Board Of Directors Report Of The Diedra Harris-Brooks

2020Annual Report

Message from thePresident/CEO and Board ChairpersonAfter 94 years of service, what priorities must we pursue to ensure that our Pride and Performance stays intact?We must continue to maintain a safe and sound Credit Union. We must continue to reduce operating expenses.We must continue to increase revenue (take on more risk). We must continue to improve overall Credit Unionoperational efficiency, and we must continue to control loan and debit card losses.During the last fiscal year, we continued to have low loan losses and experience low delinquencies. However, thedevastating impact the coronavirus pandemic (known as COVID-19) had on the economy altered the way we wereable to do business. Our loan portfolio declined from the previous year and our investment portfolio saw a declinefrom the previous year. The credit union also saw a large increase in asset growth (which affected our net capitalratio) and a large drop in our net income from the previous year.In spite of these challenges, in August 2020 we converted to our new CORE system (Symitar - a Jack HenryCompany) which has improved our member’s overall experience and continues to improve our employee’stransaction processing efficiency. Also, in April 2020 we started our Certificate of Deposit special rate promotion(new money) which was a success.We are very appreciative that our members and staff continue to maintain confidence and trust inPriority One Credit Union.What Is Ahead This Coming Fiscal Year?Our committed volunteers, management team and staff will continue to offer our member-owners quality productsand services that help you win with money.Starting in April 2021, and throughout the year, there will be facility improvements made at all three of our branches.Starting in May 2021 we will be offering a Visa Credit Card promotional rate that will benefit our members.This promotion will conclude on September 30, 2021.Finally, our Debit and Credit Cards will be upgraded to digital wallets sometime during the Summer.We will continue to work to increase memberships and promote participation in the credit union by continuing toadvertise our products and services to all employees in our Postal service areas and within our three (3) communitycharter areas.Remember: All eligible family members can join the credit union. You may let them know they too can enjoythe convenience and security that our products and services have to offer. Also remember that when youmove out of state you can still keep your membership active with Priority One. Shared Branching locationsand the Co-Op network of nationwide ATMs are such great benefits to all members.Find locations on our website by going to www.priorityonecu.orgAs our valued member, we always welcome any suggestions you may have to help us serve you better as YourFinancial Fitness Center — because you are the driving force behind the Pride and Performance we pursue atthe Credit Union.Charles R. Wiggington Sr.President/CEODiedra E. Harris-BrooksBoard Chairperson

Report of theSupervisory CommitteeThe Supervisory Committee is responsible for ensuring that the Board of Directors andManagement of Priority One Credit Union meet the financial objectives and establishedpractices and procedures to safeguard member assets.As the members’ representative, the Supervisory Committee’s primary function is to makeinternal audits that assure corporate records are prepared accurately, and internal controls,policies and procedures are maintained and followed.Our audits show that the Board of Directors have established sufficient policies andcontrolled procedures to protect against error, conflict of interest, self-dealing and fraud.The Supervisory Committee will do our part to assure that our Pride and Performance arethe driving forces for your Credit Union after 94 years of service.Hazel Brown-HarveyChairReport of theBoard TreasurerThe Treasurer of Priority One Credit Union has a duty to oversee the accuracy of the financialreports as presented to the Board of Directors by the management of the Credit Union. Fiscalyear 2020 proved to be a challenging year for many. However, through strategic planning andmaintaining a healthy net worth has helped us navigate thorugh the COVID-19 pandemic.POCU continued to operatate in a safe and sound manner with nearing 40M in assetgrowth. We preserved our healthy assets to end the fiscal year at 208.6 million.Despite impacts from the pandemic, POCU ended the fiscal year with a 77 basis pointgrowth in total net equity. By controlling operating expenses and managing risk efficiently, theCredit Union was able to end the year with 8.89% in net capital. Which is considered “WellCapitalized” by the National Credit Union Administration.As we move into the 95th Year of Pride and Performance, please rest assured that the Boardof Directors and Credit Union management are working around the clock to invest time andresources to provide members with exceptional financial products and customer service.Without such a loyal membership POCU would not be where it is today. Thank you to ourmembers for your confidence and trust. Our commitment to maintaining a safe and soundfiscal responsibility is unwavering.Art NowTreasurer

Summary Statement ofFinancial ConditionFor Fiscal Years Ended March 31,2021ASSETSCash and EquivalentsInvestmentsLoans to members, net of theallowance for loan lossesUnrealized Investment Gain (Loss)Accrued Income ReceivableProperty and EquipmentFederal Share InsuranceFund DepositOther Assets2020 81,994,12336,411,215 5,200,9271,406,9085,214,118 208,669,283 168,737,161 188,388,41401,317,045 148,274,21401,196,57300 189,705,459 03512,460,589Total Net Equity 18,540,692 18,398,625Total Member's Equity 18,963,824 19,266,373 208,669,283 168,737,161Total AssetsLIABILITIES AND EQUITYLiabilitiesMember's SharesBorrowed FundsAccrued Expenses andother liabilitiesCommitments andcontingent liabilitiesTotal LiabilitiesMember's EquityUnrealized Investment Gain (Loss)Regular ReserveUndivided EarningsTotal Liabilities & Member's EquityMissionTo help our member-owners and employees achieve Financial Fitness.

