2023 ANNUAL REPORT
MISSION BUILD BETTER LIVES THROUGH EXCEPTIONAL MEMBER EXPERIENCES, EVERY TIME VALUES PURPOSE EVERYBODY COUNTS, EXCEED MEMBERS’ AND TEAM MEMBERS’ EVERYBODY CARES, EXPECTATIONS, INSPIRING THEM TO ACHIEVE EVERYBODY DELIVERS, THEIR FINANCIAL GOALS AND DREAMS EVERY DAY Membership is open to those who live, work, worship, or attend school in the counties of Los Angeles, Orange, Riverside, and San Bernardino. For more information, visit CUSoCal.org. 1 CREDIT UNION OF SOUTHERN CALIFORNIA 2023 ANNUAL REPORT
JOINT REPORT OF THE CHAIRPERSON AND PRESIDENT/CEO Seventy years ago, our mission to Build Better Lives began. Like the small, single branch credit union in Whitter where that mission formed, the idea grew in proportion and momentum over the years. Now, 70 years later and with 23 branches, our mission remains the same; however, our Membership and resources to carry out that mission have increased signifcantly. In 2023 our Membership grew nearly 8 percent, totaling 154,726 Members. We also closed the year with nearly $3 billion in assets. Thanks to another fruitful year, Credit Union of Southern California (CU SoCal) has more tools than ever to Build Better Lives and deliver Exceptional Member Experiences, Every Time. As we look back on the successes of 2023 chronicled in this report, and look forward to celebrating 70 years of CU SoCal, let us also celebrate our valued Members. Without them, we would not be where we are today. To enhance our Member experience in 2023, we added fve brick and mortar locations through partnerships and implemented artifcial intelligence (AI technology) to enhance our processes. Last year, we also rolled out Rewards+, our loyalty program providing fnancial benefts for qualifed Members. An annual report is primarily about fnancial performance, and 2023 represented another successful year for CU SoCal. To us, however, an annual report also shows we are a fnancial institution closely connected with local communities and impactful causes—one that values character as much as credit scores. The fnancial fgures and statistics included throughout this document echo our commitment to our local communities and causes, you, our Members, and our perpetual pursuit of helping you achieve your fnancial aspirations. Our dedicated Board of Directors, Supervisory Committee, and CU SoCal team members are all committed to our mission to Build Better Lives. Along with our Members, these are the people responsible for our success, and we are sincerely thankful for all of them. Christopher George Dave Gunderson Board Chairperson President/CEO CREDIT UNION OF SOUTHERN CALIFORNIA 2023 ANNUAL REPORT 2
2023 HIGHLIGHTS Distributed $17.4 million to Members in direct fnancial benefts1 $255 Average annual savings per Member household1 Members earned $24.7 million in dividends In order to carry out our mission to Build Better Lives® Through Exceptional Member Experiences, Every Time, we are committed to adapting to the changing needs of our Members in an increasingly digital landscape. Our tailored products, services, and improved Digital Banking are all results of this commitment. Each change we make is meant to beneft our Members now and for the next 70 years. Some of the year’s fnancial highlights are listed below. At year end: V Our Membership increased by nearly 8%, and we ended the year with 154,726 Members. V Our loans grew by $142.5 million, a 9% increase. V Our assets topped $2.95 billion. V Our net worth ratio was 11.02%, exceeding the industry standard where 7% is considered “well capitalized.” V Our net income of $28.2 million exceeded our previous high of $25.9 million in 2022. V Our return on assets reached 1.02%. V We earned a superior 5-star fnancial stability rating from BauerFinancial. V Our Members earned $17.4 million in direct fnancial benefts.1 V Our Members earned $24.7 million in dividends. V Our Members saved $4.9 million on lower interest rates on loans.1 V Our Members received an average of $255 in household savings.1 1 Source: Credit Union National Association Membership Benefits Report, September 2022-September 2023. 3 CREDIT UNION OF SOUTHERN CALIFORNIA 2023 ANNUAL REPORT
A BETTER FINANCIAL FUTURE Building Better Lives for our Members extends beyond great rates and low fees. Our purpose is also to provide quality fnancial education and advice to empower our Members and aid them on their fnancial journey. Members have access to a wide array of informational resources, meant to guide them down the path to fnancial wellness. Highlights include: V We ofered nearly 300 educational blogs, in addition to short videos and online modules. V We hosted 101 in-person workshops, lunch-and-learn events, seminars, and webinars. EXCEPTIONAL MEMBER EXPERIENCES Our team is fueled by a sincere passion to help and a steadfast dedication to always do what’s right. This is who we are: a Member-owned fnancial institution working for you, our Members. This diferentiates us in the vast landscape of fnancial institutions vying for your business. Our Members-frst mindset can be seen in our strong Relationship Net Promoter Scores (RNPS), a crucial metric for determining Member loyalty. Our overall RNPS for 2023 was 76 percent, and our Q4 RNPS was between the 95th and 100th percentile in the industry.2 Going above and beyond is our norm. We’re prepared to reach new heights for our Members, and nothing gives us greater joy than watching them soar with newfound fnancial freedom. Highlights include: V Named “Best Credit Union in Orange County” by Orange County Register readers. V Modified our Online and Mobile Banking platforms to enhance functionality, self-service options, and navigation. These improvements placed us among the top 5 percent of peers in Overall Satisfaction (OSAT) score for the first three quarters of 2023 and earned us a Best in Class ranking among peers for Q4.2 2 Figures provided by Member Loyalty Group (MLG), a Credit Union Service Organization dedicated to measuring Member feedback. 101 Free fnancial education classes and webinars Members saved nearly $4.9 million on lower interest rates on loans1 Voted No. 1 credit union in Orange County CREDIT UNION OF SOUTHERN CALIFORNIA 2023 ANNUAL REPORT 4
