Vital Statistics:as of January 31, 2020

ASSETS: $82,737,963SHARES: $72,556,468LOANS: $40,057,176MEMBERS: 5,115

Holidays:May 25th - Memorial DayJuly 3rd - Independence Day

(Observed)July 4th - Independence DayAll credit union offices will be closed in observance of the above holidays. Please check mymembersfirst.org for additional closings and inclement weather updates. Federally insured by NCUA. Equal Housing Lender.

Inside:Looking with 2020 Vision Board of DirectorsBy the Numbers2019 Financial Condition

More at: mymembersfirst.org

A quarterly publication from TN Members 1st FCU - April 2020 mymembersfirst.org

Looking with 2020 VisionAn update from your Board of Directors Chairperson, Don QuinleyDuring 2019, Tennessee Members 1st Federal Credit Union’s Board, President/CEO, and officers have continued to initiate policies and programs to strengthen our abilities to encourage membership growth, develop opportunities to lend responsibly, manage our investments wisely, and spend your money carefully to achieve an operationally sound institution. As the world of financial services undergoes significant changes, we direct our efforts to maintain agility and focus on our community. In 2020, our goals include efforts to become certified as a Community Development Financial Institution so that we may leverage, through the U.S. Department of the

Treasury, lending programs to those in our community who often fall victim to predatory lenders such as payday lenders. We also are increasing business lending through cooperatively participating with other small credit unions to secure large sound loans to development projects. As part of our ongoing remote technology programs, we will soon add capabilities such as online account opening. Did you know that we are the only local credit union that provides free identity theft protection? We have partnered with one of the nation’s most trusted names in Identity Theft Protection to provide all of our members with a comprehensive Identity Theft Research, Remediation and Recovery Service. You can learn

more about your free coverage by clicking Identity Theft Protection under the Our Services tab on mymembersfirst.org. REFLECTING ON 2019 Your credit union is very strong and well-capitalized as evidenced by reserves at 11.83%. A well-capitalized credit union, as measured by the National Credit Union Administration (NCUA), has at least 7% in reserves. Our return on average assets was 0.01% with nearly all gross income returned to our members in the form of low loan rates, attractive certificate specials, and a low fee structure. Our income goal for 2020 is set at 0.10%. The credit union continues to manage

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CELEBRATING 75 YEARS OF SERVICE

A quarterly publication from TN Members 1st FCU - April 2020 mymembersfirst.org

expenses carefully with a 3.53% operating expense ratio (expenses vs. assets), which is 7% below our peers. In 2019, we have maintained low fees and have achieved a significant reduction of loan losses and charge-offs of 0.27% (over 40% less than our peers). We continue to focus on reducing loan delinquencies by employing responsible lending policies and working with members to assist and employing new insurance programs to reduce losses. By continuing to have low operating expenses and working on reducing our low loan losses, we can offer competitive rates to our members. We continue to examine our policies and procedures not only to comply with NCUA requirements but also to develop business agility and member service culture to provide the best use of our resources to improve our service to you. In its 2019 examination, the NCUA found only a few minor issues with the Credit Union’s operation and policies, which have already been addressed. Our independent Accountant’s Report is a good bill of health with no exceptions. Your credit union leverages its staff’s capabilities by employing leading professional providers for Human Resources, Investments and Asset Loss Management as well as Information Technology (IT). MAKING THE CREDIT UNION YOUR BEST BUSINESS While we have a well-lead staff of dedicated employees, the credit union continues to need your involvement through your input and participation as volunteers for the various necessary unpaid/non-staff committees required by regulation and to operate effectively to serve the membership. I encourage you to ask what you can do to make the credit union your best business. Thank you for your continued support of your credit union. As fellow member-owners of Tennessee Members 1st Federal Credit Union, we all benefit when our credit union succeeds. “It’s All About You!” is our motto. When you receive service at Tennessee Members 1st, we want to live up to our motto every day. Please let us know when you are satisfied with our service and when you are not. After all, you don’t just bank with us, you own us.

The Supervisory Committee meets on a regular basis to examine reports that ensure members’ assets are safe. The Committee performed various audit functions and procedures to test internal controls and ensure accurate record keeping. We continuously monitored credit union compliance with the directives of our regulator and insurer, the National Credit Union Administration (NCUA).

NCUA examiners check our records yearly and the audit firm of G. David Edwards, CPA, PA, performed our 2019 comprehensive audit during March 2020. The Committee continues to review all audit and examination results provided by the auditors and examiners. Based on these results, along with our own observations, it is the opinion of the Supervisory Committee that Tennessee Members 1st Federal Credit Union is in good financial condition and is in compliance with all state and federal regulatory directives. The Committee is pleased to report that members’ assets remain safe and secure.

