Innovation | the business case for risk taking Rick Rambo | Director | FORUM Credit Union Doug True | President | FORUM Solutions & SVP of Innovation @ FORUM Credit Union

I CU

Innovation Grading Scale Promote Change Neutral Risk Averse – Status Quo

I our model

partner architect business owner corporate pharmaceuticals retired corporate telecommunications asst. school superintendant Retired corporate telecommunications former Enterprise executive – now realtor commercial building executive business owner

Trust

New Members & Businesses Net Interest Margin Loan Mix/Growth Member Deposit Mix/Growth Member ROA Liquidity Market/ Account Growth Assets Under Management Cross-Sells/Referrals Non-Interest Income Expense/Income Ratio Net Worth Ratio

..directorsOrganizational.xls Year-to-Date Name Goal Actual Variance Year-End Goal Member Satisfaction Loyalty Index 90% 88.5% -1.5% 90% Raddon Quarterly Survey Satisfaction % 90% 95% 5% 90% ROA ROA 0.32% 0.45% 0.13% 0.60% ROE 3.34% 4.68% 1.34% 6.36% Yield on Assets 5.85% 5.80% -0.05% 6.05% Cost of Funds 3.15% 3.09% -0.06% 3.27% Net Interest Margin 2.70% 2.71% 0.01% 2.78% Fee Income $4,277,664 $4,218,767 ($58,897) $14,200,000 Net Income $1,055,566 $1,482,875 $427,309 $6,200,000 Net Worth Ratio 9.41% 9.64% 0.23% 9.36% Expense to Income Ratio 52.26% 52.76% 0.50% 49.06% Delinquency Ratio 1.11% 0.99% -0.12% 1.00% Net Charge-off Ratio 0.35% 0.39% 0.04% 0.35% Provision for Loan Loss Expense $1,500,000 $1,500,000 $0 $4,500,000 Liquidity Total Assets $1,014,000,000 $993,215,935 ($20,784,065) $1,075,000,000 Liquidity Ratio > 3.00% 6.87% 3.87% 5.52% Loan Originations $125,791,000 $112,643,272 ($13,147,728) $431,198,000 Yield on Originations 8.10% 8.26% 0.16% 8.07% Total Loan Balances $847,077,611 $837,925,538 ($9,152,073) $923,925,000 Yield on Loans 7.04% 7.02% -0.02% 7.20% Total Deposit Balances $702,134,052 $701,335,542 ($798,510) $732,895,000 Cost of Funds - Deposits 3.19% 3.17% -0.02% 3.31% Loan to Deposit Ratio 121% 119% -1% 126% Borrowed Funds $205,347,948 $184,149,583 ($21,198,365) $230,755,000 Cost of Funds - Borrowing 4.73% 4.71% -0.02% 4.82% Market & Account Growth Membership 96,120 95,682 (438) 98,500 Assets Under Management - FORUM 1st $92,835,226 $96,821,865 $3,986,639 $115,000,000 Quality Referrals - Closed 916 1,116 200 2,760 Retail Checking - Net Account Growth (#) 467 946 479 1,475 Retail Checking - Average Account Balances $2,071 $2,003 ($69) $1,850 Business Checking - Net Account Growth (#) 80 159 79 275 Business Checking - Average Account Balances $16,899 $12,335 ($4,565) $18,250

Process

Consistent Processes

Examples building businesses product offerings delivery channels

burial plot financing - $2,000 - $5,000 5% rate & $50 application fee 200 – 400 monthly new members full recourse

burial plot financing - $2,000 - $5,000

5% rate & $50 application fee

200 – 400 monthly new members

full recourse

In today’s hyper-competitive world maintaining the status quo is no longer an option.

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