E D U C A T I O N C R E D I T U N I O N 2 0 1 6 A N N U A L R E P O R TFederally Insured by NCUA

Full Bloom

Marcus GlassAdvisory Board

Ken CarriereAdvisory Board

John LemonsEmeritus Director

Daniel CowardDirector, Place 7Term expires 2019

Jody RichardsonDirector, Place 8Term expires 2017

Linda PurdyTreasurer Place 6Term expires 2018

Kel SpradlingDirector, Place 9Term expires 2017

Cody MyersChairman, Place 1

Term expires 2017

Leonida ClevelandSecretary, Place 5Term expires 2018

Duane ChapmanVice Chairman, Place 2

Term expires 2017

Jimmy MarrsDirector, Place 3Term expires 2017

Buddy StephensDirector, Place 4Term expires 2018

Steve WestAdvisory Board

Joe RogersAdvisory Board

Melissa GutierrezBushland Branch Manager

Gypsy AustinPlum Creek Branch Manager

Keelee OlivarezHillside Branch Manager

Vicki FultonCanyon Branch Manager

Sharon White45th Branch Manager

Lindsey MurphyVP of Marketing

Tricia BassDirector of Training

Audra HinojosMember Support Center

Manager

Becky GabhartVP of

Teller Operations

Melissa DurlingVP of

Human Resources

Beth AsheVP of Member ServicesI-40 Branch Manager

Kimberly Frederiksen

VP of Lending

Sarah AaronDirector of Asset

Protection

Stacy NewmanDepartment of

Special Services Manager

Johnny HarrisVP of

Branch Operations

Operationsmanagement team

Branch managers

Gregg BynumPresident/CEO

Jacque BagotSr. Vice President of Information Systems

Claudia BurkettExecutive Vice President/COO

Marcus SmithChief Financial Officer

Senior management

2 3

board of Directors

Start with good

since 1935...Our Mission Excelling in service, care, and financial protection for our members and their families

Our VisionTo be the preferred financial provider through all stages of life

Our Core ValuesSuperior Member ServiceEthical BehaviorLong-term PlanningTeamworkDefect-Free Processes, Products & ServicesFinancial Stability and Long-term SuccessMotivated Board, Management, and StaffRespect for IndividualsCommunity Caring/InvolvementStaff Empowerment

soil

provides location, support, foundation,

and nutrients for growth.

good soil

4

Every year for the past eleven years, Education Credit Union has been voted by readers of the Amarillo Globe News as “Best Credit Union” in Amarillo. Readers of the Canyon News have given their

”thumbs up”, as well. Every business entity in our area would gladly tout such a record of success over a long period of time. This success and recognition does not happen by accident. Careful strategic planning, a highly trained and motivated

staff, and the diligence of dedicated board members all work together to create a very successful venture, indeed. These factors comprise a few of the seeds sown in days past which have blossomed into the successes of the present.

Education Credit Union, in December of 2006, listed member deposits of $99,574,000 while member loans were listed at $78,000,000. Just ten years later, during one

of the greatest economic downturns in America’s history, ECU booked member deposits of $210,000,000 while member loans were sitting at $185,583,000! That is an

incredible show of growth and success!

A significant driver of this remarkable success is lending. While lending has occurred all along in ECU, 2003 brought a more finely tuned risk model, which allowed us to manage overall risk while better serving our members. While brisk lending has been ongoing at ECU, we have also been aggressively funding new initiatives, providing new products,

and building new branches and facilities for member convenience. Now with six locations in Amarillo, Bushland and Canyon, Education Credit Union is poised to serve any customer in person within minutes. Further, our extensive online access creates immediate member access.

Let’s look at a few of the seeds which have been intentionally sown with a vision of success.

Education Credit Union is home to a dedicated and knowledgeable board of directors whose every decision is member-based. Board members undergo a thorough training regimen as they begin their service. Training is ongoing throughout their time on the board of directors. Monthly training topics are brought to the board along with periodic compliance training. The board, since 2002, has consisted not only of full board members but of advisory board members who have the benefit of experience at the board table before eventually becoming members. A recent addition to the board is the emeritus board position. This allows ECU to call on a former board member with extraordinary vision, wisdom, and insight as an advisor to the board. Individuals working together as a board of directors ensure the ongoing success of the credit union, with advice and guidance of the senior staff.

Annual strategic planning is a major cog in the success of your credit union. The board of directors fully participates in a strategic planning event every summer. It is a time to review and evaluate our organizational mission statement, and vision and values statement to be certain all components of the ECU are moving in the same direction. Expert consultants lead the board in an evaluation of the Balanced Score Card,

a planning and measurement system created almost ten years ago. This evolves into the creation of prioritized goals and objectives for the coming twelve to twenty-four months. The management team follows this strategic planning by building annual operating plans and budgets which align with the stated goals and objectives. I must say, I believe strategic planning is key to the present and future success of Education Credit Union.