SUPERVISORY COMMITTEE REPORT

JACKIE PENLAND | CHAIRPERSON, SUPERVISORY COMMITTEE

LOOKING WITH 2020 VISION ...continued from previous page.

DON QUINLEY | CHAIRPERSON, BOARD OF DIRECTORS

Since our start in 1946, we have been proudly providing members with the products and services needed to reach your financial goals. Currently, members can take advantage of various checking, savings, investment, and lending options as well as financial education opportunities, reward programs, and identity protection services. With two branch locations, online banking, the free TN Members 1st mobile app, Audio Response Teller, and our participation in the CO-OP Shared Branching Network, account access is literally at your fingertips, at home and across the country.

In 2021, the credit union will celebrate its 75th anniversary! We hope you will join us throughout the entire year as we reflect on our history, celebrate our journey, and move forward in building for the next 75 years.

As we look toward the future and our ability to best serve you, our members, we’re excited to introduce new financial tools, opportunities, and initiatives launching in the coming months.

ONLINE ACCOUNT OPENINGOur enhanced, online accout opening will provide the option to open a new account or become a member of the credit union all from the convenience of your smartphone, tablet, or desktop!

GREATER COMMUNITY INVOLVEMENT We look forward to providing continued support of community events, introducing new credit union giving initiatives, and actively participating as a corporate member of the Kiwanis Club of Oak Ridge.

CONVENIENT PAYMENT OPTIONSImproved card management, pay by phone, and online options for greater convenience in using and making the most of your Tennessee Members 1st

FCU accounts.

CELEBRATING 75 YEARS OF SERVICE

A quarterly publication from TN Members 1st FCU - April 2020 mymembersfirst.org

BY THE NUMBERS Numbers reflect data as of December 31, 2019

66,487 EMAILSSENT TO MEMBERS

INCLUDING SERVICE OUTAGES, EVENTS &

HOLIDAY HOURS

Assets: 2019 2018Loans to Members $39,985,817 $34,717,586Allowance for Loan Losses ($187,628) ($151,980)Other Receivables $118,375 $81,579Cash & Special Deposits $3,171,716 $3,244,199Investments $34,848,371 $37,128,859Accrued Income $255,254 $274,710Prepaid Expenses $248,590 $208,002Fixed Assets $1,839,840 $1,876,808Other Assets $2,480,015 $2,504,625

TOTAL ASSETS $82,760,350 $79,884,388

Liabilities:Taxes Payable $30,950 $16,874Accrued Expenses $128,179 $132,722Borrowings $0 $0Other Liabilities $235,227 $230,226

TOTAL LIABILITIES $394,356 $379,822

Equity:Shares $72,787,314 $70,368,258Reserves $9,578,680 $9,136,308

TOTAL EQUITY $82,365,994 $79,504,566

TOTAL EQUITY & LIABILITY $82,760,350 $79,884,388

Operating Income 2019 2018Interest from Loans $1,812,818 $1,516,318Investment Income $875,751 $910,762Fees and Charges $172,785 $177,589Other Income $434,302 $384,500

TOTAL OPERATING INCOME $3,295,656 $2,989,169

Operating Expense:Employee Compensation $881,925 $843,511Employee Benefits $206,042 $191,332Travel and Conferences $17,365 $19,292Association Dues $16,179 $16,055Office Occupancy Expense $210,089 $164,508Office Operations Expense $347,512 $311,923Promotion and Marketing $104,734 $38,729Loan Service Expense $503,945 $374,024Professional & Outside Services $515,385 $473,296Supervisory & Examiners $21,579 $21,013Provision for Loan Losses $137,790 $154,629Interest on Borrowed Funds $6,382 $2,781Miscellaneous Expense $44,717 $37,798

TOTAL OPERATING EXPENSE $3,013,644 $2,648,891

Other Non-Operating (Inc) Exp ($163) ($4,317)(GAIN) LOSS on Investments ($37,818) $10,915(GAIN) LOSS Disp. Of Asset ($11) $35,583Dividends to Members $315,249 $215,665Net Income $4,755 $82,433

INCOME STATEMENT BALANCE SHEET

5,113MEMBERS

FOUND IN 37 STATES ACROSS THE COUNTRY

ONLINE & MOBILE USERS

201720182019

4,759 members5,010 members5,113 members

MEMBERSHIP GROWTH201720182019

$30,229,974$34,717,586$39,985,817

LOAN GROWTH

INCREASE IN FACEBOOK PAGE VISITS

MEMBERSHIP SPANNING 7 DIFFERENT GENERATIONS

THANK YOU TO OUR VOLUNTEER BOARD OF DIRECTORS!Above: The Board of Directors at the 2019 Planning Session, pictured L-R: Wayne Missaggia (Vice Chair),

Eric Goins, Michael Prince, Don Quinley (Chair), Sonya Jackson, Gary Beckner (Secretary/Treasurer), Tracy Larabee.

