TREASURERS ’ REPORT

From a broad view, credit unions will likely associate 2022 with heated inflation, significant increases in short term interest rates and, in general, changes to the liquidity landscape.There is a significant difference between a credit union’s ability to withstand economic shi s and the ability to capitalize on these shi s for the good of the membership.We are pleased to reportVolCorp did the la er, and, in many respects, served its member credit unions and our collective mission in a greater capacity than any other time in its history.

RON SMITH Treasurer

Providing member credit unions reliable access to liquidity is one ofVolCorp’s foundational pillars and a primary reason for its charter over forty years ago. Although 2022’s year-end outstanding loan balance of $55 million is only a small portion of approved lines of credit andVolCorp’s lending capacity, loan activity was notably higher during the year. 2022 marked the final year of the temporary CLF agent program which granted CLF access for the majority of VolCorp’s membership.While a great amount of past and ongoing effort was expended to make the program permanent,VolCorp was proud to serve as your agent during those uncertain years.

Supporting member liquidity is only possible with a solidfinancial foundation.Tier 1 capital grew over $26 million during 2022 and exceeded $150 million at year-end.Although capital growth and comparative annual earnings have been skewed in recent years due to recoveries from the U.S. CentralAsset Management Estate, both‘one-time events’and operational performance further strengthened our foundation.VolCorp’s earnings and member share rates both benefited during 2022 with the relatively rapid increases in overnight rates, resulting in 2022’s net interest income of $9.9 million. U.S. Central distributions and growth in service-driven revenue bolstered noninterest operating income to $31.9 million.A er operating expenses of $14.9 million and nonoperating expenses, 2022’s net income rested at unrealized loss position stood at only 2% of its portfolio book value, an impressive feat considering the portfolio’s short duration and the 425 basis point upward movement in the Federal Reserve Bank’s target range during the year. VolCorp’s assets are heavily concentrated in riskfree or low-risk assets such as the Federal Reserve Bank, government guaranteed securities, and agency securities.The investment portfolio is primarily composed offloating rate instruments andVolCorp only holds high credit quality securities.The quality of assets held is ultimately reflected in the currentTier 1 risk-based capital ratio of 71.92%, which is far greater than its respective“well capitalized”threshold of 6.00%.

$26.6 million.At year-end,VolCorp’sratio leverage stood“well capitalized”at 8.26% and the retained earnings ratio of 4.60% sat well above regulatory requirements.

VolCorp must also maintain high-quality assets to support member liquidity and provide for safety of deposits. Recently the downside of higher rates, namely depressed investment values and unrealized losses, has garnered much a ention in the news. However,VolCorp’s portfolio management philosophy negated the pitfalls affecting the headline institutions.At year-end,VolCorp’s net

VolCorp’sALCO meets monthly overseeing asset-liability management, investments, and credit risk.The commi ee monitors corporate liquidity to ensure funds are available to members in times of need, while also allowing earnings and growth opportunities for both the corporate and member credit unions.A review of the audited financial statements indicates operations are sound.VolCorp is well-positioned to serve its members for many years to come.