Spero 2022 Annual Report

IMPROVING THE FINANCIAL LIVES OF OUR MEMBERS

Table of Contents

2 Letter from President & CEO, Brian McKay

3 Letter from Chairman of the Board, Mike Strickland

4 Letter from Chair of the Supervisory Committee, Frankie Nelson AND Five-Year Growth Analysis

5 Statements of Income & Financial Condition

6 Leadership Teams

7 Member Spotlight: The Blanton Family

8 2022 Impact Report

10 Scholarship Winners

11 2022 Credit Union Snapshot

Brian McKay

President & CEO

I RECENTLY ASKED TEAM SPERO to share one word that they would use to describe 2022. Their responses included grateful, productive, collaborative, accomplished — just to name a few. My response? Proud!

Amongst all that was accomplished in 2022, I am most proud of Team Spero’s relentless commitment to improving the financial lives of our members. The 2022 economic environment brought financial hardship to many of us due to rising costs of everyday items. We know that these rising costs have created new financial challenges for many of you. We stand ready to help with competitive loan rates and flexible deposit offerings. We appreciate your continued trust in us. We are honored to serve you.

I am also proud of how Team Spero continues to deliver excellence in Digital Experience, Personalized Service, and Community Impact for our members.

In 2022, we did this by launching digital account opening, designed to provide our members with a frictionless digital experience. Within Online Banking, you can now select “Add New Account” to open a checking account, savings account, money market, or certificate within minutes - all from the comfort of your home. In 2023, we plan to roll out the same experience for Spero loan products.

2022 also brought the launch of 11 new TellerLink machines throughout our branches. We converted our Spartanburg, Verdae, and Anderson Highway 81 branch drive-thrus to TellerLink. This transformation provides time-saving convenience to our members paired with the personalized service you deserve. Members conducted over 27,000 TellerLink transactions in 2022! If you haven’t used it yet, I encourage you to do so. We’ve even extended our hours so you can speak to a teller from 7:30 AM until 6:00 PM MondayFriday.

Speaking of our branches, we continue to make great strides in transforming our branches into relationship centers. Our goal is simple: to create a comfortable environment where you, our members, can discuss your financial goals with us, and we can help you achieve them. In 2022, 17 members of Team Spero completed a rigorous financial counselor certification program through the Credit Union National Association (CUNA) - with more scheduled to complete it in 2023. We know our members come from all walks of life, some flourishing financially, with others barely surviving. No matter your situation, we are here to provide financial hope for you.

And lastly, I am proud of Team Spero’s commitment to making our communities greater places to live, work, and play! Last year, our staff spent 648 cumulative hours volunteering in our communities. As an organization, we donated over $200,000 to local non-profits to support their efforts. As we move into 2023, we’ll continue to provide HOPE by combating hunger, elevating opportunity, supporting affordable-housing efforts, and providing financial education to our neighbors.

I am grateful to Team Spero and how they work together daily to improve the lives of our members and communities. I am grateful for our Board of Directors and Supervisory Committee, as they guide the strategic direction of our Credit Union and serve as the voice for our members. I am grateful for you, our members, for your continued trust and loyalty in us.

I appreciate you.

Mike Strickland Chairman of the Board

A FINANCIAL PANDEMIC!

The Coronavirus of 2020 presented many challenges for our nation and Spero Financial’s members. We responded by modifying our operating policies and procedures to provide the level of service our members expected and deserved. Loan payments were deferred, branch drive-thru hours extended, and emergency loans provided to members in dire financial need due to job loss created by the pandemic. We overcame the challenges presented by Covid-19, and our credit union remained strong.

As 2022 progressed, it became evident that we were facing yet another pandemic, albeit one of a different nature. This was a financial pandemic marked by rapid price increases and rampant inflation. Everything from housing to groceries to gasoline increased significantly in price. In an attempt to combat the rising inflation, the Federal Reserve Board raised the federal funds interest rate seven times during the year. Four of the increases were at 75 basis points. We had not seen a 75-point increase since 1994. The Fed’s action, while designed to slow economic growth and curb inflation, made it more expensive for consumers to take on credit.

Rising prices strained disposable income, and, despite higher borrowing rates, many of our members needed loans for housing, transportation, education, and other necessities. Loan demand increased by 19.42% year-over-year, as we provided $83 million in loans. Our borrowing power in the financial markets helped us meet this unprecedented loan demand.

