Crowe Horwath service to Credit Unions

Recognized Leadership, Enduring Value Crowe has experience, integrity, and extensive credit union industry knowledge.

Audit | Tax | Advisory | Risk | Performance

Today’s credit unions must anticipate fast-changing competitive pressures, respond to an evolving regulatory climate, and address rising expectations – all while managing risk and long-term strategic issues.

In this challenging environment, credit unions need an experienced service provider with a proven record of success to help them address these industry challenges.

Recognized Leadership, Enduring Value: Crowe has experience, integrity, and extensive credit union industry knowledge.

Crowe Knows What Matters to You With more than 50 years of experience working with credit unions, Crowe Horwath LLP is recognized as a leading provider of audit, tax, advisory, risk, and performance services. To put it simply, Crowe understands the financial services industry and issues that most affect credit unions and their professionals.

The financial services industry is the largest area of specialization within Crowe.

We serve more than 1,100 financial services organizations across the country, including more than 100 credit unions and credit union service organizations. In fact, Crowe is one of the top 10 CPA firms for audits of credit unions in excess of $100 million in assets and ranked sixth for total credit union assets audited.1 Of course, size alone isn’t everything.

Crowe also has an established reputation for professionalism and industry leadership, providing active participation in and support to organizations such as the National Credit Union Administration, the Credit Union National Association, and the Financial Managers Society, among many others.

“Very impressed with the maturity of the Crowe practice, the conduct of its professionals, and the overall engagement experience.”

– Ken Major, Information Security Officer, AmeriCU Credit Union

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Source: 2014 Credit Union Auditors Supplier Market Share Guide by Callahan & Associates

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Crowe Horwath LLP

Crowe Involvement With Credit Union Organizations Crowe actively networks with and supports leading organizations and events associated with credit unions including the: ■■ National Credit Union Administration (NCUA) ■■ American Institute of Certified Public Accountants (AICPA) National Conference on Credit Unions ■■ Association of Credit Union Internal Auditors (ACUIA) ■■ Credit Union Internal Auditors’ Association (CUIAA) ■■ Credit Union National Association (CUNA) ■■ National Association of Federal Credit Unions (NAFCU) ■■ National Association of State Credit Union Supervisors (NASCUS) ■■ National Association of Credit Union Supervisory and Auditing Committees (NACUSAC) For more than 10 years, Crowe partners have served on the AICPA National Conference on Credit Unions Steering Committee, assisting with conference development including providing a variety of speakers.

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A Crowe partner serves as chair of the AICPA Depository Institutions Expert Panel. This committee maintains an ongoing liaison with regulatory agencies and standard setters that affect financial institutions, including the NCUA. Crowe professionals also serve on the AICPA Regulatory Liaison Task Force, which meets with NCUA representatives to discuss matters of mutual interest for auditors of credit unions and NCUA personnel.

Our NCUA involvement has also included providing various training sessions for examiners; conducting joint webinars with the NCUA for credit unions on accounting matters; providing business combination accounting consulting services; performing work on various valuation projects; and conducting material loss reviews for the NCUA Office of Inspector General.

Recognized Leadership, Enduring Value: Crowe has experience, integrity, and extensive credit union industry knowledge.

Helping Make Sense of Complicated Issues Audit, accounting, and regulatory standard setters continue to affect the credit union industry at a fast pace.

Crowe shares thought leadership by: ■■ Presenting at conferences including our annual financial institutions conference ■■ Distributing articles, white papers, newsletters, technical updates, and e-communications covering timely audit, accounting, and regulatory updates and topics ■■ Offering webinars covering accounting, fraud, compliance, corporate governance, and regulatory topics ■■ Making technical subject matter specialists available to discuss the impact and application of accounting standards ■■ Providing expertise in internal audit, tax, compliance, loan review, corporate finance, merger and acquisition, corporate governance, and BSA/AML to credit unions 2

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Financial statement audits may limit our ability to perform additional services for the same client.

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Crowe Horwath LLP

The Unique Alternative® – What It Means and How We Do It What sets Crowe apart from other providers? Our approach emphasizes direct senior-level involvement in each project, so Crowe clients can be confident they are receiving attention from experienced financial services professionals.

