approximated $6,212 and $6,135, respectively, and is included in credit union owned life insurance and annuity contracts on the consolidated balance sheets.
During 2025, the Credit Union purchased various deferred annuity investment contracts to fund the benefits under certain deferred compensation plan agreements. At December 31, 2025, the outstanding investment in the annuity contracts totaled $15,123.
Thousands)
In the normal course of business, there may be various outstanding legal proceedings or potential claims. In the opinion of management, after consultation with legal counsel, the financial position of VolCorp will not be affected materially by the outcome of any such legal proceedings or potential claims.
Some financial instruments, such as loan commitments, irrevocable letters of credit, and lines of credit, are issued to meet member-financing needs. These are agreements to provide credit or to support the credit of others as long as conditions established in the contract are met and usually have expiration dates. Commitments may expire without being used. These instruments contain, to varying degrees, elements of credit and market risk in excess of the amounts recognized in the balance sheets. The credit risk relates to the possibility that a loss may occur from the failure of another party to perform according to the terms of a contract.
The market risk relates to the possibility that future changes in market prices may make a financial instrument less valuable or more onerous. The same credit policies are used to make such commitments as are used for loans, including obtaining collateral upon exercise of the commitment. The contractual amount of financial instruments with off balance sheet risk at December 31, 2025 and 2024 were as follows:
December 31, 2025 2024
MANAGEMENT REPORT REGARDING STATEMENT OF MANAGEMENT'S RESPONSIBILITIES, COMPLIANCE WITH DESIGNATED LAWS AND REGULATIONS, AND MANAGEMENT'S ASSESSMENT OF INTERNAL CONTROL OVER FINANCIAL REPORTING
The management of Volunteer Corporate Credit Union and Subsidiary (the “Corporate”) is responsible for preparing the Corporate’s annual consolidated financial statements in accordance with generally accepted accounting principles; for designing, implementing, and maintaining an adequate internal control structure and procedures for financial reporting, including controls over the preparation of regulatory financial statements in accordance with the instructions for the NCUA 5310 – Corporate Credit Union Call Report; and for complying with Federal and, as applicable, State laws and regulations pertaining to affiliate transactions, legal lending limits, loans to insiders, restrictions on capital and share dividends and regulatory reporting that meets full and fair disclosure.
The management of the Corporate has assessed the Corporate’s compliance with Federal and State laws and regulations pertaining to affiliate transactions, legal lending limits, loans to insiders, restrictions on capital and share dividends and regulatory reporting that meets full and fair disclosure during the fiscal year that ended on December 31, 2025. Based upon its assessment, management has concluded that the Corporate complied with the Federal and State laws and regulations pertaining to affiliate transactions, legal lending limits, loans to insiders, restrictions on capital and share dividends and regulatory reporting that meets full and fair disclosure during the fiscal year that ended on December 31, 2025.
The Corporate’s internal control over financial reporting is a process effected by those charged with governance, management, and other personnel, designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of reliable consolidated financial statements in accordance with accounting principles generally accepted in the United States of America and financial statements for regulatory reporting purposes, i.e., NCUA 5310 – Corporate Credit Union Call Report. The Corporate's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Corporate; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America and financial statements for regulatory reporting purposes, and that receipts and expenditures of the Corporate are being made only in accordance with authorizations of management and directors of the Corporate; and (3) provide reasonable assurance regarding
prevention, or timely detection and correction of unauthorized acquisition, use, or disposition of the Corporate's assets that could have a material effect on the consolidated financial statements.
Internal control over financial reporting has inherent limitations. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override.
Because of its inherent limitations, internal control over financial reporting may not prevent, or detect and correct, misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.
Management assessed the effectiveness of the Corporate's internal control over financial reporting, including controls over the preparation of regulatory financial statements in accordance with the instructions for the NCUA 5310 – Corporate Credit Union Call Report, as of December 31, 2025, based on the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework (2013). Based upon its assessment, management has concluded that, as of December 31, 2025, the Corporate's internal control over financial reporting, including controls over the preparation of regulatory financial statements in accordance with the instructions for the NCUA 5310 – Corporate Credit Union Call Report, is effective based on the criteria established in Internal Control—Integrated Framework (2013)
The Corporate’s internal control over financial reporting, including controls over the preparation of regulatory financial statements in accordance with the instructions for the NCUA 5310 – Corporate Credit Union Call Report, as of December 31, 2025, has been audited by Carr, Riggs & Ingram, LLC, an independent public accounting firm, as stated in their report dated June 9, 2026.
President and Chief Executive Officer
Justin Holt, Chief Financial Officer
ADDRESS
ADDRESS 2460 Atrium Way Nashville, TN 37214
2460 Atrium Way Nashville, TN 37214
ONLINE volcorp.org vportfolio.org symphonycuso.org volcorpdesign.org
ONLINE volcorp.org vportfolio.org symphonycuso.org volcorpdesign.org
NUMBERS
(615) 232-7900 (800) 470-3444
Operations Fax: (615) 232-7979
EXTENSIONS
1 - Member Services/Operations/Item Processing/ACH
2 - Investment Sales
3 - Marketing and Business Development
4 - Administration and President’s Office
8 - Symphony CUSO
9 - Dial By Name Directory
0 - Operator
HOURS
Monday, Tuesday, Wednesday and Friday: 7:30 a.m. to 4:30 p.m. (Central time). Thursday: 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. Government Agency