Executive Report Certified Federal Credit Union completed another record year in 2018, reaching $568 million in assets. This is an increase of almost $63 million or 12%, which was driven by strong organic growth, and the addition of Metropolitan Water District Federal Credit Union (MWD FCU). We are now a credit union of food and water!

loans also hit a new high of $341 million, reflecting growth of almost $49 million, or an increase of 17%. The strong United States and California economies continue to drive low unemployment and member confidence. Capital grew to $118 million, or 20.9% of assets, which continues to place us in the top 1% nationwide for safety and soundness.

We again earned the top rating of Five Stars from Bauer Financial, and an "A+" from Weiss Ratings, ranking us in the highest tier for the financial services industry. We are the largest grocery industry credit union in the Western United States and are pleased to also serve the local communities surrounding our headquarters in El Monte.

In 2018, we experienced another exciting period of membership growth and outreach. The addition of Bristol Farms, Lazy Acres, Numero Uno, Smart & Final and Stater Bros. Markets, has positioned us to continue our significant growth for many years to come. While we will always remember and honor how our credit union began, our future lies with the many new companies embracing the Certified Federal banner. Recognizing this, in 2019, Certified Federal became the parent credit union.

In addition, we were honored to be chosen by Auto Club Federal Credit Union (ACFCU) as their merger partner. During 2019, we will incoroirate ACFCU into our credit union family. We currently serve 20 sponsors, retailers and wholesalers.

We would like to thank our outstanding Board of Directors and Supervisory Committee, led by Chairman, Gary Hammett. In addition, we welcome our newest Board Director, Michael Cooper, formerly the Board Chairman of MWD Federal Credit Union. A special thanks to our staff, who are there each day to serve you, our members!: ·.·�•. '· .- , .,-, -•,_.-. _,, _ _.,, '' ,,,,.• ., -._,_.-.,,. . .- - -' .. :.- ,_--_-.-.-,,-.,- ., ._ ........ � .. -,.- .-.. -_ ,. ' :-' .'-. . ,., __ '.- .·.•. •· • . ·.·.· -... -._.,.,,,:--

:, Donna Simpson; .,j_!VP /COO

Pictured from left, .it the Automob!le Club of Southern California Headquarte-rs, Co5ta Mesa:

Warren Fish {Vice Chairman}, JoAnn Murdock, Michael Coop-er, Gary Hammett (Chairman)i Lori Kunioka (Supervisory Committee Chair),

Dick Gonzales (Sf!cre,tary), St"\le Weakley (Tr�a�ur� r/(:EO)

Board of Directors

Assets loans to members Allowance for loan losses Cash and cash equivalents Investments

Property and equipment Other assets Total assets

liabilities and Equity Dividends payable All other liabilities Share accounts Share checking and ultra accounts Certificates Individual Retirement Accounts Capital/Reserves Total liabilities, capital and reserves

Income and Expenses Interest on loans Investment income

Total interest income Total interest expense on members' accounts Net interest income Provision for loan loss Net interest income after provision for loan losses

Service charges and other Income Gain on sale of property and equipment Gain (loss) on sale of investments Gain on non-operating activities Gain on bargain purchase Total non�interest income

Non-Interest Expense Compensation and benefits Outsourced services Other expenses Non-operating expenses Net Income

2018 2017

341,187,392 292,217,624 {3,091,342) (2,685,288) 21,741,864 34,210,949

196,801,336 171,905,445 2,259,820 2,035,864 9,194,071 . 7,888,9��

568,093,141 505,573,519

298,159 219,652 7,778,170 6,725,915

153,954,593 121,316,982 117,411,710 106,763,618 132,972,168 126,418,799

37,213,717 36,517,373 118,_464,624 1_07,6.!.1,180 568,093,141 505,573,519

18,116,838 16,808,474 _4,!�25,�Q� 3,041,029 22,242,640 19,849,503

_},211,�� _ 2,564,753 19,031,369 17,284,750

_2,581,000 _2,706,000 16,450,369 14,578,750

10,066,111 9,470,975 8,838

105,634 {45,940) 646,801

87,548 --

10,268,131 10,071,836

10,292,325 9,922,246 4,813,320 3,780,629 5,267,765 5,127,519

223,684 6,121,406 5,820,192

FiV\aV\cials

ASSETS lS In mi!lioos)

1111111111 EQUITY (Sin mdhoosl

1111111111 IV1depeV1deV1t Auditor's StatemeVlt In our opinion, the financial statements present fairly, in all material respects, the financial position of Vons Employees Federal Credit Union as of December 31, 2018 and 2017, 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. Richards and Associates, Certified Public Accountants

Supervisory Committee StatemeV1t The Supervisory Committee is responsible for monitoring the financial safety and soundness of the credit union and ensuring compliance with various financial and regulatory requirements. In fulfilling these responsibilities, the committee engaged an auditing firm specializing in credit unions to audit the financial statements as of December 31, 2018 and their opinion is stated above. In addition, the commi�ee met on a quarterly basis to review the internal audit reports.

Lori Kunioka Steve Kay Debbi Navarro Bernie Kilcoyne COmm1rtee Chillr

.0ristol g--arms

In 2018, teaming up with Bristol Farms, lazy Acres and Numero Uno proved to be an opportunity to demonstrate our mantra of work hard, play hard! We celebrated our new partnerships at a corporate office, a company picnic and a posada.�

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Cultivati\l\g New RelatiOV\Snips We are honored to serve Stater Bros. Markets and Smart & Final. Together, these two fine grocery retailers provide the opportunity to serve over 29,000 employees and their families. As we continue to develop these new relationships, we're confident that 2019 will be a year of significant growth.

A Grocers Credit U�io� a�d More!

We are honored to have been selected as the merger partner for Metropolitan Water District Federal Credit Union, with $47 million in assets and 2,800 members. We are grateful to their Board of Directors, and their Chairman, Michael Cooper, who now serves as a director on our credit union's board.

SUPERIOR GROCERS.

'"'f. un L ---

Thank you to the Auto Club Federal Credit Union, with $28 million in assets and 3,500 members, for choosing us as their merger partner. We sincerely appreciate the entire ACFCU team including Board Chairman Bernie Kilcoyne, the Board of Directors and CEO Bob Moreno. We wish Bob the very best in his retirement and we thank him for his 32 years of service!

VONS

BR .ts 200 N. Puente Street.

Br���,928U}.. ERRI TOS (ACFCU) 8327 Gridley Road erritos, CA 90703"

..,

COMMERCE 4820 S. Eastern Avenue Suitel • • ,Commere, CA 90040 "

I FUUERTON ....

'

. ,, 1421 Manhattan Avenue .. �Fullerton, CA 9283_14"

I-GRANADA HILLS ' 16830 San Fernando Mission Boulevard Granada Hills, CA 91344

, LOS ANGELES (MWDFCU) 700 N. Alameda Street Los Angeles, CA 90012

• • SAN BERNARDINO 1· 420 E. Hospitality lane

Suite A-6 San Bernardino, CA 92408 ·

.,

UNFI / SUPERVALU 5200 Sheila Street Commerce, CA 90040

',

5,600+ CO-OP Shared Branch locations 30,000+ CO•OP ATMs.

P.O. Box 8023 El Monte, CA 91734 323.8S9.22so I 626.444.1972