Crowe clients also benefit from our centralized organizational structure with no geographic constraints. We are able to pull specialized talent and experienced people from anywhere in the firm to help meet the needs of our clients. And we continually invest in developing new, highly specialized teams, processes, and technologies to increase efficiency.

An Exceptional Client Experience At Crowe we focus continually on delivering the highest levels of service to our clients. We hold ourselves accountable, surveying our clients regularly to help us understand how we can improve their experience and earn their trust and recommendations.

In our most recent survey results, Crowe achieved an 88 percent client engagement index. Engaged clients are those who agree they really like working with us, are likely to continue to use us, would go out of their way to keep working with us, and will recommend us to colleagues. According to the survey administrator, Crowe scored 33 points above the industry benchmark in this critical measure.3

“Most Engaged Customers” Business to Business Survey, Accounting and Tax, PeopleMetrics Inc., 2013, http://info.peoplemetrics.com/2013_mecx_b2b_ accounting_download

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Recognized Leadership, Enduring Value: Crowe has experience, integrity, and extensive credit union industry knowledge.

Audit Services Choosing the right professional services firm means you can be confident you are receiving objective, credible information to help guide your critical management decisions.

Crowe Audit Services ■■ External audit ■■ Benefit plan audit ■■ Specialized audit (HUD, FFELP, others)

Crowe Assurance Services ■■ Financial reporting ■■ Accounting advisory

Crowe is a leading provider of professional audit services for credit unions of all sizes throughout the United States. In addition to being a top 10 CPA firm for audits of credit unions in excess of $100 million in assets, we are also ranked sixth for total credit union assets audited.4 Our audit specialists stay fully informed and up to date on today’s complex and rapidly changing financial requirements and employ a cost-effective, industryfocused, and technology-enabled audit methodology.

“Crowe continues to deliver in-depth expertise related to credit unions and the financial services sector.

They are responsive, timely, and an excellent source of up-to-date information.

It is a positive experience working with Crowe, and I consider them to be trusted business professionals who engage in two-way dialogue with us.”

Competence, Consistency, and Objectivity Crowe maintains high audit proficiency through consistency of staff, continued training, and senior-level involvement in the engagement, from initial analysis and risk assessment to completion and delivery of reports.

Our technological capabilities improve the audit process by enhancing efficiency and reducing disruption to your credit union. These technology tools help expedite the transfer and analysis of large amounts of financial data through the use of shared databases, an automated work paper system, Web-enabled project tracking, and secure data sharing.

Integrity and financial industry leadership are also factors. As an active participant in and contributor to organizations shaping today’s regulatory environment, Crowe professionals can bring insights into emerging trends and issues affecting the audit engagement.

– Norm West, CFO, Alaska USA Federal Credit Union

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Source: 2014 Credit Union Auditors Supplier Market Share Guide by Callahan & Associates

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Crowe Horwath LLP

Risk Consulting Managing risk across the entire enterprise is one of the most difficult challenges facing credit union executives. It includes credit risk, data security, fraud, regulatory compliance failure, and other potential threats from outside and inside your credit union.

Crowe Credit Services ■■ Outsourcing of the credit review function ■■ Managing commercial real estate concentrations ■■ Acquisition due diligence

Crowe Internal Audit Services ■■ Internal audit cosourcing and outsourcing ■■ Corporate governance ■■ Enterprise risk management

Crowe Information Technology Services ■■ IT audit cosourcing and outsourcing ■■ Risk management

Crowe BSA/Anti-MoneyLaundering (AML) Compliance Services ■■ Independent Bank Secrecy Act (BSA) audit ■■ Regulatory exam preparation and management ■■ Forensic and third-party look-back

Crowe Regulatory Compliance Services ■■ Compliance management program assessment and development ■■ Model governance evaluation ■■ Consumer Financial Protection Bureau (CFPB) readiness assessment ■■ Compliance reviews 8

Crowe has helped credit unions meet their governance, risk, and compliance needs. Our experienced consultants have deep subject-matter expertise in risk management, internal audit, fraud and ethics, security and privacy, and regulatory compliance to help keep credit unions advised of emerging trends, industry benchmarks, and best practices. By combining in-depth industry skills with practical types of technology and a singular global delivery method, Crowe helps credit unions improve corporate governance and manage risk.