A few results of strategic planning include the

availability of Visa cards, line-of-credit loans, expanded drive-up hours, home equity lending, home banking, and debit card introduction.

Bricks and mortar, quality products, and strategic planning mean nothing without an excellent staff. That’s exactly what we have here at Education Credit Union! Without our top quality folks, we could not deliver the products and services our members deserve and currently enjoy. The senior staff and board work diligently to be certain we are providing appropriate compensation and benefit programs in order to attract and sustain a superb employee base. Our employees are a key reason we enjoy regular product improvement and process improvement. They are eager to step forward with bold ideas, and

that eagerness is paying dividends. The ECU is about people. Every day, the ECU staff helps our members by taking care of them online, in branches, and via mobile devices. The ECU staff is one of its greatest assets.

Since 1935 seeds have been sown. Those seeds have been nurtured with vision, wisdom, and action. The result is a bountiful harvest, indeed. The Board of Directors is proud of this success. Please know that we take our responsibility seriously. We are committed to continued success in the future.

Respectfully submitted,

Cody MyersChairman of the Board

Sowing the Seeds of SuccessChairman of the Board Report

5

seedsSowing only the best

Each year I look back at the previous year and I am amazed at the accomplishments and achievements of the staff of Education Credit Union. And the year of 2016 was no different. Incredible things were done

during the year. It is only possible because of great people. We have the best staff in the Panhandle of Texas.

Back in 2001, we held our first strategic planning session with the board and senior staff leaders. We focused on the Mission Statement and the need to build more locations to better serve the membership. No one could have foreseen the great things coming over the next fifteen years for our members and for the credit union itself.

ECU has grown from around 9,500 members in 1997 to over 24,000 in 2016. We have gone from one location to six. We have locations in Bushland and in Canyon to better serve members outside Amarillo.

Our staff now fully participates in community activities. And we are a major contributor to the business and social fabric of the towns we serve.

Our assets have continued to grow, funded by strong member deposits and very strong loan demand.

The financial backbone of our cooperative structure is our Reserves and Undivided Earnings which total over $30 million. Addressed as a percentage of assets, this “nest egg” is over 13% of Assets. And this was accomplished without violating our

cooperative principles, and paying above market deposit rates for the last 18 years.

With strong loan demand fueled by below market interest rates and rewarding our members that use the most services, we have been able to increase staff, better train our staff, introduce more services, and stay ahead of the curve on technology. The board of the credit union has made important decisions on adding locations and investment in technology over the last 19 years.

One of the biggest challenges of our organization is adjusting to ever-changing regulations and rules. Federal agencies are changing and creating rules and regulations faster and faster and with more penalties. Training our staff to follow these constantly changing rules is a major issue for the credit union. This is in addition to the constant need to re-train on technology as it changes yearly. Thus, we now have a training staff of four.

The staff has to not only train and adjust, but we have to take care of our valuable member-owners at the same time. Our goal is to meet the requirements of the members each and every time we interface at a location by phone, text, chat, or email. Taking care of you is our top priority.

Below are just some of the accomplishments during the year 2016:

1. Changed debt protection carriers and negotiated lower premiums with higher coverages for our borrowers.

2. Moved to an All – Visa house with better service and lower fees for the credit union.

3. Logged over 90 process improvements during the year.

4. Enhanced or upgraded over 18 products/services.

5. Hired a Community Service Coordinator.

6. Hired a Compliance Coordinator.

7. Launched numerous upgrades to our mobile banking.

8. Launched online car shopping link on our website.

9. Replaced the vendor for our Red Apple Checking account to Benefits Plus with upgraded benefits and online access to benefits.

10. Launched a Super Money Market Account.

11. Launched CORE, developed by our Training department, to train all staff on products and services.

12. Gave out 66 Pocket Change Grants to teachers, totaling $29,664.

13. Won First Place from Cornerstone Credit Union League for Youth Financial Education.

14. Won First Place from National Youth Involvement Board for Youth Financial Education.

15. Won three First Place awards for our Marketing department.

16. Voted Best Credit Union by Amarillo Globe-News readers for the 11th year in a row.

17. Voted Best Credit Union by Canyon News readers.

18. Had staff who served on 20 community boards and attended over 230 community events.

19. Launched successfully EMV chip cards for Debit and Credit.

20. Achieved success with adoption of Overnight ACH processing.

These are just some of the major accomplishments of the staff for the year. I encourage you to review pages 8 and 9 and review our financial and committee reports. I am very proud of what this organization does for the membership.