On the flip side, many members took advantage of rising interest rates to increase their earnings by saving more. Spero Financial’s certificate of deposit (CD) and other savings rates were very attractive to depositors. Deposits grew by $98.5 million (20.16% year-over-year). These increased deposits also helped fund the year’s intense loan demand — a true win-win as savers earned top rates and borrowers were able to fulfill their credit/lending needs.

Despite the challenges we faced in the financial environment, we made it easier to do business with the credit union by continuing with our Digital Transformation initiative. We launched Online Account Opening, giving current members access to open new accounts directly within Online Banking and new members the ability to open their memberships directly online. We made it easier for members to make their mortgage and credit card payments directly within Online Banking. We introduced digital wallet, allowing members to add their debit card to their digital wallet to make purchases directly from their phones. 60,000 transactions were conducted in 2022 alone!

Despite the financial challenges encountered in 2022, we overcame adversity. In ending our year with a 6.77 (out of 7) rating on our member satisfaction survey, we are confident that we yet again met member needs and continued our mission of “improving financial lives to make our communities greater places to live, work and play.”

MICHAEL (MIKE) W. STRICKLAND Chairman of the Board

Frankie Nelson Chair of the Supervisory Committee

AS CHAIR of the Supervisory Committee, it is my great privilege to report another strong fiscal year for Spero Financial Federal Credit Union. As of December 31, 2022, financial outcomes reflect sound operational stability for the organization, in conjunction with favorable quarterly internal audit reports. These measures are a result of how the management and staff of Spero Financial are unrelenting in exercising sound judgment and practices as they carry out their fiduciary responsibilities in utilizing member funds so that both members and the Credit Union can soar financially now and into the future.

Each year Spero Financial undergoes an external audit from a third-party CPA firm as an added layer of accountability. This audit measures the effectiveness of the organization’s financial management. I am pleased to report that Spero Financial has yet again received a very positive “unmodified opinion” regarding the Credit Union’s financial statements for 2022 year-end.

Even amongst the 2022 high-inflation economic environment, the Credit Union experienced significant growth across assets and loans. A record year in deposit growth of $98.5 million paired with $4.3 million in income signifies the fiscal strength and stability of the organization.

2022 Key Performance Indicators

• Net Worth Growth of 7.47%

• Assets increased to $685 million (24.31% gain over 2021)

• Loans increased to $511 million (19.42% gain over 2021)

• Deposits increased to $588 million (20.16% gain over 2021)

• Net Income closed at $4.3 million

• 6,050 New Members joined the Credit Union

I encourage you to review the balance sheet, income statement, and other financial information included in this year’s report. You will find that Spero Financial continues to operate in a safe and sound manner, strategically focused on improving the financial lives of our members. This financial strength positions us well to soar into the future!

5-Year Growth Analysis

Statement of Income

Statement of Financial Condition

Leadership Teams

BOARD OF DIRECTORS

SUPERVISORY COMMITTEE

EXECUTIVE LEADERSHIP

TEAM

Back Row: Hughlyn Burgess, Anthony Lawrence, Steve Griffin · Vice Chairman, Bryant Harrison

Front Row: Joy Owens, Mike Strickland · Chairman, Roy Hayes · Secretary/Treasurer

Not Pictured: Michael Cunningham and Lee Brown

Back Row: Travis Barbare, Robert Wilson, and Brian McKay

Front Row: Jessica Baker, Damon Sipe, and Toni Davisson

Anna Marie Brock, Frankie Nelson · Committee Chair, Sheree Ramey, Andrew Williams, Janet Fancher - Not pictured

The Blanton Family

Our relationship started back in 1980 when Barbara worked for Southern Bell. As newlyweds, the Blantons opened their Spero (then SC Telco) savings, checking, and IRA accounts. In reflecting on her fondest memory as a Spero member, Mrs. Blanton recounted her time using the Spero Member Solutions Center while living in Charleston.

“When we were in Charleston, because there wasn’t a local office, I would call the call center and handle our banking over the phone … so I got to know the ladies there pretty well. We [talked about] what our kids were doing and things like that. So, when we were up in Greenville, we stopped by Krispy Kreme, got a couple dozen donuts, went to Toy Street, knocked on the door, and said, ‘Hey, can we go meet the people in the call center and give them these donuts? They’ve been so helpful over the years!’”

As the Blanton family has grown, their relationship with Spero has deepened. Upon their daughters’ births, Barbara and John opened accounts for them and taught them how to save and manage their own checking and credit card accounts. Their oldest daughter, Stephanie, went on to receive Spero’s Louis C. Addison college scholarship to pursue a nursing degree. In fact, this story from early 2022 inspired Spero’s recent commercial. The commercial depicts the progression of a young girl dreaming of becoming a nurse. In the end, she does!