Summary Statement ofIncome and ExpenseFor Fiscal Years Ended March 31,2021INTEREST INCOMEInterest on Loans to membersInterest on Investment andcash equivalents2020 3,856,445 4,224,420735,4541,316,695 4,591,899 5,541,115 268,681 156,15804,323,21805,384,957PROVISION FOR LOAN LOSSES(87,825)178,628NET INTEREST INCOME AFTERPROVISION FOR LOAN ,622,271605,5733,227,844 7,070,263 8,434,172 3,752,5922,248,618370,785612,191(27)(55,963) 3,824,9782,467,457345,432554,539(4)(11,623) 6,928,195 7,180,780 142,067 1,253,393Total Interest IncomeINTEREST EXPENSEDividend on member's sharesInterest expense on borrowedMoney & Pre-PaymentNET INTEREST INCOMENON INTEREST INCOMEFees and ChargesOtherTotal Non-Interest IncomeTotalGENERAL & ADMINISTRATIVE EXPENSESSalaries and BenefitsOffice operationsOffice occupancyOtherLoss (Gain) on Disposal of AssetsLoss (Gain) on Sale of InvestmentTotalNet Income (Loss)VisionWe are committed to offering quality products and servicesthat help you Win With Money.

Composition of Loan PortfolioUnsecured7%%331% CreditCards57Real EstateAutoLoans%2%OtherSecuredComposition of Deposit icatesSavings

HistoryIn 1923, seventeen postal employees met to organize an association for the benefit of postalemployees in Los Angeles County. In 1926, the Credit Union was organized as“The Los Angeles Postal Employees Savings and Loan Club.”State Charter was granted in 1929 and the Credit Union formally changed its name toPostal Credit Union of Los Angeles.After nearly 74 years as Postal Credit Union of Los Angeles, our name was changed toPriority One Credit Union in July 2000.We currently offer membership to United States Postal Service employees and their familiesfrom the Bishop County line to the Arizona border; we offer membership to employees andtheir families to more than 20 Select Employer Groups (SEG’s) ; we offer membership tothose residing, employed, attending school, or worshiping within the San Fernando Valley, theSanta Clarita Valley and the City of South Pasadena.

Board Of DirectorsDiedra Harris-Brooks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ChairBobby Thomas. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vice ChairArt Now. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TreasurerO. Glen Saffold. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SecretaryTyree Jackson. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . MemberPierre R. Bohamed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . MemberBrochelle Hale-Corhn. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . MemberSupervisory CommitteeHazel Brown-Harvey. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ChairAnna Smith. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SecretarySheila Harris. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . MemberRita A. Rhea-Perry. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . MemberLora Rayne Ary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . MemberSenior ExecutivesCharles R. Wiggington, Sr . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . President/CEOPatricia Loiacano. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vice President Risk SolutionsRobert West. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vice President Employee Services & TrainingSimona Hollins. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vice President FinanceExecutivesCelinda Grande. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Assistant Vice President OperationsGema Pleitez . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Assistant Vice President Support ServicesRandall McBride . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Director Information TechnologySonia Villa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Director Lending25 Years of ServiceHector CorreaCharles R. Wiggington, SrPatricia LoiacanoGema Pleitez10 Years of ServiceLorena AguilarColleen GreavesRandall McBrideMarta RodriguezLillian ValladaresArmando Perez BarajasMichele BarraganSimona HollinsBrenda MorenoLino AlvaradoJennifer HernandezRamona MedinaEsmeralda SandovalSonia Villa5 Years of ServiceBenjami ArboledaCelinda GrandeDiane HuffmanJamie SteinbergMaria CadenaSerene HurstCrystal RoaNaira TimourianRobert WestDaniel BallesterosAdriana GrayVilija LeskauskaiteAna SanchezYour savings federally insured to atleast 250,000 and backed by the full faithand credit of the United States GovernmentFederally Insured by NCUA

Your savings federally insured to at least 250,000 and backed by the full faith and credit