Education Credit Union was founded on the cooperative principle of “not-for-profit, not-for-charity, but for service, and people helping people.” These concepts and ideals are still followed by our volunteer, non-paid board, and by our staff. We know that everyone can choose their financial provider and move their accounts at any time. Our goal is to serve each of you with dignity, politeness, and with absolute integrity. We appreciate your trust and business.

Our goal is to be your financial partner through All Stages of Life.

Respectfully submitted,

Gregg R. BynumPres/CEOand

watersunshineAdd

Reaping the HarvestChief Executive Officer Report

6 7

Increasesince 2012:24%24,214MEMBERS

Dec. 2016 Dec. 2015 (unaudited) (audited)Income Interest on Loans $ 12,349,875 $ 12,147,303 Interest from Investments $ 317,383 $ 230,574 Fee Income $ 2,535,992 $ 2,504,129Miscellaneous Income $ 3,280,642 $ 2,736,544Total Income $ 18,483,892 $ 16,841,478

Expenses Salaries and Employee Benefits $ 7,267,734 $ 6,996,627 Operating Expenses $ 5,645,299 $ 5,390,278 Total Operating Expenses $ 12,913,033 $ 12,386,905 Provision for Loan Losses $ 2,370,952 $ 2,530,438 Income Before Dividends and Interest $ 3,199,907 $ 2,701,208 Interest on Borrowed Money $ 417 $ 4,878Dividends on Shares $ 519,922 $ 459,110 Interest on Certificates and Deposits $ 543,003 $ 603,350 Net Income $ 2,136,565 $ 1,633,870

Rebates to Members Rebated Fees, Courtesy Pay and NSF $ 115,553 $ 132,651 Cash Loan Incentives Paid $ 48,924 $ 77,279 VISA Rewards Paid $ 21,468 $ 16,257 ATM Fees Reimbursed $ 6,666 $ 6,302Checking Account Incentives $ 3,128 $ 2,650Executive Member Expenses $ 18,184 $ 15,841Annual Meeting Expenses $ 19,905 $ 18,360Shred Week Costs $ 1,405 $

2016 Credit Committee ReportThe Credit Committee is responsible for enforcing lending policies established by the credit union’s Board of Directors and government regulations.

Most loans are processed by our lending department and Member Support Center (Virtual Branch); however, when loan requests exceed a loan officer’s authority, the Credit Committee approves, rejects, or refers the request to the board of directors for consideration.

In 2016, the Credit Committee, Loan Officers, Member Support Center, and Board of Directors approved and executed 5,720 loans, totaling $77,541,448.20. At year-end, we had a total of 7,649 VISA accounts with balances of $12,691,074.

Our basic objective is to make loans to members for worthwhile purposes, with interest rates as good as or better than those available anywhere else.

Dividends, Interest & Rebates to Members 7.03%

11.56% Reserve Accounts

Operating Expenses81.42%

9

Income & Expense

8

Financial Condition Dec. 2016 Dec. 2015 (unaudited) (audited)AssetsLoans, Net of Allowance for Loan Losses $ 183,411,613 $ 174,283,843 Cash $ 12,941,446 $ 11,625,255 Receivables $ 135,907 $ 472,700 Accrued Income $ 806,280 $ 762,907 Investments $ 28,869,228 $ 26,547,531Prepaid and Deferred Charges $ 579,822 $ 189,341 Fixed Assets, Net of Accumulated Depreciation $ 13,609,969 $ 14,293,427 All Other Assets $ 7,532,632 $ 10,297,868 Total Assets $ 247,886,897 $ 238,472,872 Liabilities Dividends Payable $ 496,826 $ 558,296 Accounts Payable $ 1,301,438 $ 753,522 Accrued Expenses $ 2,324,270 $ 1,996,005 Other Liabilities $ 183,758 $ 2,154,437 Total Liabilities $ 4,306,292 $ 5,462,260 Shares and Deposits Shares $ 75,552,954 $ 74,450,408 Certificates and Deposit Accounts $ 134,706,265 $ 127,365,972 Total Shares and Deposits $ 210,259,219 $ 201,816,380 Equity Reserves and Retained Earnings $ 33,361,987 $ 31,225,422 Unrealized Gain/(Loss) on Investments $ (40,601) $ (31,190) Total Equity $ 33,321,386 $ 31,194,232 Total Liabilities and Equity $ 247,886,897 $ 238,472,872

182.3

206.8

225.5

238.5

247.9‘16

‘15

‘14

‘13

‘12

asset growth 36since

2012

Product Claims Paid to Members in 2016

Auto Deductible Reimbursement $ 7,251Auto Warranty $ 71,089 Debt Protection (Life & Disability) $ 264,895.13 GAP $ 146,735.52Life Savings $ 2,000.00

Five Yearasset growthin millions

%

We have audited the accompanying financial statements of Education Credit Union,

which comprise the balance sheets as of June 30, 2016 and 2015, as well as the related statements of income, changes in members’ equity, and cash flows for the years then ended, and the related notes to the financial statements.

