Volunteer Corporate Credit Union and Subsidiary Notes to the Consolidated Financial Statements (In Thousands)

Note 1: DESCRIPTION OF BUSINESS

Volunteer Corporate Credit Union and Subsidiary (VolCorp) was created in April 1981 by the general assembly of the State of Tennessee to function as a credit union support system to credit unions in Tennessee to facilitate mergers, joint ventures, and cooperative efforts and to provide credit unions with investment, liquidity, and payment system services. VolCorp is regulated by the Tennessee Department of Financial Institutions’ Credit Union Division and the National Credit Union Administration (NCUA).

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting policies of VolCorp conform to accounting principles generally accepted in the United States of America and to general practices within the credit union industry. The following represent the more significant of those policies and practices:

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of VolCorp and its wholly‐owned subsidiary, Symphony, LLC. Symphony, LLC was formed in November 2020. All significant intercompany balances and transactions have been eliminated in consolidation.

Basis of Accounting

The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). The Financial Accounting Standards Board (FASB) provides authoritative guidance regarding U.S. GAAP through the Accounting Standards Codification (ASC) and related Accounting Standards Updates (ASUs).

Use of Estimates

The preparation of U.S. GAAP consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. Estimates that are particularly susceptible to significant change in the near term are related to estimating the fair value of financial instruments and the status of contingencies.

Financial Instruments and Concentrations of Credit Risk

In the normal course of business, VolCorp invests in highly rated domestic corporations and uses nationally recognized broker/dealers in the execution of trades for financial instruments. Exposure to individual counterparties may be significant. In providing financial services solely to the credit union industry, VolCorp is dependent upon the viability of that industry.

At December 31, 2022, VolCorp had $42,578 in deposits held at other financial institutions that were in excess of Federal Deposit Insurance Corporation coverage limits.