5-star superior rating by BauerFinancial $416,000 donated to CU SoCal Helping Hands and other non-proft organizations 730 hours volunteered in our communities by CU SoCal team members and loved ones BUILDING STRONGER COMMUNITIES Helping our communities is just another way we Build Better Lives, and the commitment to our communities has been a CU SoCal staple for 70 years. That dedication to the communities we serve continued in 2023. Our team members devoted their time, energy, and dollars to support local charities and foundations, including CU SoCal Helping Hands, our employee-inspired charity. Highlights include: V Team members and their families enthusiastically volunteered 730 hours to local schools and charities. V $416,000 was donated to various local charities, including CU SoCal Helping Hands. ENHANCING THE MONEY MANAGING EXPERIENCE We believe in providing user-friendly and accessible banking for our Members, enabling them to attend to their banking needs whenever and however they want. In 2023, we continued to enhance the money managing experience by implementing new technology to streamline processes and safeguard our Members’ data. Highlights include: V Built better lives for Members by providing competitive loan products and special high-rate certifcate promotions. V Launched Rewards+, our loyalty program ofering exclusive discounts and rates for qualifying Members. V Launched an AI-based Digital Banking behavioral analysis tool, enhancing our Members’ protection against Digital Banking account takeovers. V Implemented a predictive analysis model, which helps improve the Member experience by streamlining consumer loan applications. V Completed partnerships with Cal Bear Credit Union (CBCU), Pacifc Transportation Federal Credit Union (PTFCU), and Printing Industries Credit Union (PICU), adding fve branch locations. 5 CREDIT UNION OF SOUTHERN CALIFORNIA 2023 ANNUAL REPORT
2024 VISION Our 2024 vision is clear: deepen relationships, enhance experiences, and exceed expectations. We look forward to ofering more resources, convenience, and value for our Members. We will also continue to focus on your valuable feedback to make your experiences with us more streamlined and convenient. Plans include: V Ofering further share certifcate promotions to help increase our Members’ earning power. V Ofering a competitive Home Equity Loan or Line of Credit (HELOC) promotion, providing fnancial relief for Members with equity. V Continuing to evaluate and enhance our cybersecurity program to ensure best practices are in place to safeguard our Members’ information. V Launching a new CUSoCal.org website experience, featuring a new, streamlined navigation. $238 Average annual interest saved fnancing a $30,000 car for 60 months1 Digital Banking Overall Satisfaction (OSAT) score ranked Best in Class for Q4 20232 Increased Membership by nearly 8% from prior year CREDIT UNION OF SOUTHERN CALIFORNIA 2023 ANNUAL REPORT 6
BOARD OF DIRECTORS Credit Union of Southern California’s Board of Directors generously volunteer time throughout the year to ensure the continued strength, security, and value of your credit union. ROW 1 (L-R): Christopher George, Board Chairperson Robyn Bjorklund Elizabeth Camp ROW 2: Dawnna Lawrence Paul Moore Gil Rodriguez ROW 3: John Rosenberger Christopher Stone Connie Zappone ROW 4: Stephanie Cuevas, Corporate Advisory Board Member Dona Moseley, Corporate Advisory Board Member 7 CREDIT UNION OF SOUTHERN CALIFORNIA 2023 ANNUAL REPORT
SUPERVISORY COMMITTEE The Supervisory Committee members contribute their time and expertise on a voluntary basis. They meet regularly to examine fnancial statements, internal and external audit reports, and controls. Their task is to ensure ROW 1 (L-R): that CU SoCal is fscally sound. Bob Toohey, Chairperson Greg Kelley The certifed public accounting frm of Turner, Warren, Hwang & Conrad was engaged to perform the annual audit for the fscal year ending June 30, 2023. After reviewing the audit report, along ROW 2: with other reports and records, it was the Judy Miller unanimous opinion of the Supervisory Rosie Robinson Committee that Credit Union of Southern California is fnancially solid and being operated in a safe and sound manner. Bob Toohey, Chairperson ROW 3: David Yamashita Supervisory Committee In loving memory of Ed Paul. Ed joined CU SoCal’s CREDIT UNION OF SOUTHERN CALIFORNIA 2023 ANNUAL REPORT 8 Supervisory Committee in 2012 through a partnership with North Orange County Credit Union. Ed was dedicated to his community and often spent time serving others. His passion for service could be seen in many ways, including contributions to charities such as The American Legion (Fullerton) Veterans’ Organization, weekly platelet donations to The American Red Cross and his long-term dedication to the credit union movement, which spanned more than 30 years.