Managing Risk for Competitive Advantage Crowe consultants recognize that managing business risk is really about improving business performance. So we designed our Corporate Governance Framework to help credit unions work toward the rewards of enterprise risk management (ERM).

Crowe risk management professionals help institutions assess and better manage strategic, financial, compliance, operational, security/ privacy, and fraud risks. We use a pragmatic ERM approach to provide key decision-makers with insights that can aid in achieving strategic business objectives. At another level, Crowe internal audit support can help provide important feedback to management and supervisory committees and enable credit unions to strengthen risk management and governance.

Our comprehensive risk management solutions also can help strengthen and protect business intelligence and intellectual property while reducing complexity in areas such as AML transaction processes. The combined effects of these programs can include reduced costs, improved accuracy, and enhanced member service.

“I find the Crowe team assigned to our audits to be knowledgeable and professional. The audit approach used is thorough and comprehensive. We have found the Crowe Information Request Tracker (CiRT®) solution very beneficial in organizing and managing internal audit’s work with Crowe.”

– Tim Fitzpatrick, Vice President, Internal Audit, DFCU Financial

Recognized Leadership, Enduring Value: Crowe has experience, integrity, and extensive credit union industry knowledge.

Tax Services Crowe tax specialists understand the intricacies of helping your organization safeguard its most valuable asset – your not-for-profit status. We continually track pending regulatory changes and can work with you to develop tax strategies designed to help you comply with international, federal, and state and local requirements.

Crowe Tax Services ■■ IRS Form 990 compliance using C-TRAC solution ■■ Accounting for unrelated business income tax assessments including appropriate expense allocations ■■ Recommended tax structure including the use of for-profit subsidiaries ■■ Consulting on compensation matters including employment taxes ■■ Accounting for fringe benefits

“Throughout more than a decade of working with Crowe at both the local and national office levels, I’ve found them to be without equal in their commitment and service to communitybased financial institutions.

Crowe personnel produce a quality product delivered with an excellent service philosophy built upon the core principle of listening to their clients.”

– Greg Talbott, Senior VP and CFO, Kinecta Federal Credit Union

Take Control of TaxExempt Compliance Many credit union organizations struggle with tax-exempt filing requirements, spending precious time gathering and managing data. We developed the Crowe® Tax Risk Assessment and Control (C-TRAC®) solution to streamline the process and reduce the amount of time and effort needed to complete IRS Form 990 and related schedules.

The C-TRAC solution is the only compliance solution developed by tax-exempt professionals for the tax-exempt community. Created and continually refined by Crowe tax-exempt specialists, this innovative, Web-based technology provides effective project management tools in line with IRScompliant tax preparation requirements.

From distributing conflict-of-interest questionnaires to electronic filing, the C-TRAC tool can help you complete your returns in less time and with less cost without straining limited internal resources.

Our experienced team members have focused their careers on serving not-forprofit organizations with tax advice using one-of-a-kind technology.

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Crowe Horwath LLP

Financial Advisory Services As market conditions change, many credit unions face issues such as loss of liquidity, maintaining member value, and complicated acquisition strategies. Achieving a return on investment takes determination and the proper strategy.

Crowe Financial Advisory Services ■■ Transaction services for M&A Due diligence Valuation services Day 1 and Day 2 accounting advisory under FASB ASC 805 Integration ■■ Forensics and litigation support

Crowe offers a complete suite of financial advisory consulting services, delivered by seasoned professionals who understand the issues related to making informed decisions on strategic opportunities available for your credit union. Our comprehensive approach includes diligent planning, skillful execution, and prompt action to help credit unions achieve accurate and timely results.

Expanding Value, Turning Goals Into Achievements As credit unions look to achieve growth through strategic acquisitions, Crowe offers a breadth of skills and a team approach to help from the first day of an acquisition through the entire transaction continuum.

Crowe valuation specialists provide insights into deal planning, financial reporting, post-deal accounting, and other associated matters. Our transaction

services professionals can identify deal risk points and potential deal breakers while offering guidance into transaction structure and potential opportunities for post-acquisition improvement.