Barbara and John look back on their time with Spero with fondness. “Over the last 42 years, our credit union has been with us all the way. Most importantly, we’ve always been treated like family — not customers of a financial institution,” shared the Blantons. “Life’s journey goes quickly, and as we move into our senior years, we appreciate that although it has grown, Spero is still family.”

The Blantons have been with Spero for over 40 years, and during that time, we’ve had the privilege to be an integral part of their lives. In the words of Mr. Blanton, “Spero has enabled us to grow as a family.”

MAKING OUR COMMUNITIES GREATER PLACES TO LIVE, WORK, AND PLAY

2022 Impact Report

At Spero Financial, we’ve been improving financial lives in the Upstate and Midlands for over 85 years. These numbers aren’t just numbers, but real lives changed — people who make our communities greater places to live, work, and play!

HELPING OUR MEMBERS SOAR FINANCIALLY

136 mortgages ($42 million) to make members’ homebuying dreams come true

2,906 personal loans ($15 million) to fund members’ financial goals

76 members received a lower-rate by refinancing their mortgage with Spero

4,003 auto loans ($98 million) that put our members in the driver's seat

EARNINGS AND PERKS FOR OUR MEMBERS

Members received 28 million points for using their credit cards

$3.8 million given back to members as savings/checking account earnings

Members received $37,870 in ATM refunds with Kasasa accounts

$250,000 in member savings through our CO-OP ATM Network

MAKING OUR COMMUNITIES BETTER PLACES TO LIVE, WORK, AND PLAY

648 employee volunteer hours in our communities

$200,000 donated to non-profit organizations in the markets we serve

9 volunteer events

Team Spero participated in

$9,000 granted to 3 Spero members to support highereducation aspirations

23 community events that Spero participated in with local non-profits

Scholarship Winners

Since 2010, Spero Financial has invested $108,000 into future generations by awarding three scholarships each year to Spero Financial members pursuing higher education. Congratulations to the 2022 Louis C. Addition College Scholarship winners.

Madison Grace Bonig

Madison currently attends Spring Valley High School and plans to attend Lander University in the fall! Her educators describe her as a confident and remarkable young lady who exceeds their expectations. Madison is a member of the National Honors Society, National Thespian Society, has been a cast member of the Spring Valley Players for four years, a Junior Deputy with the Richland County Sheriff’s Department and volunteers at her Church. Her goal is to become a homicide detective after she obtains her Bachelor of Science in Criminology.

Olivia Joy Bonilla

Olivia currently attends USC Upstate where she is planning on pursuing a master's degree in accounting. Her educators describe her as someone who is personable, well-spoken, and a respectable leader. Olivia was elected Junior Class President and Student Body President, is a member of the USC Upstate Trio, and earned The Girl Scout Bronze Award by teaming up with other girls to make a difference in her community.

Robert Drayton Robbins

Robert currently attends Easley High School and plans to attend the College of Charleston in the fall! His educators describe him as a highly effective student and is respectful of his peers and has a great attitude. Robert is a member of the Varsity Track & Cross Country Teams where he was awarded the Team Captain in 2022. He volunteers with the Special Olympics, Foothills Gymnastics & Cheer, and is a lector at St. Michaels Episcopal Church.

2022 Snapshots

Soaring as Spero Financial

• 50,369 Total Members

• $685 Million in Assets

• Named 2022 Best Places to Work in South Carolina

• Named 10th in the Nation for Best Credit Unions to Work For

• Top 3 Finalist in 2022 Best of the Upstate Community Choice Awards

• Named 2nd Place for the Carolinas Credit Union Foundation’s Dora Maxwell Award

Employee Highlights of the Year

• TellerLink Representative Jeanie Barron Named Best Credit Union Teller in the 2022 Best of the Upstate Community Choice Awards

• SVP, Chief Operating Officer Jessica Baker Named by Greenville Business Journal as one of the Best Women in Business in South Carolina

• President and Chief Executive Officer Brian McKay Named by Greenville Business Journal as one of the Top 50 Most Influential People in the Upstate

Taking Care of Team Spero

• 165 employees serve the organization across 35 different departments

• 190 individuals provided with medical insurance — both employees and their families

• 25,139 hours of paid time off was awarded

• 29 promotions and 12 transfers to roles in other departments

• 1 retirement celebrated

• 1,315 hours of employee training

Insured by NCUA