At December 31, 2023 2022 ASSETS Cash and cash equivalents $332,596,850 $196,615,641 FINANCIAL STATEMENTS Investments 861,739,681 760,383,812 Loans to Members 1,679,970,772 1,537,514,888 Allowance for credit losses (28,852,381) (12,185,440) Fixed assets 20,776,994 23,326,501 Other assets 92,231,336 76,430,400 ASSETS Total assets $2,958,463,252 $2,582,085,802 2023 LIABILITIES AND MEMBERS' EQUITY 2022 LIABILITIES: 2021 Members' share accounts $2,328,415,304 $2,141,047,584 2020 Borrowed funds 425,000,000 300,000,000 2019 Accrued expenses & other liabilities 46,075,993 36,027,307 2018 Total liabilities 2,799,491,297 2,477,074,891 $2,958,463,252 $2,582,085,802 $2,246,765,154 $2,020,459,917 $1,680,021,723 $1,485,094,224 MEMBERS' EQUITY: INCOME 2023 Retained earnings and capital acquired 286,544,797 262,667,225 Accumulated other comprehensive 2022 (127,572,842) (157,656,314) income (loss) 2021 Total Members' equity 158,971,955 105,010,911 2020 Total liabilities and Members' equity $2,958,463,252 $2,582,085,802 2019 2018 Years Ended December 31, $179,480,392 $118,768,507 $90,560,812 $94,039,451 $86,215,255 $73,332,209 2023 2022 EXPENSES INTEREST INCOME 2023 Interest on loans $84,185,548 $59,812,114 2022 Interest on investments 46,863,635 19,266,678 2021 Total interest income 131,049,183 79,078,792 2020 INTEREST EXPENSE 2019 Members' share accounts 24,696,379 4,487,452 2018 Borrowed funds 24,995,505 6,601,370 $126,570,917 $88,369,910 $64,033,111 $69,583,391 $62,806,195 $57,445,539 DIVIDENDS TO MEMBERS Total interest expense 49,691,884 11,088,822 2023 NET INTEREST INCOME 81,357,299 67,989,970 $24,696,379 2022 $4,487,452 PROVISION FOR CREDIT LOSSES 11,857,943 2,635,608 2021 $4,140,787 2020 $5,743,441 NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 69,499,356 65,354,362 2019 $4,432,572 2018 $2,913,580 NON-INTEREST INCOME Fees and charges 14,367,495 12,375,435 $327,342,454 $287,172,311 $255,032,959 $232,401,436 $213,688,817 $191,888,144 REGULATORY NET WORTH Gain on bargain acquisitions of various 2023 3,304,953 - credit unions 2022 Interchange income and other 30,758,761 27,314,280 2021 Total non-interest income 48,431,209 39,689,715 2020 NON-INTEREST EXPENSE 2019 Compensation and benefits 44,261,253 39,318,894 2018 Office operations 10,768,311 9,204,646 Office occupancy 6,356,816 5,494,738 Other 28,331,089 25,114,654 Total non-interest expense 89,717,469 79,132,932 NET INCOME $28,213,096 $25,911,145 9 CREDIT UNION OF SOUTHERN CALIFORNIA 2023 ANNUAL REPORT
BUILDING BETTER LIVES Our industry is flled with people who can count. At CU SoCal, you’ll fnd people you can count on. CREDIT UNION OF SOUTHERN CALIFORNIA 2023 ANNUAL REPORT 10
MEMBER CARE CENTER 562.698.8326 | 866 CU SoCal (866.287.6225) toll-free Monday–Friday: 9 am–6 pm | Saturday: 9 am–1 pm 23 BRANCHES Alhambra | Anaheim | Brea | City of Industry | Colton | Costa Mesa FEDERALLY Covina | El Monte | Fontana | Fullerton | Gardena | Garden Grove INSURED La Habra | Los Angeles (3) | Ontario | Orange BY NCUA Pomona | Riverside | Whittier (3) MAIL P.O. Box 76000 Anaheim, CA 92809 EMAIL [email protected] WEBSITE/CHAT CUSoCal.org MOBILE BANKING Download free Mobile Banking app at CUSoCal.org FREE ATMs & SHARED BRANCHES Text | 91989 with your zip code (ATMs only) Download free app | CUSoCal.org Visit | CUSoCal.org