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the selected amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial

statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Education Credit Union as of June 30, 2015 and 2014, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Greg R. Schmidt, CPAAmarillo, TexasOctober 12, 2016

Community GardenAmarillo Area Chapter of Credit UnionsAmarillo Area Foundation Amarillo Botanical GardensAmarillo Chamber of CommerceAmarillo Coalition for the HomelessAmarillo CollegeAmarillo Education Foundation

Amarillo Hispanic Chamber of Commerce Amarillo Independent School District Amarillo Little Theater Amarillo Public Library Amarillo Women’s Network Bair FoundationBig Brothers Big SistersBoy ScoutsBoys Ranch Bushland Independent Scholl DistrictCanyon Chamber of CommerceCanyon Education FoundationCanyon Independent School District

Canyon Main StreetCivic Amarillo Summer Youth Musical Coffee Memorial Blood CenterCornerstone Credit Union LeagueDon Harrington Discovery Center Downtown Women’s CenterFamily Support ServicesFellowship of Christian Athletes Future Educations AssociationHarrington Cancer FoundationHighland Park Independent School District Kids Inc.Leadership Amarillo & Canyon Martha’s HomeMavericks Boys and Girls Club Mission Amarillo Opportunity Plan, Inc.Palo Duro Kiwanis Club Panhandle PBS Panhandle Plains Historical MuseumPanhandle Golden Spread Quarter Horse Association

P-16 CouncilPatsy’s Place Region 16River Road Independent School DistrictSan Jacinto Christian AcademySnack Pack for Kids Amarillo & CanyonTexas Panhandle Builders AssociationTulia Independent School District United WayVega Independent School District West Texas A&M University White Deer Independent School District Window on a Wider WorldWomen’s Circle

Independent Auditor’s ReportCertified Public Accountant

10 11

• Members who would recommend us: 100%

• Website Hits: 14,361,596

• Text Banking Transactions: 66,460

• eBranch Users: 12,815

• Total bills paid through eBranch: 71,898

• Mobile Deposit Users: 4,890

• Total number of checks deposited through mobile deposit: 16,504

• Youth checking accounts: 2,185

• Total Facebook followers: 3,552

Measurements O F O U R S U C C E S S

Start planning next year’s garden

2016 Sponsorships

45th3615 SW 45th

Amarillo, TX 79109

Bushland1801 South FM 2381Bushland, TX 79012

Canyon2100 4th Avenue

Canyon, TX 79015

(806) 358-7777 www.educationcu.com (800) 687-8144

accounts and servicesSavings Accounts Youth AccountCoverdell Education Savings Account (ESA)Deposit ShareScottie SaversShare SavingsSummer SavingsChecking AccountsFree CheckingInterest CheckingRed Apple Checking with Benefits PlusGolden Apple CheckingGolden Red Apple Checking with Benefits PlusMoney Market AccountSuper Money MarketMyCard Youth AccountHealth Savings Account (HSA)Loans PersonalShared SecuredCD SecuredQwik Cash Line of Credit

New TeacherWeddingVehiclePre-approved VehicleRecreational VehicleHome EquityMortgageTax HolidayVacationIRAsTraditionalRothCDs Regular CDIRA CDInsurance AD&DCredit Life/DisabilityExcess ShareGAPTerm Life InsuranceTravelers Auto & HomeWorkSafe Debt Protection

Major Mechanical ProtectionADRDebit Cancellation Programs LifeDisabilityInvoluntary UnemploymentFamily LeaveChip Credit Cards VISAVISA Share SecuredVISA PlatinumVISA Platinum Cash Rewards ServiceseBranchMobile BankingText BankingiPad AppiPhone AppAndroid AppTablet App Mobile Deposit Instant Issue VISA Chip Debit Cards FinanceWorksPopmoney & Popmoney Request MoneyFunds TransferFraud DefendereDocs

Touch Tone TellerWeb Bill PaymentCarfax Payroll DeductionBank DraftsAuto TransferShare TransferTotal eAtlas WebVISA Gift CardsPurchase RewardsOther Conveniences Online Account OpeningOnline Car ShoppingCollege Scholarship ProgramTurbo TaxTraveler’s ChequesCourtesy PayWire TransfersDirect DepositSafe Deposit BoxesFinancial Planning with C.S. Wilson & Associates

Hillside6201 Hillside

Amarillo, TX 79109

I-404400 West Interstate 40

Amarillo, TX 79106

Plum Creek5500 Plum Creek Drive

Amarillo, TX 79124 For 100 Consecutive Quarters

Enjoy the blooms