OfficialsSupervisory CommitteeJackie Penland, ChairAl CabeSharon CabePete Johnson

ALM CommitteeDon Quinley, Chair Jeremy BivinsTerri CruzeRick MikelsWayne Missaggia

President/CEORick Mikels

Board of DirectorsDon Quinley, Chair Wayne Missaggia, V. Chair Gary Beckner, Treas/Secretary Eric Goins, Director Sonya Jackson, Director Tracy Larabee, DirectorMichael Prince, Director

Investment Committee Eric Goins, Chair Jeremy BivinsTerri CruzeRick MikelsWayne MissaggiaDon Quinley

Hours of OperationKnoxville - Lobby & Drive ThruMon, Tues, Thurs8:30 am - 5:00 pmWednesday9:00 am - 5:00 pmFriday8:30 am - 5:30 pmSaturdayClosed

Oak Ridge - LobbyMonday, Tuesday, Thursday8:30 am - 5:00 pmWednesday9:00 am - 5:00 pmFriday8:30 am - 5:30 pm

Oak Ridge - Drive ThruMonday - Thursday8:00 am - 5:00 pmFriday8:00 am - 5:30 pmSaturday9:00 am - 12:30 pm

Locations and Contact InfoToll Free Phone800.206.6944

Audio Response Teller (ART)Local: 865.813.4351Toll Free: 866.332.6009

Available 24/7mymembersfirst.orgFree mobile banking app for iOS and Android

Social MediaFind us on Facebook and Twitter by searching for TNMembers1stFCU

Main Office - Oak RidgeP.O. Box 6828112 Administration RoadOak Ridge, TN 37831p: 865.482.4343f: 865.482.2617

Knoxville Office112 Marketplace Blvd. Knoxville, TN 37922p: 865.539.4344f: 865.539.4143

A quarterly publication from TN Members 1st FCU - April 2020

mymembersfirst.org

Our Board of Directors work as a team to help drive the mission of the credit union forward. The candidates below were nominated by the Tennessee Members 1st Federal Credit Union Nominating Committee. Credit union members were asked to vote on the nomination of the individuals below during the 73rd Annual Meeting.

MR. RYAN HOWERTONRyan Howerton currently works as the Director of Communities at 21st Mortgage where they focus on mobile home communities. In this position, he works closely with community operators and retailers to develop and introduce lending programs responsive to their needs. Ryan has held multiple positions at 21st Mortgage throughout his 15-year tenure including Business Development Manager where he worked to develop lending programs and help expand the nation’s largest portfolio of manufactured home loans. A proud University of Tennessee graduate, Ryan majored in economics. He has been a member of the credit union for over 10 years and currently serves on the board for the Ohio Manufactured Housing Association and has previously served on the boards of the Mississippi, Kentucky, and Michigan Manufactured Housing Associations. Ryan and his wife, Kerry, have two daughters.

MS. JUDY STONE WILSONJudy Stone Wilson currently works as a Realtor with Realty Executives Associates in Oak Ridge and is a retired Supervisory Contracting Officer from the United States Department of Energy. Judy has been a member of the credit union since the 1980s and is an active member of Altrusa International, Leadership Oak Ridge Advisory Council, Kern Methodist Church, and Rotary Club of Oak Ridge.

Volunteers are an important part of the credit union and help drive our mission forward. We have several volunteer opportunities for members to participate in, including various committees and our Board of Directors. For more information, including a Volunteer Interest Form, visit mymembersfirst.org/about-us-join-us and scroll to the bottom of the page.

VOLUNTEERING WITH THE CREDIT UNION

Have you recently moved, updated an email address, or gotten a new phone number? Contact the credit union so we can ensure your information is up-to-date in our system.

Important and/or time-sensitive updates such as maintenance, service outages, holiday hours, and inclement weather notices are communicated to our members through multiple channels including email, social media, and notification message viewable on all pages of the website, in addition to in-branch and digital signs.

IS YOUR CONTACT INFO UP-TO-DATE?

Tennessee Members 1st is committed to protecting our members’ personal and financial information. Our Privacy Policy was included with your mailed quarterly statement and can also be found on mymembersfirst.org by clicking Privacy Policy at the bottom of any page.

PRIVACY POLICY