Once the deal is done, Crowe specialists are available to help institutions assess how purchase price allocation and similar industry-specific issues will affect their reported earnings. Our merger and acquisition integration consultants know where integration risks can impede an acquisition and through benchmarking can assist in identifying where cost savings may be realized.

In addition, our multidisciplinary, credentialed team of forensic specialists offers technical expertise for fraud investigations, arbitration services, and expert witness testimony.

“Crowe had tremendous expertise related to mergers and acquisition opportunities. The Crowe team assisted with regulatory discussions and the impact of deal terms on the combined entity. I definitely felt like I had a great resource with Crowe to go to with complex technical issues. They were responsive and very helpful in the success of our acquisition.”

– Melissa Ashley, SVP and CFO, Corporate One Federal Credit Union

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Recognized Leadership, Enduring Value: Crowe has experience, integrity, and extensive credit union industry knowledge.

Performance Consulting In challenging economic times, it is more important than ever to take actions to improve operations, make better use of your data, and focus on your credit union’s overall performance. Operational and revenue efficiencies begin by increasing visibility into the processes, technology, data, and resources in these areas.

Crowe Performance Consulting Services ■■ Performance advisory ■■ Revenue enhancement ■■ Operational improvement ■■ Information management ■■ Portfolio management and stress testing

Crowe performance services help credit unions streamline operations, manage information, and build a better bottom line. Using comprehensive knowledge of industry-leading practices, types of technology, and enterprise systems, our consultants provide practical advice and proven methods designed to help credit unions create lasting change – and a performance advantage in the areas of productivity, expenses, compensation, branch performance, process design, and other operational practices.

Drawing on decades of industry experience and our independent perspective, Crowe performance specialists provide executive teams with seasoned advice, clear-eyed objectivity, and proven management skills to help you assess, strategize, execute, and break through barriers in order to achieve higher performance.

By uncovering opportunities to assist in moving your credit union to the next level of performance, we can help you implement operational efficiency improvements, cost reductions, better controls, and quality of service enhancements.

“Crowe is very professional, they have good depth and talent, and excellent industry knowledge.”

– John Buckley, Secretary/Treasurer, Gerber Federal Credit Union

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Maximizing Organizational Excellence With Technology Building on knowledge about and expertise with the current technology landscape and trends, we can help credit unions optimize their IT investment with technology planning and strategy development, system selection, and IT optimization designed to focus on current and future needs. Our solutions include: ■■ Crowe Navigator ® for Lenders to help credit unions more effectively monitor and analyze credit risks, identify portfolio trends and risk exposure, perform industryspecific “peer analysis,” identify problems earlier, and enhance loan management practices ■■ Crowe Credit 360 Portfolio Surveyor, which provides the capabilities credit managers need for a comprehensive analysis of credit portfolios including stress testing, concentration analysis, regulatory reporting, and economic capital management ■■ Data integration, business intelligence, and visual analytics solutions to help credit unions take advantage of powerful information management technology, identify service growth opportunities, and provide the metrics to solve management challenges 11

Contact Information

Crowe Horwath LLP, The Unique Alternative®

We invite you to learn why many credit unions have turned to Crowe as their preferred provider for audit, tax, advisory, risk, and performance services. Visit www.crowehorwath.com or contact Mark Taylor at 630.575.4335 or mark.taylor@crowehorwath.com.

Crowe Horwath LLP (www.crowehorwath.com) is one of the largest public accounting and consulting firms in the United States. Under its core purpose of “Building Value with Values,®” Crowe uses its deep industry expertise to provide audit services to public and private entities while also helping clients reach their goals with tax, advisory, risk, and performance services. With a total of more than 3,000 personnel, Crowe and its subsidiaries have offices coast to coast. The firm is recognized by many organizations as one of the country’s best places to work. Crowe serves clients worldwide as an independent member of Crowe Horwath International, one of the largest global accounting networks in the world, consisting of more than 150 independent accounting and advisory services firms in more than 100 countries around the world.

Register to receive Crowe financial institutions’ e-communications at www.crowehorwath.com/signup.

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